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Hope for Honda as costs set to fall?
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Hope for Honda as costs set to fall?
Posted By:   |  04 Feb 2009   |  1:08 pm GMT  |  0 comments

There is a deafening silence coming out of Honda at the moment. The initial deadline of 31st January has passed and now it seems that efforts are focussing on a management buyout. This, of course, requires capital funding, which is in very short supply in the world at this time.

Honda likes the idea of a management buyout because it will turn out to be much cheaper for them than simply shutting the factory down and laying off all the workers. There is some interest in the assets of the team, should they be sold off. I’m told that one of the America’s Cup yacht racing teams is interested in the new wind-tunnel which was commissioned just a couple of years ago.

But the picture seems to be that there are some players out there interested in F1 if the budgets can be brought down to a realistic level. There are people willing to play for £50 million a year, but none willing to play for £150 million. Cost containment is an area where much work is going on at the moment within the FIA and FOTA, the teams’ association and, from what I’ve learned in the past week, the next month will see some dramatic changes there.

What’s important to remember is that a team like Honda, which finished 9th in the world championship last season, will receive around £40 million from Bernie Ecclestones FOM company, its share of the TV and other commercial revenues. This is a pretty good start, if your total budget is only £50 million per year, but a drop in the ocean if you need £150 million to compete.

The hope for Honda is that over the next months the FIA is looking to slash the costs of competing to such an extent that it is realistic to go racing on a budget of around £50 million for an independent team.

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