Credit crunch hits Formula One

Honda.jpg

Two months ago, the blog noted that the credit crunch was starting to impact sport. Then the issue was high leverage, with the UK’s Football Association warning that the $5bn debts of the Premier League clubs were “high-risk”.

Now, its the turn of Formula One racing. Yesterday, Honda pulled out of the 2009 competition on cost grounds. And the head of its governing body, Max Mosley, said the sport was in a “desperate situation”.

With auto sales collapsing round the world, manufacturers can no longer afford the curent $220m a year cost of a F1 car. Maybe they could instead race versions of Nissan’s Pivo 2 car, recently highlighted by my blogging colleague Barbara? She says it even comes with a tax break in Japan.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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