Honda to pull out of Formula One

[joaquiboy]

LONDON, Dec 4 - Honda are pulling out of Formula One and will close their team down if no buyer is found by the end of the year, a senior source at a rival team told Reuters on Thursday.

"They have a month to find a buyer, otherwise they are closing the team," the source quoted Honda team bosses Ross Brawn and Nick Fry as telling a meeting of the Formula One Teams' Association .

"It's very, very sad for Formula One to see a team with the heritage of Honda leaving the sport," added the source, adding it was no real surprise given the team "were running up costs to a level that were self-evidently unsustainable".

Another source said the staff were told they would be on three months' notice from January if no buyer was found. The season starts in Australia on March 29.

There was no official confirmation from the British-based team, whose staff were told in a meeting at the factory on Thursday evening.

However, a spokeswoman said there would be a statement from Honda Motor Corporation on Friday.

The departure of Japan's number two carmaker, with their sales and profits battered by the global financial crisis, has huge implications for the sport.

TIGHT TIME-FRAME

It would also leave Britain's Jenson Button without an immediate drive for 2009 -- although some teams have yet to confirm their lineups.

Brazilian Bruno Senna, the 25-year-old nephew of the late triple world champion Ayrton, had also been tipped to take the place of his veteran compatriot Rubens Barrichello at Honda next season.

Honda's exit will leave the $1 billion sport, dominated by carmakers, facing a depleted grid of just 18 cars if no buyer with deep pockets can be found in the extremely tight time frame available.

Formula One sources also fear that other major manufacturers, with their factory production suspended and thousands of staff laid off, could follow Honda's example.

Honda, along with Toyota, have been the big spenders in Formula One in recent years.

Brawn, the former Ferrari technical director who won multiple championships with Michael Schumacher, was hired to run the team after he returned from a one-year break at the end of last year.

Despite their resources, Honda had a dismal 2008 season and were pinning their hopes on next year's new rules levelling the playing field.

Button, a winner for Honda in Hungary in 2006, scored just three points while Barrichello took 11. The team finished ninth overall.

The last team to leave Formula One was Honda-backed Super Aguri, the struggling tail-enders who folded for financial reasons in April and left Britain's Anthony Davidson and Japan's Takuma Sato without a drive.





Now what...


I personally would love to see Jenson Button at Maclaren together with Hamilton para magka-alaman na.

And where does Ross Brawn go? I'm sure teams will be scrambling to get his services

And Rubens? well he's already on the way out anyhow...

[wrx265_karter]

Beat me to the punch. Well, this isn't good for the sport in general however with the global financial crisis this somewhat doesn't come as a surprise. I wonder how professional motorsports, which majority of revenues come from corporate sponsorships, in general will be affected by the economic downturn. It would a shame to see F1 start to loose teams one by one because of this. I hope this won't be the case.

[Conan®]

Honda has pulled out from Formula 1 in the past for "lesser" reasons in spite of being dominant at that time.

[Accord GTR]

Looking on the bright side, freeing over $400M from their F1 budget will allow them to support many other lower forms of motorsports or give them more R&D for better cars in the future.  F1 is not the only racing series people watch anyway.  There's so many other series.

But yeah, it would be a pity to see them leave F1.  At least they're not in the position of GM and the other "Big 3" automakers.  It's a good business decision.

[AM]

Honda Quits Formula One to Cut Costs as Profit Falls

By Naoko Fujimura and Dan Baynes

Dec. 5 (Bloomberg) -- Honda Motor Co. withdrew from Formula One racing, cutting at least 20 billion yen ($216 million) in costs after the carmaker slashed its earnings forecast, fired assembly workers and reduced production.

Japan's second-largest automaker may put the Brackley, England-based team up for sale, President Takeo Fukui said today at a news conference in Tokyo. Honda will also no longer supply engines to other teams.

Honda cut its profit forecast 13 percent in October as the recession in the U.S. cripples car demand. Max Mosley, president of F-1 ruling body the Federation Internationale de l'Automobile, has said the $1.6 billion teams spend annually on the racing series is "unsustainable.''

"Honda's withdrawal highlights just how awful the situation surrounding the auto industry is,'' Koji Endo, an analyst at Credit Suisse in Tokyo. "Other teams may follow, and the F-1 may not be held in the future.''

Honda's vehicle sales in the U.S., the company's most profitable market, plunged 32 percent in November, the most since 1981, as the economic slowdown and the weak consumer sentiment hurt demand for Civic models.

"This difficult decision has been made in the light of the quickly deteriorating operating environment facing the global auto industry,'' Fukui said. ``Honda must protect its core business activities.''

Development Emphasis

Honda needs to speed up development of diesel engines, hybrid and small cars, said Fukui. The 400 engineers who work on Formula One will be reassigned to those projects, he said. The company will review all of its businesses as economic conditions may remain poor, he added. Honda plans to continue racing in the MotoGP motorcycle series and U.S.-based IndyCar.

Operating the Formula One team cost about 20 billion yen annually, Fukui said. The figure does not include development costs for the engines and cars.

The company's stock has dropped 56 percent this year, set for the worst annual performance since at least 1975. The shares fell 1.9 percent to 1,650 yen at the close of trading in Tokyo.

Honda finished eighth and ninth the past two seasons after placing fourth in 2006 on its return as a constructor. Ross Brawn, the former Ferrari technical director who helped Michael Schumacher win five straight driving titles, was hired to run the team 13 months ago.

Honda was the sport's biggest spender in 2008, the U.K.'s Daily Telegraph reported. The team this week canceled an end-of- season media lunch at a Michelin starred-restaurant near Oxford, England, the newspaper added.

Nine Teams

Its withdrawal will leave the sport, dominated by carmakers including Fiat SpA, Renault SA and Toyota Motor Corp., with nine teams and 18 cars if a buyer can't be found. The 2009 season- opening Australian Grand Prix is scheduled March 29.

Toyota has no plans to withdraw from the sport, said spokesman Hideaki Homma.

The last team to quit Formula One was Honda-backed Super Aguri, which folded in May because of a lack of funding.

Honda's decision is the latest blow to hit the sport in the past 18 months.

Earlier this year, F-1 was rocked by the distribution of a sex video involving FIA President Mosley which led to some carmakers voting for his removal. In 2007, McLaren was kicked out of the constructors' championship and fined $100 million after its chief designer, Mike Coughlan, was found in possession of 780 pages of technical documents belonging to Ferrari.

Lower Earnings

Honda expects operating profit of 550 billion yen for the 12 months ending March, the lowest in eight years. The carmaker cut its forecast as the yen's 39 percent gain against the dollar squeezes its profit. Every 1 yen gain against the dollar cuts Honda's annual operating profit by 18 billion yen, according to the company.

The company yesterday said it plans to offer early retirement for workers at its U.K. factory and will cut 490 additional temporary jobs in Japan, as demand slumps in overseas markets.

Honda, led by founder Soichiro Honda, owned a Formula One team as early as 1964, even before it began making cars in 1967.

It returned to F-1 in the 1980s as an engine supplier, then in 2004 purchased a stake in the BAR team from British American Tobacco, which it bought out a year later to form the Honda team for the 2006 season.

Jenson Button and Rubens Barrichello are the team's current drivers and could be left without a seat for next year's championship.

To contact the reporters on this story: Dan Baynes in Sydney at [email protected]; Naoko Fujimura in Tokyo at [email protected].

Last Updated: December 5, 2008 01:46 EST

-http://www.bloomberg.com/apps/news?pid=20601116&sid=a17TKcBUVtPg&refer=africa

[z_lynx]

good move for honda, pero sa tingin ko dapat couple of years ago pa dapat sila nag pull-out since there f1 performance is really hurting honda's image, ( no flames please my own honest opinion lang ito,).

so whats going to happen to ross brawn, rubens, and jenson button?

pls,,,,,,,,,,,,,, AUDI sana pumalit or prodrive......................

[nielracing]

well i think its a good decision na rin for honda to pull-out from F1 since it seems wala luck is not is not on their side and they also make little progress with too much cost..

[Crazy Eyes]

Nakakalungkot nga.  Good decision though..

[JJ88]

it's so sad.... I wonder if toyota will follow? Anyway, maybe honda will start producing more performance oriented cars now that they freed up all that money.... good for us, the consumer, if ever!!