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Posts Tagged ‘Budget’

Jarno Trulli in Toyota TF108 at Bahrain

Japanese car manufacturer Toyota is expecting to record it’s first ever loss at the end of the financial year in March. Following on from the initial prediction of a $6.7 billion profit, the corporation is now forecasting a loss of $1.7 billion in the wake of the global financial crisis which has hit the car market badly.

Despite this, Toyota’s F1 team have re-confirmed they are committed to the sport and will not be pulling out. This comes under three weeks since they last had to issue a statement confirming they would not pull out, following their Japanese rival Honda’s withdrawal from the sport. President of Toyota, Katsuaki Watanabe, said earlier today: “The change in the world economy is of a magnitude that comes once every hundred years. We are facing an unprecedented emergency.” But despite the strong words, he also said: “We continue F1 and other motorsport activities while cutting costs.” Toyota F1 president John Howett repeated the views of other F1 teams, saying he is more concerned about the 2009 regulations than the financial issues.

It may come as a surprise to many however, that despite Honda having a richer heritage in motor racing than Toyota, they feel the need end F1 participation to be seen taking action against the financial meltdown, which may weaken Toyota’s image outside the sport.

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Honda Logo from 2008

Honda ended hours of frantic speculation last night, by confirming that they will pull the Honda Racing F1 Team out of Formula 1 with immediate effect. The major shock announcement was made by the president and CEO of Honda, Takeo Fukui, who blamed the pull out on the global financial crisis.

The decision was made with little warning to anyone, with the only indication that the team may be in trouble coming last week after the cancellation of a dinner party. The Japanese manufacturer has been affected by the slump in the car market, and a reduction of sales has forced to the company to save money for 2009 by sacrificing their F1 team, which are predicted to have the fourth largest budget in the sport. The announcement comes at the worst possible time for team, who have been building their 2009 car since former Ferrari technical director, Ross Brawn, joined the team in November 2007.

The Brackley based team remain confident that the 700 jobs at risk will be saved, however. Team Principle Ross Brawn and CEO Nick Fry are looking for buyers and appear to have at least three serious offers from investors to save the first F1 victim of the credit crunch. It is also rumoured that Brawn will use his connections in Italy to secure a Ferrari engine for the team, now that the Scuderia will not supply engines to Force India.

The sudden nature of this announcement has shaken Formula 1, and leaves the sport in a worrying position, especially if the team cannot find a buyer. It is a stark reminder that F1 must see a drastic reduction in costs very soon to avoid a collapse of the sport. It is also a devastating blow for the supporters and everyone who works at Honda, with such high expectations and a promising 2009 season cut short before it even began.

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Mosley heads cost-cutting talks

FIA president, Max Mosley, will meet with the Formula One Teams’ Association in the days following this years Chinese Grand Prix to discuss urgent cost-cutting measures to secure the future of Formula One after 2009.

In an interview with the BBC on Tuesday, Mosley expressed serious concerns over the not-too-distant future of the sport, saying “If we don’t get it [cost-cutting measures] done before 2010, we will be in serious difficulty.” Mosley met with FOTA on Wednesday in what was later described as a ‘constructive’ and ‘positive’ discussion, agreeing to meet again after the Chinese round, in just over two weeks time, where they will begin talks on “the strategic decisions which are now urgently required, having regard to current world-wide economic problems.”

This follows the news on Tuesday that Mosley would negotiate with the newly-formed FOTA group towards significantly reducing the cost of the sport.

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