The financial crisis around the world has been touted in the news. Of course, many feel we are only really starting to see the actual effect on the ground. With the announcement that Honda will close its Formula One team, the auto industry is starting to show the effects.
Technically, Honda is going to try to sell its Formula One operation before closing it. Given the current economic environment, it seems highly unlikely that a private investor can be found to keep the team afloat. The powers that be at Honda seem to realize this, particularly since they have given only a 30 day window for the sale to occur.
Assuming the closure occurs, it raises questions throughout the motorsports world. Honda is, after all, one of the more financially stable companies in the auto industry. If they are pulling way back, one has to question whether other teams will be doing the same. Toyota is facing major sales drops and Renault has never been a manufacturer viewed as totally committed to F1. If all the team drop out, one has to wonder if the viability of continuing F1 would even be possible.
In truth, the chances of more manufacturers pulling out of Formula One are not as likely as they were with Honda. Why? Honda has had minimize sponsorship over the last two years. Either because the car was so bad or it decided to plug its own name, the team simply never had a tobacco, bank or cell phone company paying it tens of millions of dollars in sponsorship money like the other teams.
The derailment of the Honda effort in Formula One raises questions on a bigger scale. Honda has taken a hit in the economic downturn, but the company is hardly on the cusp of bankruptcy. The same cannot be said for GM, Ford and Chrysler. Bailout discussions with the government are ongoing, but how excited is Congress going to be about money being spent on stock car racing? Given the sure lack of enthusiasm, how will NASCAR be impacted moving forward? Nobody can be sure, but NASCAR and the teams cannot be feeling too comfortable at the moment.
The economic troubles around the world often seem to be from another planet given the problems faced by multinational corporations that individual cannot really relate to. It is only when this news filter down to our daily lives in the form of job losses and the like that we realize it is an entirely real problem. For motorsports fans, the Honda F1 failure is the first sign of problems in motorsports, but most likely will not be the last.