richc

Too bad, another bad sign of the times.

TOKYO - The global economic slowdown has taken an early toll on Formula One, with Honda quitting the high-cost sport to focus more on making and selling cars at the expense of racing them.

Honda CEO Takeo Fukui said Friday that the Japanese automaker was unable to continue backing a team in the high-cost F1 competition and wanted to put it up for sale.

"The automobile industry is experiencing very difficult times,'' Fukui said. "Demand started to dry up in November and we can't see the light at the end of the tunnel.''

The withdrawal of one of the world's biggest car manufacturers will send shock waves through F1, which is already under mounting pressure to put the brake on spiraling costs and could start the season with only 18 cars on the grid.

“This is a wake-up call,” F1 boss Bernie Ecclestone told Sky News television. “If you and I wanted to run a Formula One team, we wouldn’t need to have to spend what they are spending at the moment — probably ($2.94 million) a year to do it.

“The trouble is the teams are basically run by technicians who should probably be at home playing with their PlayStations rather than spending fortunes to win races.”

Japanese team Super Aguri, which was backed by Honda, pulled out of F1 earlier in the 2008 season.

The 2009 season opens March 29 at the Australian Grand Prix.

The latest move reflects the huge difficulties faced by auto makers around the world, including the Big Three — General Motors, Ford and Chrysler — in the United States, where desperate automakers are seeking a $34 billion bailout to stay afloat.

Job cuts
On Thursday, Honda Motor Co. announced it is cutting jobs in Britain and Japan because of plunging vehicle demand. It has already reduced its annual production of consumer cars by more than 140,000 worldwide.

Honda is also cutting 760 temporary workers at four plants, including one motorcycle plant, or nearly 18 percent of its Japan temporary work force of 4,300, this month and next month in response to nose-diving demand in the United States and other key markets, company spokesman Hideto Maehara said.

"It's understandable if you look at the current situation around the auto industry,'' said auto analyst Koji Endo at Credit Suisse. "Ford, GM, and Chrysler are all facing extremely tough times. I would not be surprised if Japanese auto manufacturers start losing money in 2009, which would be the first time since World War II. Given this situation, it may be a good idea for them to pull out of auto racing.''

Speculation of the announcement started late Thursday in England, where the F1 team is based. On Friday, Japanese politicians expressed regret over the decision.

"It really shows that the auto industry, which has been leading the Japanese economy, is facing severe economic conditions,'' added Economy, Trade and Industry Minster Toshihiro Nikai.

The Honda team, with an operational budget of around $294 million, finished next-to-last in ninth place in the F1 constructors' standings last season. Honda, which originally entered F1 as a constructor for a stint in the 1960s before returning as an engine supplier in the 1980s, bought out BAR Racing in 2005.

Popular but expensive
Its move Friday underscored deeper problems in the popular but expensive sport.

FIA president Max Mosley had already described F1's combined $1.6 billion spending in 2008 as "unsustainable,'' saying the teams were relying too heavily on the goodwill of rich individuals and corporate sponsors. Mosley has vowed to push through cost-cutting measures by 2010 to make the sport more affordable for teams, highlighting Honda's announcement as extra motivation for change.

"The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's long-standing concern that the cost of competing in the World Championship is unsustainable,'' the FIA said in statement Friday. "In the FIA's view, the global economic downturn has only exacerbated an already critical situation.

"As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA (the Formula One Teams' Association) to ensure that Formula One becomes financially sustainable.''

The auto racing world governing body has already reached a deal with F1 to cap the cost of engines supplied to smaller teams.

Over recent months, the 10 teams had met regularly with F1 boss Bernie Ecclestone to discuss reducing costs, including streamlining engines.

Honda's announcement also prompted fears other major manufacturers could follow suit.

Toyota Motor Corp., Honda's main rival in Japan, has also announced staff cutbacks, but has denied rumors it might quit F1. The Toyota F1 team finished 5th in the season standings.

Eric - Plug Guy

This is huge, in a bad way.

ECS

Ugh, my plan to get through the downturn is to watch F1 and ALMS. Don't like the direction this is taking!

kcl

This economic downturn really is affecting everyone.

entdoc

F1 pulled out of the Montreal Grand Prix - the only North American stop and on the schedule since 1967 - drawing 300,000 people. For 2009 to 20013, F1 wanted $175 million and 100% of revenues from advertising and corporate boxes. Canada (the promoter and 3 levels of government) offered $110 million and a percentage of profits (75% of the first $10 million and 25% of the remainder) which was their supposed limit in terms of retaining profitability. F1 declined.

Minok

Its funny to have Eccl-head talk about how we need to make it less expensive to keep the likes of Honda in the series, and then try to squeeze every drop of blood out of a venue. F1 is shooting itself in the foot. The actual F1 organization should be non-profit - its sole purpose should be to put on the sporting events.
Where does all that money from sponsors, venues, tickets, manufacturers paying to play go? Its not all spent on those S&M parties, is it?

MFC996

That decision was part political for the shareholders and part thumbing their nose at Bernie for taking too much of the profit. He's a greedy bastige.

texas911

I'd love to see Bernie eat some humble pie when, Toyota and Renault and even BMW leave F1.

Bob Rouleau

Hmm if Toyota, BMW, Renault and Mercedes pull out due to the downturn it will leave us with Ferrari 1 instead of F1.

CME

Wasn't there talk years ago of the big manufacturers moving to their own series and leaving the F1 circuit. Well now would be good time to pull that stunt.

Also if they want more passing - go old school and bring back the 3rd pedal.
Chet

entdoc

Just read Audi quit ALMS.

richc

Audi concentrates its motorsport programmes for the 2009 season on the new R15 TDI sport prototype for the 24 Hours of Le Mans, the re-worked racing touring car A4 DTM and the newly developed R8 LMS for customer use in the GT3 class. Audi will not be represented by its factory team Audi Sport North America in the American Le Mans Series in 2009.

As a result of its newly aligned motorsport programme Audi offers its motorsport customers a bespoke vehicle concept for the first time: Audi Sport developed the new R8 LMS specifically to suit the user-friendly and cost-effective requirements in the production-based GT3 class in international motorsport. The powerful 500 hp plus race car based on the Audi R8 is due to be delivered in order to prove itself on track throughout the 2009 season.

The American Le Mans Series involvement will not be continued. Audi entered the American Le Mans Series in the year 2000 and has been instrumental in building up this championship ever since. The championship developed to become one of the most fascinating motorsport series within a few years, which offered and still offers the ever increasing fan community exciting motorsport. The ALMS is also recognised internationally and is regarded as the world's best sportscar championship. "The decision to withdraw was a very difficult one also for these reasons. Furthermore, with the Champion racing team we also had a partner that operates at the highest level. The extraordinary dedication and precision of Team Champion was the key to Audi's victories over the last few years in America. We achieved an unprecedented winning series together. Since the 2000 season Audi has won the LMP1 title nine-times in succession in this high-calibre sportscar championship. Our brand dominated proceedings last season by taking seven wins in eleven races. TDI in racing supported the market launch of Audi TDI technology in the USA perfectly," says Head of Audi Motorsport Dr Wolfgang Ullrich positively of the AUDI AG involvement in the ALMS.

Even though AUDI AG concentrates its factory involvement at European venues throughout the 2009 season in these economically tough times, the American motorsport friends will be treated to a premiere: The completely newly developed Audi R15 TDI sports prototype should make its debut on
21 March 2009 during the 12-hour race at Sebring, Florida (USA). This international sportscar classic, which should be contested by Audi Sport Team Joest, is traditionally regarded as excellent preparation and final test-race for the 24 Hours of Le Mans (France). At the same time, the race at Sebring with its special demands made of man and machine guarantees excellent motorsport.

gota911

Honda quits F1

OK, that's the last straw. I'm selling my Accord!