By Eiko Yabe
Just over a week ago, Honda CEO Takeo Fukui dropped a bombshell in the automotive world by announcing that it will no longer be participating in F1 races. Since it started racing F1 in 1963, just three years after the company manufactured its first road car, Honda has won a grand total of three grand prix. Judging by recent results, Honda weren’t exactly providing their supporters with much hope for another one soon, either...
At a press conference recently, CEO Fukui tearfully told the assembled press that it was time to batten down the hatches.
“Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount,” he said. “A recovery is expected to take some time.”
Whether this decision improves or damages Honda’s public image in the long run, especially within the international market can only be known in time.
The EU banned tobacco advertising on F1 cars in 2005, and Honda has since suffered a massive loss in funds generated by sponsorship. The team’s performance on the circuit and the fact that the technologies developed didn’t benefit the main R&D sector, meant that Honda couldn’t justify the extortionate costs needed to keep the two gas-guzzling cars on the track. An insider told Fuji Sankei’s Business.jp that 740 F1 specialists and 10 billion yen each year is needed to get a second off every lap. It is thought that most of this workforce will be getting their dismissal allowances very soon. On an uplifting note, however, the cash will be used to help Honda develop its eco-friendly image further by investing in new hybrid technology .
“We will enter into consultation with the associates of Honda Racing F1 Team and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale,” Fukui told the assembled media at the press conference.
One does hope that this brave step made by Honda will bring some more embarrassment to the American Big Three; GM, Ford and Chrysler, after their corporate jets fiasco at their bailout talks. It’s interesting to see how the American companies will justify their begging to Congress for a $34-billion bailout now that their Japanese counterpart has decided to deal with the problem in a more practical way. They could learn a thing or two from these Japanese firms, who have always managed to tighten their belts when times got tough.
Honda driver, Jensen Button told the BBC that he is confident that they will be scooped up in no time. There is speculation that there has already been some interest from the former Benetton and BAR F1 team boss Dave Richards. Richards hastily added that there will be no contracts signed until he reads all the facts, even though he believes that “a quick deal wouldn’t be too onerous”.
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