Almost two weeks have passed since Honda made the shock announcement it was selling its F1 team. The deadline for what Honda calls a ‘credible’ buyer to be identified is a little over two weeks away. Will one be found?
Will Honda's cars be on the grid at the 2009 Australian Grand Prix?
- Don't know (11%)
- No (39%)
- Yes (50%)
Total Voters: 808
Shortly after the news of Honda’s F1 withdrawal team manager Nick Fry claimed he had serious offers from three different parties.
It’s not clear who the three are but one of them is believed to be David Richards who preceded Fry in his job and led BAR (before it became Honda) to second in the 2004 constructors’ championship. Richards is the boss of Prodrive, and was set to bring the company into F1 this year before the FIA’s attempts to secure the legalisation of customer cars fell through.
Richards has been linked to a takeover with backing from Dubai Investment Capital (who attempted to purchase Super Aguri earlier this year) and Formula 3 boss Trevor Carlin. Richards earlier spoke of F1’s need to severely cut costs and since then the FIA has confirmed wide-reaching new regulations to make major savings.
Will the promise of much cheaper running costs tempt Richards into taking on Honda? What of the rumoured other two ‘serious’ buyers? Will F1 be down to an 18-car grid in 2009?
Lustigson
16th December 2008, 7:41
I voted ‘Don’t know’, because I’m hopeful Honda will be bought, but I somehow doubt it will.
> … the FIA’s attempts to secure the legalisation
> of customer cars dell through.
Should of course be ‘fell through’. :)
milos
16th December 2008, 8:41
today news mentioned also GP2’s ART team, while Citroen/Peugeot allegedly denied they are thinking about F1
someone will take over and I hope (and believe) it will not be a manufacturer
Loki
16th December 2008, 8:46
Likewise to Lustigson, I voted don’t know – I hope they will be, but it’s doubtful merely from the lack of reported progress.
If I could afford the few hundred million running costs for the season I’d gladly buy the outfit!
Tim
16th December 2008, 8:57
I wonder whether Honda’s timing has had an impact on its chances of getting a sale done before the end of the year.
The announcement wasn’t even widely rumoured until a few hours before it was made. Even if Honda can be bought for a nominal sum, sorting out an operating budget in time isn’t going to be easy. I doubt ART, Carlin or even Prodrive could lay their hands on the money quickly. DIC would have the money but not the expertise.
I’m keeping everything crossed that we get an announcement in the next week.
ajokay
16th December 2008, 8:58
To see the potential they have there at that team, someone would be silly not to buy them, especially seeing as the up front initial down payment is only $1. yes there are the monumental fees that Bernie asks for, but to get the actual team for next-to-nothing is a bargain.
I hope someone does, at least.
Keith Collantine (@keithcollantine)
16th December 2008, 9:20
Richards’ Prodrive-run Subaru team has just quit the World Rally Championship. I suppose you could read that one of two ways for this discussion:
1. Prodrive can’t afford to go motor racing right now
2. They’re sacrificing the rally effort to get into F1
What do we think?
Lustigson
16th December 2008, 9:25
That’s not too surprising, Keith. Although quite a step for Prodrive. Afteral, they’ve been in WRC since 1990.
Sébastien Loeb mentioned some time last year that he would consider quitting WRC if the S2000 rules would be voted through.
Maybe Prodrive and PSA Peugeot Citroën will ally and run Button and Loeb in a Honda-Ferrari.
(Off-topic: since the Lola-designed Honda was aptly named ‘Hondola’, what would a Honda-designed, Ferrari-engined Peugeot/Citroën be called? Peugeondari?)
Keith Collantine (@keithcollantine)
16th December 2008, 9:35
Actually it seems the pull-out was Subaru’s decision.
winterbear
16th December 2008, 9:37
I just cant believe one of the Korean auto makers would not love to be in F1. They are trying to market their cars world wide and they have big credibility issues. I would think that they need the prestige boost that F1 would give them.
But I never hear of them being interested at all. hmm…
bernification
16th December 2008, 9:43
I voted no.
The sad truth is that it takes time and lots of money to get a team up and running, and given the current economic climate (that is probably going to worsen before it gets better), I just can’t see anyone willing to speculate that kind of money in (what has been) an under-performing team.
It would be fantastic if Dave Richards and Prodrive could get the finance together, as he has the track record (sorry- too early for puns, I know) that could make the difference in getting investors behind him.
Just if he has designs on the team, he’s keeping awfully quite about it.
Rob
16th December 2008, 10:01
Subaru have just pulled out of WRC… Dave Richards’ Prodrive ran the team… I guess they’ll be looking for something else to do now? :)
Tim
16th December 2008, 10:03
Keith – In some ways, Subaru’s WRC pull out is similar to Honda’s exit from F1.
Both companies had previously been successful at the top flight of their chosen branches of motorsport but had struggled for form in recent years. Both appeared to be in a position to make a step forward – not that I’m a rallying expert but I understand that the new Subaru had considerable potential. Both teams also effectively ran without external backers following the banning of tobacco sponsorship – in fact both were sponsored by BAT brands (Lucky Strike and 555).
In any event, it appears that both companies found it difficult to justify a significant investment for little return against a background of falling sales.
Mussolini's pet cat
16th December 2008, 10:17
where’s the ‘bloody hope so’ option?
Journeyer
16th December 2008, 10:31
David Richards said that Prodrive will be back in 2010, but probably not for 2009. With Suzuki also dropping out, that leads Citroen and Ford. It seems WRC might be in even deeper trouble than F1. :O
As for Richards, given his recommitment to the WRC, I’m now 50-50 on his chances to run New Tyrrell (for indeed, Honda’s current franchise can trace some of its roots back to Tyrrell). He has too many other problems to deal with.
Nik
16th December 2008, 10:34
I am surprised that nobody in the media has yet cited the correlating problems with the WRC, with only two manufacturers (Ford – close to bankruptcy themselves, and Citroen) remaining.
If Ford don’t receive a bailout from the US government (which is looking unlikely), then the WRC will be in bigger trouble than F1.
F1 has 50 times the TV audience of F1 (54 billion vs 860 million, cumulative). With F1 now stripping budgets back to a fraction of what they were this year and last, it makes more financial sense for a manufacturer or an organization like Prodrive to take on F1, considering the much greater net return.
Richards said of the exit of Subaru that Prodrive wont be laying anybody off, but rather allocating those resources to other parts of the company. So this might be a sign that they are readying an F1 team.
But, he also said that he expects Prodrive to continue its involvement in WRC, so they might just be taking a single year off on the sidelines (they are a supplier to other teams as well).
As for financing, the Abu Dhabi group turned around very quickly to purchase Manchester City. Apparently the deal was done in just a few days, and it all took place on the last day of the transfer window (right after buying the team, they made a dozen or so offers for players, with only 3-4 hours to go – they bought two players and spent 50M pounds+ in those few hours). So I don’t doubt that the UAE or Arab based investment groups can come in and finance an F1 team in time for the 2009 season, they actually have plenty of time.
Also, Honda have pledged to finance the team through the offseason, and the purchase price will probably be a fraction of the value of the net assets. FOM don’t collect fees when there is a change of control in a team, they just need the $40M pound deposit at the beginning of the season, which is what all teams pay.
Solid
16th December 2008, 12:33
wild guess: tata :)
Robert McKay
16th December 2008, 13:08
I’ll be amazed if Subaru’s pull out of WRC is related to Prodrive entering F1.
I suspect no buyer will be found.
It’ll be interesting to see if Honda extend the deadline once or twice or if the timeline they’ve suggested really is the deadline.
The parallels with F1 and WRC are interesting though.
Alex Cooper
16th December 2008, 13:17
I voted no.
It’s not a great advert for an F1 team is it? Honda: “Our F1 team costs us far too much to run. Would you like to buy it off us? You can have it for a dollar? Please?”
Richards and Carlin have been sniffing around F1 for a while but never made that commitment. Why would you buy a team this year when you can wait for the series to cost less in 2010?
GeorgeK
16th December 2008, 13:28
Were the Subby and Suzuki WRC exits due to economics or the pending rules changes?
If no one picks up the Honda gifting of an entire team then we are all more deeply into a financial depression than any of us realizes.
beneboy
16th December 2008, 13:37
Don’t Know.
I’d like them to be bought and as ajokay said, they’ve got plenty of potential, especially considering how early they started developing the new regulation car.
You just never know what’s happening with deals like this, how many knew Honda were going to pull out before the announcement was made ?
Journeyer
16th December 2008, 14:38
Richards and Carlin have been sniffing around F1 for a while but never made that commitment. Why would you buy a team this year when you can wait for the series to cost less in 2010?
Because you save yourself the trouble of paying 40 million to start a team from scratch. That’s the upside there, and I think Prodrive is really considering it. But the Subaru pullout is a big stumbling block for them.
Lustigson
16th December 2008, 14:49
@ Journeyer
> David Richards said that Prodrive will be back
> in 2010, but probably not for 2009. With Suzuki
> also dropping out, that leads Citroen and Ford.
> It seems WRC might be in even deeper trouble
> than F1. :O
At least WRC has customer cars. ;)
@ Alex Cooper
> Why would you buy a team this year when you can
> wait for the series to cost less in 2010?
Because setting up an entirely new team is way more expensive than buying a current one, albeit with (too) much personnel.
Adrian
16th December 2008, 15:48
David Richards isn’t stupid, I’m sure he sees the potential in the (ex) HondaF1 setup. However, if he seems to keen then it would lessen his bargaining power. Perhaps he’s waiting until the very last minute and will push for Honda to supply engines or something like that.
Aside from that speculation, you wouldn’t go out and make a multi-million dollar commitment without first going over the books, reviewing the team etc…
I actually think the first official confirmation we’ll get of a buyer is once the deal is done – these things aren’t best served by being carried out in the media…
I think it will be interesting to see how far Honda are willing to go to unload the team though, especially if the reports that if they fail to find a buyer they’ll still have to pay out on cancelled contracts etc are true….
Lustigson
16th December 2008, 15:58
Good post, Adrian. Any potential buyer knows that Honda will have to spend an extra 150 million dollars to dismantle the team. So they might want to persuade Honda to pay, say, 100 million, to take the team off their hands. Lessens the burden for the new owner quite a bit.
the limit
16th December 2008, 17:59
David Richards is without question one of the best guys out there to take the former Honda team forward, he knows the playing field better than most and his known to those inside of the team.
The WRC decision by Subaru may well prove to be a good indication. Now would be the ideal opportunity for Richards and Prodrive to make the jump, if they do not, then they are out of it all together.
Nobody has touched on how much money was borrowed, if any, by Honda to run their team? I am concerned that there maybe some factors hidden from us that we do not know about.
GeorgeK
16th December 2008, 18:29
“Nobody has touched on how much money was borrowed, if any, by Honda to run their team?”
I’d wager all of the facilities are mortgaged to the teeth, and based on Honda’s solid corporate credit rating it was the smart way to finance.
I’d have to believe any takeover would involve Honda eating their loan liabilities to a large if not total degree.
Keith Collantine (@keithcollantine)
16th December 2008, 20:09
A lot more people are voting ‘yes’ than I expected – I had an 80% ‘no’ vote in mind. You’re all much more optimistic than me!
N
16th December 2008, 22:08
Everything I have read about buyers has been super optimistic because we want the team to stay, especially the way otherwise rational people who were desperately searching for a reason PSA might want the team. The team is probably worth negative £300 million over the course of one season, it is nothing but a liability. If you wanted to run an F1 team with yearly costs of £50 million and 100 personnel (the goal of the cost cutting measures), would you start by buying a team that costs £200 million a year to run and has 600 personnel?
Loki
17th December 2008, 0:20
True, but then again, you may not have the chance to ‘buy’ a team like Honda, in the state that it’s in currently holding Button and Brawn and a supposedly good 2009 car. Their past 2 seasons haven’t exactly been something to list as “achievements” (other than bad car, bad car, bad car), but the ingredients are there for a good entry shot into F1.
When teams can’t sell, they’ll be sold off bit by bit. And I’d imagine starting your own team from the ground up would be even more expensive.
On one side of the coin, he team for sale is not a fleeting Minardi/Spyker/Midland/Jordan/Force India/etc is from a credible manufacturer who have already done the ground work (high initial costs) and have the people to do the job right. On the other side of the coin, the team for sale is a big global car manufacturer who’s had to call it quits at this stage of the game – if they had to bail, it doesn’t inspire confidence on more than several levels for any potential buyer.
Gman
17th December 2008, 4:39
Great discussion guys!
I voted “Don’t Know” because there is still time for the deal top happen, but obviously each passing day further reduces the likleyhood, at least from what we on the outside can see.
If Richards (or anyone else working with him) wants to get into F1, this is the perfect chance. Still, we all know that finances and politics trumps common sense in F1 all too often, so we can only stay tuned on this topic….
Winterbear- There has been some real discussion about one of the Korean carmakers entering F1 in the past year or so, but nothing positive from any of them yet. After all, do you think Bernie is putting a Grand Prix in South Korea in a few years for nothing?
Nik- Ford is in better shape than both GM and Chrysler, and was not asking for funding in the bailout bill that was defeated in the Senate last week. However, if the marketcontinues to go downhill or even just stay flat, they could be in deeper water than the present situation.
GeorgeK
17th December 2008, 14:45
Ford is in “better shape” than the other two because their chief (Andy Mulally) mortgaged everything with a Ford name on it and raised about 30 billion in cash, before the dreck hit the fan. If sales continue to fall or stay at current levels Ford will be in a similar bind as the others.
And to Mulally’s credit he stated he’ll reduce his salary to $1 a year if they use bale out funding.
Rabi Sultan
22nd December 2008, 13:10
I think the biggest factor for Prodrive taking over Honda would be there revenue stream, who would be their main sponsor(s) for the car?
Keith Collantine (@keithcollantine)
22nd December 2008, 14:29
Rabi – One step at a time! Honda did claim they were lining up sponsors for 2009, but do we believe them?
crossomotive
28th April 2009, 8:39
I also voted no for this topic.
b win
8th March 2010, 2:21
Gracias, que responde a la pregunta que he estado buscando para que se sea o no de poner las palabras claves al blog de comentarios.
anunturi auto gorj
21st September 2010, 0:37
General Motors will invest $483 million to make the current and next-generation Ecotec four-cylinder engine at the Spring Hill plant in Tennessee.The company will create 483 new jobs to be filled by employees who were previously laid off. The plan is contingent on state and local incentive agreements being finalized