BROOKLYN, NY, DEC. 16: American Honda’s decision to pull out of road racing was done strictly for economic reasons and not, as some have speculated, because of their aversion to the American Superbike rules, according to a senior Honda official.
“The whole question I think with this is why did we do this? We did this for economic reasons,” American Honda vice president Ray Blank said in a phone call. “If others do the same thing, they may do it for the same or different reasons. But we did it for economic reasons. There’s no mystery, there’s nothing else behind it. Others can say what they want to. It’s just not on the cards right now.”
American Honda dropped the bombshell on Friday evening, just after Blank had returned from his second trip to Japan in two weeks. It was on the second trip that Honda Motor Company announced their withdrawal from Formula One. Once that decision was made, Blank knew it would be difficult to continue with the road race program.
“When I was there last week there were discussions about what kind of plugs were going to be pulled and that’s where it was obvious that I wasn’t going to be able to put it together for next year,” he said “And that’s how quickly the decision came down. I would say within a 48 hour period we had to make that decision. And it was post-tire test. So there was no reason to go to the tire test if we weren’t going racing next year. So that’s how late this decision has come. And I think the real nail in the racing issue for this year at least was when that very difficult decision to pull out of F1 came. The rest of us running racing operations within our own marketing areas had to look back and say, what’s the likelihood of being able to get through budget process to be able to maintain this when something as profound as that had happened?”
Blank has been on the record as saying that, though he didn’t agree with the rules package announced on Nov. 20 by AMA Pro Racing, he’d gotten about 90% of what he wanted. That hasn’t stopped the whispers that American Honda pulled out because they didn’t want to play by the AMA’s rules.
“Did we get what we wanted out of the rules? No. But were they abhorrent? We could have lived with it,” he said. “It elementally changed the landscape of Superbike racing. But frankly, DMG made a lot of concessions as time went on. And in the discussion I had with Roger (Edmondson) on Friday night, actually before the release went out just to give him a heads-up and let him know where we were at, he said that there’s been quite an evolution in this thing since March of last year and that he had learned a lot, from not only the specifics in details of what it was and why we were taking the course we were, but in how important it was have a lot more people, at least, heard. You always make your own decisions at the end, but you at least have to hear them.
“It wasn’t that. It is an economic situation that we were dealing with right now which there’s not much we can do about.”
In the motorcycle world, the first sign of lessening sales came in August, following by another drop in September. Then the economy began to go into a free fall, followed by the freezing of the credit markets, which made it difficult for potential buyers to get financing. Next came word of distress in the automotive industry which was so severe that it threatened the existence of GM and Chrysler and hit Honda hard. American Honda Motor Co. posted a decline of 31.6 percent in November sales, compared to record November 2007, according to a Honda press release.
The early year rise in gas prices was an impetus for strong street sales, but as gas started to drop Honda started to feel the impact. “And we started to get less and less sure about what we were going to be able to do in following year in terms of any of those kinds of marketing issues like racing,” Blank said.
Blank was at the Intermot show in Cologne, Germany in early October when a rules proposal was struck that was delivered to the Daytona Motorsports Group and, Blank says, “there was a pretty high belief in the acceptance, I thought ‘this makes sense and it’s a compromise and we’ll probably be able to do that.’ Based on that, I think we could have moved full speed ahead with making all the arrangement. But not more than a week later things started to soften. You know how fast these baseballs are coming with this economy. This is happening, that’s happening.”
Blank was in Japan when the road race technical rules were released on Nov. 20 and “in looking at them in Japan this is not exactly what we wanted because it was falling towards the Superstock side. Making it very simple, without going into a lot of laborious detail with this, the rules fall more towards the Superstock side and less towards the build Superbike side. That’s pretty much how the rules came out. We have a pretty wide margin with CBR1000, I believe. I looked at them and I say, “is it exactly what we at Honda asked for? No it’s, not. When I saw we it’s always Honda. First of all, request number one was ‘Would you try to make a World Superbike thing so that we can get global, Because we need global audiences, this and that? We didn’t get anywhere with it.”
Given that the negotiations between the factories and the DMG dragged on well into the fall, Blank was asked if Honda would have raced had their been a stable rules package in the middle of the summer?
“That’s a really hard question,” he said. “We started to make a kind of combination of judgments in terms of preparation for 2009 that were more economic-based than they were rules-based.”
The Red Bull Honda Supercross and motocross teams will continue in 2009 because contracts were already in place and the season begins in January. In addition, the team has Red Bull as a sponsor, “and that helps out enormously. We make contracts and we have obligations that go beyond what we have with road racing. We had contracts with road racing, but not all of them. We didn’t have everything in place. And we have a sponsor. And we have obligations to that sponsor, and Honda’s never let a sponsor down yet.”
The decision on when Honda returns isn’t that far off. Honda is preparing their 2010 budgets for an executive review board for the 2010 fiscal year. The 2010 fiscal year for Honda begins April 1.
“We will continue to evaluate the situation and look for the opportunity,” Blank said. “We’re out as Team Honda. We’re not out of racing, though, because we’re continuing to support those two entities,” Erion Honda and Corona Honda, “and we’re going to put all the contractual obligations that we have into those two entities or here at Honda working behind the scenes on it. We’re not letting anybody go, we’re not breaking any contracts. We’re not saying to anyone, go ahead, sue me, or anything like that. We will then evaluate. When? You evaluate the situation constantly. It’s real time evaluation.
“If there is that June 2009 market break where things start looking like they’re really picking up and where the business starts getting better and the General Motors, Ford, the bailout situation is settled and the yen starts improving and this and that and the other things. It’s a multiplicity of elements that all lead to profitability of the company. As soon as its available it comes back on.
Blank said racing “leaves in priority fashion, it returns in priority fashion. The position and the importance of racing to Honda are a high priority. They can come back just as easily as they leave and as soon as possible we’ll do that.”