Honda and Formula 1

Call me a cynic but I think that Sir Richard Branson ruled himself out of Formula 1 over the weekend by making remarks which suggested that he has no real intention of buying the Honda Racing F1 and is simply using the story to generate free publicity for Virgin.

Branson said that “there are faults which would need to be rectified before we moved into the sport”, citing the need for teams to be profitable and for F1 to become more environmentally-friendly. Given that a decision to save Honda is needed within days, it is fairly clear that Branson will have to make his decision before any such changes can be made. In addition to that the cantankerous members of the F1 community are not going to roll over and change everything just for Branson.

It does not work like that.

Branson did not deny talks with Honda but nor did he confirm them, hiding behind the argument that if he was in talks to buy the team there would be a confidentiality agreement in place to stop him talking. Honda sources are saying that Virgin has made a bid and that this is now in competition with the management buyout but who knows how serious those talks are? It is believed that there is a deadline this week by which the team must give Mercedes-Benz financial guarantees for a $10m engine supply for the season ahead. If that deadline is not met then the team has little future.

What is interesting to me is that Bernie Ecclestone went to The News of the World over the weekend and told the newspaper that he had offered to help save Honda and that his offer was rejected. One has to ask why Ecclestone did that. He does very little without there being logic behind it.

So what did it achieve? It told the world that he tried to save the day. This suggests that Bernie may think that Honda Racing F1 will not be saved and by putting out the story about trying to help he will avoid any criticism of allowing the team to go to the wall. That is one possible reading of the situation.

Alternatively, he could just be miffed that the Honda management buyout did not want him involved. With an involvement in a team that would have given Ecclestone the chance to break up the Formula One Teams Association. Nick Fry and Ross Brawn would understand that an alliance on that basis would not be much good in the long term.

Do they have the money to go ahead and save the team? No-one really knows. All those involved have gone very quiet in recent days, suggesting that they are bound by confidentiality agreements. And if that is the case then a deal is probably in the pipeline.

I find it hard to believe that Honda would simply let such an investment go. Yes, it needs to make the company look better by getting rid of the F1 programme, but the executives in Japan have no justification at all if they simply give away such assets. It is so much better to hand the team on to trusted people and give them a helping hand to get the thing up and running, while quietly retaining an option to buy the team back in the mid- to long-term. The current economic crisis is not the end of the world as we know it. It is a serious check to the ambitions of the car industry, but Honda is still a strong company. It still has a sporting heritage and it still has F1 ambitions.

The current president and CEO Takeo Fukui joined Honda because of its involvement with F1 in the 1960s. He has been with the company for 40 years and has been at the forefront of the company’s racing activities for a very long time. He is not going to just throw it all away. The Honda culture allows for failure. It is better, they argue, to fail many times and be successful once than never to attempt anything. Fukui’s attempt to win in Formula 1 has not been a success. He will retire in June.

Honda will go on. The company  is committed to building cars to help improve the environment and if F1 technology is moving in that direction there is great value in the sport not simply to advertise for Honda, but also to develop new ideas and to train young engineers, giving them the racing attitude that has made Honda such a successful company over the years.

I doubt Honda’s dream in F1 is really over – and I doubt that Fukui and his fellow executives will simply give away all the assets they have built up in Brackley. Yes, it may be a good moment to drop out of the sport, but it would be amazing if the team was not on a piece of elastic which would take it back to Honda when times get better.

That would explain why Honda did not want Bernie Ecclestone involved…