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.

32 comments on “Honda: a one-off or the first of many?”

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  1. Terry Fabulous
    7th December 2008, 21:54

    I wonder what the Australian GP organiser are thinking right now? Surely there aren’t too many punters forking out $500 for what could be a heavily truncated grid.

    Sigh, my Jenson Button Honda Mouse pad at work looks a little sad today :(

  2. Errr….

    Well I am just considering a trip down under…

    A lack of Honda to laugh at will hardly spoil it for me…

    I can’t say I gave them much thought this year except to feel sorry for them…

  3. i think next year i’ll wear my 06 honda shirt during the opening f1 round… back then they had well designed gear and sponsors… and actually fought for race positions…

  4. Honda was a one off of the big names. Everyone else will be fine. They have good sponsors, or wealthy owners.
    Honda leaving is a shame for the sport, but it wont affect me being @ the 1st race

  5. theRoswellite
    8th December 2008, 7:26

    From Bucknum to Barrichello, from Ginther to Button, thanks HONDA, you’ve always been a quality organization.
    Come back soon.

  6. While I would be suprised if the any other team quits before the start of the season, I think in a few years time the team list will be different to what it is now.

    Some teams will be sold and renamed, and if Max gets his way with cost cutting, customer cars etc then we may even get more than 10 teams in F1.

  7. Why is budget capping a fantasy?

    I appreciate that a budget cap wouldn’t be straightforward because of cross subsidies within organisations and investment costs incurred in one year but the results used in another year.

    But, it isn’t beyond modern accounting practices to come up with something workable.

    Or is it?

  8. I say budget capping is fantasy because:

    1. I don’t believe they could enforce it.
    2. Even if they could, I don’t believe they could convince all the teams that it was being enforced.

  9. Re: Budget Cap.

    If Ferrari do some R&D at their factory are they doing it for F1 or their road cars ?
    The same is true for all teams with connections to production car manufacturers.

    Unless the FIA had people monitoring both the factories & the accounts then it is impossible for them to be able to tell who is really spending what, if the teams want to hide it then the accountants will find a way, that’s what they’re paid for.

    I doubt the FIA has the people who are able to effectively police a budget cap. We’d just end up with endless court cases over alleged spending.

  10. I agree a budget cap wouldn’t be the simplest thing to administer. But given we’re looking at a bad set of choices I reckon it’s worth a try.

    It would need thinking through very well, but surely it offers a better outcome than everyone driving with the same engine.

  11. In a perfect world then it’d be a good idea, unfortunately the teams can’t trust each other enough to go for it.

    A cap on RPM’s and a few other short term (3 years before review) development freezes could save a fortune, add a few standard components to the car and you’ve got yourself a sizeable reduction in engine costs.

    By reducing the aerodynamics on the cars there’d be less need for wind tunnels and computer modelling plus you get the added advantage of more exciting racing :~)

  12. No reaction from Renault or Flavio till date. I wonder what is going on overthere. Flavio used to always react… I place my bets on Renault to be turned into something like Briatore-Mechachrome by Australia.

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