JANUARY 16, 2009

What is going on at Honda?

We received reports yesterday from inside Honda Racing F1 that there is growing frustration at the way in which the management is handling the sale of the team, and questioning whether the management buy-out is the best way forward for the Brackley organisation. We decided not to react to these and investigate some more, but this morning there were reports of a similar nature in the Daily Mail, which seems to suggest that there are some within the team who are actively campaigning against the idea of a management buyout led by Nick Fry and Ross Brawn.

The Mail reports said that Daventry MP Tim Boswell, whose constituency includes the team‘s base in Northamptonshire, has reacted to requests from Honda staff concerned over their futures by contacting the Department of Trade and Industry (DTI) asking for an investigation. This is odd as the DTI was dismantled in June 2007 and replaced by a new Department for Business, Enterprise and Regulatory Reform (BERR), which does some of the jobs that were previously covered by the DTI, notably dealing with company regulation in the UK.

The chief target of the attacks appears to be Fry, who has been running the team in recent years - and did so before Honda bought the team from British American Tobacco. This is not unexpected as Fry is not liked by everyone in the F1 paddock and clearly there are some within the team who are worried. The attacks are not particularly logical as from what we can understand the buyout is not just involving Fry, but also Ross Brawn. This makes sense given that he has a better track record of winning in F1 than Fry could claim and investors are more likely to back him than to support Fry. The reports appear to be attempts to spoil the purchase, perhaps inspired by other bidders, or they may simply be because some inside the team fear that it might all go wrong and they will lose their jobs.

There is no doubt that whatever the deadline set by Honda, the practical elements of the situation are currently more important. The team needs an engine deal by the end of the month if it is to get things ready in time for the new season. The designers are probably already working on (and may have even finished) the design to integrate a new engine into the chassis (the signs are that this engine will probably be Mercedes-Benz) and so some time will have been saved. The only logic for the engine deal being delayed is that Mercedes-Benz will not move without a solid financial guarantees being in place and the Honda F1 people have not yet got those.

Fry himself says that it is not unusual for people to have a go at him, but says that Honda Motor in Japan has all the necessary checks and balances in place to ensure that the management buyout is correctly done, as one would expect from a large global corporation.

"The owners are Honda and they have two managers working fulltime with the management of Honda Racing to find the best solution," Fry says. "Any suggestion that there is a conflict of interest is completely unfounded. The team has been in constant dialogue with the BERR and they are full informed of the situation."

Ultimately, it will be Honda Motor that not only decides who will own the team, but will also decide whether to keep the team open or close it down. The latter option does, of course, exist but the loss of face for the company in Japan and the damage to Honda's global reputation would be such that it is probably in Honda's best interest to fund the engine deal if finding the money is a problem.

Keep up with us on Twitter.