Honda: a one-off or the first of many?

Posted on | Author Keith Collantine

Rubens Barrichello in Honda\'s final Grand Prix at Brazil
Rubens Barrichello in Honda's final Grand Prix at Brazil

Did Honda drop its F1 team because it was performing too poorly to be worth keeping? Or are car manufacturers going to begin cutting their F1 teams, irrespective of how well they’re doing, to save money?

A one-off

This side of the argument insists that although Honda was faced with severe economic pressures, the board wouldn’t have dropped its F1 team had it been more successful. Therefore, Honda’s withdrawal from F1 was just a one-off: the natural culling of an un-competitive outfit.

It’s not difficult to paint a picture of Honda as a struggling team: The Brackley outfit had been on a downward trajectory since 2004, when the team was still called BAR and run by David Richards. Once Nick Fry took over things began to go wrong: starting with the 2005 fuel tank controversy and the team’s poor form, failing to score at all in the first half of the season.

It over-promised in the off-season before 2006 and then under-delivered, except at the Hungaroring, where Jenson Button took a fortunate win thanks to wet weather. The team’s woeful 2007 and 2008 campaigns revealed its true performance level, and when the credit crunch came Honda had no reason not to strike a line through its $400m entry on the balance sheet.

Even if you don’t agree with that pessimistic assessment of Honda’s three years as a full-blooded F1 constructor, its decision to focus development in 2008 to maximise its opportunity with the new 2009 regulations may have added another nail to its coffin. If the RA108’s development had not been sacrificed for the RA109’s, perhaps it could have been a regular points scorer in 2008 and things might have been different.

Either way, although Honda needed to cut costs, it wouldn’t have canned its F1 team if it had been doing better. Therefore, the other manufacturers are unlikely to leave, as four out of the five won races this year and can expect to be in championship contention in 2009.

The first of many

Are more F1 teams going to quit the sport?
Are more F1 teams going to quit the sport?

The counter-argument to that says that car manufacturing is in such grave trouble and F1 costs are so high that it is inevitable more manufacturers will withdraw.

Yes, F1’s major manufacturers re-affirmed their commitment to the sport in the wake of the Honda pull-out. But not all their words came from the CEOs, the Carlos Ghosns and the Norbert Reithofers. They either came from the manufacturers’ motor sports directors such as Norbert Haug, or as unattributed statements. As Max Mosley himself admitted:

The man who runs the competition department wants a big department with the maximum budget and maximum employees. Those on the board want the maximum success from motor sport with the minimum cost. It is really only the man on the board that is concerned with cost.

The people who run the motor sport team won’t make the decision to cut it or keep it. This quote from James Allen reveals the dizzying speed with which an F1 team gets axed in the present economic climate:

It seems that the November sales figures arrived on [Honda CEO Takeo] Fukui?s desk on Thursday and were far worse than expected. Against that backdrop Fukui took the decision. Interestingly Honda had held a press conference on Thursday to announce a new car and he made no mention of F1 then. When quizzed about this after the withdrawl announcement on Friday morning Fukui said that it had been a sudden decision.

And Honda isn’t the only car maker in trouble: Toyota’s US sales fell by 34% in November. BMW’s worldwide sales fell 25% in November. Mercedes’ fell by 27%. Most F1 sponsors are taking a hammering too.

At these times a nine-figure sum on a balance sheet is going to attract attention a long time before an eight-figure one. The fact that Honda has withdrawn from F1 but not British Superbikes, Moto GP and the Indy Racing League proves two things: the motor sport is a justifiable activity for a car manufacturer to be involved in at these times, providing costs are sensible, and that success is not a pre-requisite for their involvement to continue.

Had the FIA imposed greater cost cuts sooner things might have been different. But, although Max Mosley has been pushing for cost cuts for some time, they have not gone nearly far enough. The car manufacturers take some of the blame for not pushing for greater cuts, but the FIA is also accountable.

This season past was supposed to be the first year of legal customer cars, allowing independent teams to compete more cost-effectively in a manner which was commonplace in F1 in the past. But the FIA failed to get the rules sorted, and so the putative Prodrive team (which planned to use ex-McLaren chassis) was put on hold. Then the FIA dallied with the fantasy of budget capping and restricting the amount of time teams could run their wind tunnels for, which came to nothing.

The FIA either couldn’t decide how to cut costs or lacked the will to do it properly. When Mosley found his back against the wall in April he had no trouble finding the backing to keep himself in a job. Might that political capital have been better spent on guaranteeing the long-term survival of Formula 1?

Mosley’s offer of cut-price standard engines may be too little, too late. It may even signify that he has given up on the idea that the manufacturers will remain in the sport and it laying the ground to usher a new era of independent teams into the sport. It is only a matter of time before more teams announce their withdrawal. F1 in 2008 is in the same position the British Touring Car Championship was one decade earlier.

What do you think

I’m not sure which side of this debate I fall on just yet. But the shocking speed with which the axe fell at Honda makes me paranoid that more will follow.

So I’m leaning towards the ‘first of many’ side of the debate. And, like many of you, my suspicion falls on Honda’s Japanese rivals Toyota as the next most likely domino to topple.