Formula One Presence Is Victim of Honda Cost-Cutting
By Michelle Krebs December 5, 2008Honda Motor Co. withdrew from Formula One racing as part of its cost-cutting efforts.
Honda is looking to cut costs by $216 million. Honda also has eliminated workers and reduced production to cut costs.
The cost cuts come on the heels of Honda slashing its forecast for earnings by 13 percent to its lowest profit level in eight years. Its stock has dropped 56 percent this year, setting Honda up for its worst annual performance since at least 1975. Honda reported U.S. sales dropped 32 percent in November, the biggest decline since 1981.
Honda, which was F1's biggest spender this year, placed its U.K.-based F1 team up for sale, and the 400 engineers working on the program will be re-assigned. Honda also said it would not supply engines to other teams.
Honda reallocate its resources to accelerate development of diesel engines, hybrids and small cars, the automaker said.
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