BBC further reports:
Honda recently cut road vehicle production as a response to the global economic crisis - the company's sales in its key US market were down 30% last month.
F1 is a notoriously expensive sport in which to compete, and teams have spent recent months in intensive discussions over cost-cutting measures.
Max Mosley, president of world motorsport governing body the FIA, recently urged teams to find ways to reduce costs.
In an exclusive interview with the BBC, Mosley described Honda's withdrawal as a significant warning to the rest of the teams to start cutting costs dramatically.
Mosley wants to make drastic changes for the 2010 season - including making a standard engine and gearbox available to all teams at a projected cost of 5m Euro (£4.4m) per team.
The idea is opposed by the road-car constructors still in F1, who are proposing a new engine formula of their own.
Honda's decision came as a surprise within the sport as it curtails the company's involvement just when they were expecting to deliver on their investment.
Honda appointed [as racing team leader Ross] Brawn, the man who masterminded seven world titles for Michael Schumacher at Benetton and Ferrari, as their team principal prior to the start of the 2008 season.
His arrival was seen as the signal for the start of a concerted push for success by the company after several seasons as also-rans.
Honda has always seemed a well-run operation, making sound cars and sound in the two-wheel market, a niche below BMW in both. They know what to cut, the frills, when cutting time looms. I have not seen any news of troubled Detroit scaling subsidies for NASCAR. Who knows, they might be making money there. But don't bet on it. Last night on CSPAN they broadcast Senate hearings on the US auto bailout proposal. It looked dismal. A Moody's analyst was one of the testifying panel, which including the Auto Workers head, and CEO's of GM, Ford and Chrysler. The Moody's witness' assessment was GM was too debt heavy and could not service outstanding debt at current sales levels - capital investment was needed to swap out for some debt, but is it a good risk? If taxpayer "capital" is used, what's the security? Zilch? That's the appearance.
Dealership closings nationwide were discussed, Denny Hecker being the local poster child for the crisis there.
It is surprising how quiet the credit card companies are. Collecting their usury - after a few years ago putting lobbying cash into making it hard to bankrupt on their usurious hold - trying to keep below the radar instead of being flushed out and bagged for being the greed-mongers they are. And the Brits claim to be more profligate than we are, on spending what they don't have.
Links below. That one on a British Christmas credit card promotion - 227% annual interest, is astounding.
Only snowmobile and ATV purchasers should be subjected to that kind of interest on their purchases - there would be justice in that. If Polaris could figure a way to boost 227% annually from their clientele, they'd have a credit arm to the business and spending on lobbying in St. Paul on the hilltop, to keep the credit cash cow productive. Perhaps that's already happening.
227% !!! Wow. The "Argos Easy Shop card managed by Provident Bank." The bank may be provident; the borrowers, go figure.
Hecker: here, here and here.
British credit crunch: here, here, here, here and here.
_______UPDATE________
Earlier I posted here on the hubris of the auto corporate bosses, and their cluelessness in flying in three separate corporate jets to attend DC legislative hearings begging for free money.
As a show of contrition, fitting these folks, GM reportedly canceled leases on two of the five corporate jets. How does that not make me feel much better about their position?
In a picture worth a thousand words, Gary at letfreedomringblog.com posted about the competitive disadvantage the "Big Three" claim to suffer due to collective bargaining agreement terms and conditions, here. There's something to that, and the union was at the last DC Senate hearings session and will have to adapt also, if there's to be a bailout. The big question, is it just more and more money down a rathole, and then, even if it is that, is buying time now with the economy bad still a good idea, to not allow it to worsen?
I doubt there's any easy answer. It is judgment, and how do you change some corporate cultures? Ford hired a Boeing executive to lead the business, but the Ford family always is in the wings, calling shots. It is a moribund industry, so under the paradigm of creative destruction, should it be allowed to perish, as best option, long term. Keynes said that in the long term we're all dead. There's truth to that.
Not that you can find an answer, but you can learn nuances, e.g., here, here, here, here and here (source of the closing image & quote). Grove while heading Intel was the major success poster for the innovate or die outlook. Can you picture Intel, if a Big Three CEO were there? It would be like the guy from Pepsi almost killing off Apple, via Pepsi-think in a high tech arena.
Joseph Schumpeter, the eminent 20th-century economist who famously described entrepreneurship as a form of “creative destruction,” proffered a lesser-known, pithier epigram for 21st-century innovators. “Innovation,” he wrote, “is ultimately not an act of intellect but of will.”
If only it were that straightforward. Invariably, seemingly fundamental truths about innovation turn out not to be true; yet somehow even the most disruptive technological innovations end up reaffirming the hoariest innovation clichés. To CEO and entrepreneur alike, it’s painfully unclear whether intellect, will, or plain dumb luck will end up playing the starring or the supporting roles when enterprises innovate.
Schumpeter is respected, but Triumph of Will is old news.