Crunch hits Formula One as Honda stalls

Hundreds of British workers could be out of a job after Honda's shock decision to dump its F1 team...

Last Updated: 06 Nov 2012

Honda has announced that it’s pulling the plug on its Formula One team, blaming the impact of the world financial crisis. With car sales in the doldrums, it’s clearly become impossible for Honda to justify spending £200m a year on a F1 team (particularly a rubbish one) – and so it’s decided to bring its 50-year association with the sport to an abrupt end. The surprise news has sent the sport into a tailspin, and also puts the jobs of the 800-odd staff at Honda’s Brackley plant at risk – there’s still a slight chance the team might be sold, but the chances are that they’ll all be made redundant by Christmas.

The suggestion is that Honda has been forced into this by angry shareholders. With car sales tanking everywhere, forcing the carmaker to cut back its manufacturing operations, investors are not surprisingly dubious about Honda splurging so much cash on F1. And you can see their point. Despite the high hopes associated with Honda a few years back, the team seems to have gone backwards in recent seasons. This year it finished second-last in the manufacturers’ championship, while highly-paid driver Jensen Button was rock bottom of the drivers’ rankings. Not exactly the best advert for Honda’s technical wizardry...

Button, who had a £50m five-year deal with Honda, will certainly be the most high-profile addition to the growing ranks of the UK unemployed. But given that he’s apparently banked over £30m from his Formula One career so far (total race wins: one), we’re unlikely to see him queuing up for his Jobseeker’s Allowance while he tries to find another drive. Instead we’ll reserve our sympathy for those 800 factory workers, who will now spend their Christmas preparing for the dole...

It’s also rotten news for Formula One – Honda was seen as one of the best-funded and most committed teams in the sport, and their withdrawal will increase concerns that other teams will end up following suit. Motorsport is an expensive business, and despite the huge amount of revenue F1 generates around the world, it’s pretty hard to see how it can continue to sustain as many teams as it currently does – especially as the downturn bites. FIA president Max Mosley has long been arguing that the billions spent by the teams each year is completely unsustainable, and they’re slowly starting to commit to cost-cutting measures. Who knows – perhaps if Mosley hadn’t spent the last year in the papers for all the wrong reasons, they might have done so sooner.

Honda is clearly struggling to find its mojo - which reminds us of what its legendary founder Soichiro Honda told MT about his decision to retire, back in 1981: 'I have lost my sex power. I won't say I have lost all my sex, but I must admit that frequency of doing and recovery have not been the same as when I was young. Great leaders love sex, and I am not a great leader any more.' That's certainly one way of looking at it...

In today's bulletin:
Bank lenders drag their feet over rate cuts
Crunch hits Formula One as Honda stalls
National identity cards a really bad IDea
MT's Week in 60 Seconds
Straight-talking tips, from YouTube

Find this article useful?

Get more great articles like this in your inbox every lunchtime

What's the most useful word in a leader’s vocabulary?

It's not ‘why’, says Razor CEO Jamie Hinton.

Why collaborations fail

Collaboration needn’t be a dirty word.

How redundancies affect culture

There are ways of preventing 'survivor syndrome' derailing your recovery.

What they don't tell you about inclusive leadership

Briefing: Frances Frei was hired to fix Uber’s ‘bro culture’. Here’s her lesson for where...

Should you downsize the office?

Many businesses are preparing for a 'hybrid' workplace.

How to make your team more accountable

‘Do as I do’ works a lot better than ‘do as I say’.