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16 Dec 2008 06:00
At the start of last week a message arrived from the Honda formula one team, cancelling an annual lunch for the British media due to have been held on Thursday at Le Manoir aux Quat’Saisons, a restaurant with two Michelin stars in Oxfordshire, a short drive from the team’s headquarters. The abrupt disappearance of a blow-out for the hacks turned out to be a straw in the wind; three days later a hurricane tore through the 100-year-old sport.
Around the time the well-fed journalists would have been making their way home, the 650 Honda personnel were hearing of the company’s decision to withdraw from grand prix racing.
With sales of its road cars down by more than 30%, the Japanese company is no longer prepared to subsidise a team capable of spending £25 000—the cost of a good family saloon—on a gadget-encrusted steering wheel for Jenson Button’s car.
This is a sport in which excess and luxury have become a way of life.
Commercial sponsorship, introduced in the late Sixties, has been exploited to shape not just the stratospheric technology of formula one, but the lifestyles of those who have grown rich from it, from veterans such as Bernie Ecclestone, with a £2-billion fortune from his role as the sport’s ringmaster, to Lewis Hamilton, Britain’s new world champion, who is already earning more than £10-million a year in salary, endorsements and sponsorships.
This week’s confirmation of the Honda withdrawal indicates that the era of conspicuous consumption is coming to a shuddering, tyre-squealing halt.
If the first big loser in the current recession is the motor industry—and the signs are everywhere, with BMW’s Mini factory in Oxford starting its Christmas shut-down two weeks early, Aston Martin laying off 600 workers and, across the Atlantic, Detroit’s Big Three automobile manufacturers asking their government for a $34-billion handout in order to stave off imminent bankruptcy—then formula one cannot expect to escape the consequences. Honda may have been merely the first to pull the trigger.
Their Japanese rivals Toyota, the most lavishly funded team in the paddock with an annual budget of more than £300-million, may well follow suit after seven seasons without a win, and there must be questions about the participation of other major manufacturers—Renault, BMW and Mercedes-Benz (suppliers of the engine that powers Hamilton’s McLaren)—who were lured into the sport by the promise of exposure to massive TV audiences. On the most pessimistic reading of recent events, only Ferrari, the most profitable arm of the Fiat empire as well as the biggest name in formula one, appears immune to an epidemic of boardroom panic that could put formula one back in the hands of private teams, as it was in the days of Jim Clark and Graham Hill.
Ecclestone was bullish this week. “I think formula one is in no bigger crisis than any other company,” he told the BBC. “The world is in crisis at the moment, but the world won’t stop, that’s for sure. Everyone has been working like crazy to reduce the necessity to spend to be competitive.”
Once again, however, Max Mosley appears to have got it right. Having spent part of the summer convincing the high court that his orgies in a Chelsea basement were not Nazi-themed, now the 68-year-old president of the FIA, motor sport’s governing body, has the hard evidence to back his warnings that formula one must slash its costs or face dire consequences. The problem, he says, is getting the teams to listen.
“It’s as if we’re all on an ocean liner, sinking,” he said, “and these people are talking about the colour of the wallpaper in their cabins, whereas anybody sensible would be looking for a seat on the lifeboat.”
Last week Mosley told the teams of his plan to cut costs “not by 20% or 30%, but by 80% or more” from 2010, enabling them to compete for the world championship with budgets in the £30-million to £40-million range. His proposals start with the use of a standard engine and transmission which teams could either build themselves, to preserve their image as car constructors or buy from a supplier for less than £6-million a season.
He also suggested other major teams might follow Honda out of the sport “unless we demonstrate to them that this level of expenditure is going to cease”.
Another way of cutting costs would be to reduce the top drivers’ salaries. “That’s much easier,” he said. “You just tell them, ‘We can’t give you £20-million. We can only give you £1-million.’ That’s an awful lot more money than they’d earn from doing anything else.”—
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