Saving private Honda

January 19, 2009

“I am a bit worried about Honda becoming a private team,” said The Mole. “The last thing they need right now is people inside the team going off and complaining to Members of Parliament and obscure government departments getting involved.”

“Oh,” said Penelope (Roedean). “Have they asked us to get involved?”

The Mole ignored her.

“The team needs to focus on finding the money to run this year – and building cars so that they can. If there are people on the inside playing politics it is really not very helpful. The team needs to be stable. It is not an easy time to find money.”

“That’s an understatement,” said Penelope (Roedean), with a flash of her wicked eyes. “Right,” she said “I’m off to The Morgue, where I shall have wild passionate sex with Schmutzli.”

“Very good,” said The Mole, not rising to the bait. “I am sure he will be very grateful.”

Penelope gave a little giggle and disappeared towards the lift.

For a few minutes The Mole perused the latest reports: Button to Toro Rosso. Alonso to Ferrari. All the usual dross.

Penelope (Benenden), The Mole’s chief researcher, strolled over. She looked rather bookish when she wore glasses, but she seemed to attract more suitors than all the other Penelopes put together.

“I ran some numbers,” she said, “I reckon that Honda is looking at a bill of at least $150m to shut down the team.”

The Mole raised an eyebrow.

“The money is not the problem,” she addded. “Don’t forget that even with all the economic disasters going on, Honda will still make a profit in this financial year in the region of $2bn. That’s down from the planned $5bn, but it is still a considerable amount of money.”

The Mole nodded, pausing for a moment to consider what he might do with $2bn in the bank.

“A decent sum,” he said.

“Anyway,” Penelope went on, “the most important things for the people at Honda Motor in Japan is to avoid losing face. Honda is a highly-respected company. It does not want to damage that reputation. The humiliation of closing down the F1 needs to be avoided. Saving face is crucial in Japan and they will do anything to avoid it. Leaving F1 is bad enough. When Takeo Fukui announced the news he apologised over and over to the staff, the drivers, the F1 world and even to the fans. The poor man nearly cried.”

The Mole nodded.

“Well,” Penelope went on. “That’s the whole point. They will do anything to avoid the added shame of putting 700 people out of work. And if they have to spend $150m to close down the team, they might as well spend the same amount to have it run by someone else. In other words, it makes sense for Honda to give the team away for a Pound and then pay Ross Brawn and Nick Fry to run it. Normally, a management buyout would be funded with loans or private equity deals, but there is not much of either about. The team can expect some money from the Formula One group so there is probably enough to get it running this year, particularly as the budgets will come down with the ban on testing. And there are more cuts coming in 2010, so Brawn and Fry need to worry more about the longer-term than about today.”

“I am sure that Mercedes-Benz will want a multi-year deal and financial guarantees before agreeing to an engine deal,” said The Mole. “However, Honda could ask for the money invested in Brawn and Fry to be paid back over time, and they could even have an option to buy the F1 team back in, say, five years. That would be sensible. The car markets of the world should improve eventually and then Honda might want to get back to F1 again.”

“So the main thing is to find investors for the end of 2009,” said Penelope.

“Or sponsors,” said The Mole. “The car is going to have a lot of available space on it and that can be sold off cheap to sponsors. Someone will pick it up if it is available. And it would be well under the market price. Really smart companies know that now is the best time to invest, if you can afford to.”

“Either that or we need an automotive superhero,” Penelope said, looking across the room to Miss Pringle-Featherby (of the Berkshire Pringle-Featherbys), who was reading Cosmopolitan with a rather disinterested air.

“Maybe The Stig can save the day,” she said, looking up and putting the magazine to one side.

The Mole and Penelope (Benenden) looked at Miss Pringle-Featherby very oddly.

“Well, The Stig is the big racing hero these days, isn’t he?” she said. “If there is a job to be done, they call in The Stig. It’s on that TV show, you know, Top Gear.”

“There is only one Stig as far as I am concerned,” said The Mole. “Stig Blomqvist. Fabulous rally driver. Won the World Championship in an Audi in 1984. He was quick in anything, even on the race track. I think he even won a touring car championship. Do you know he was born in the same town as Ronnie Peterson. What is the chance of a small town called Orebro, which is about the same size as Chesterfield, producing two of the world’s finest drivers? There is nothing of interest in the place apart from a water tower.”

“Must be something in the water tower,” said Penelope (Benenden) with rather more wit than normal.

“The Stig used to be Perry McCarthy,” she added. “He used to be dressed all in black.”

“It was ghastly,” said Miss Pringle-Featherby. “The poor man tried to match the acceleration of a jet plane and drove a Jaguar XJS off the flight deck of HMS Invincible.”

She looked rather sad. “All they ever found was a glove,” she added.

“I’m sure I have seen Perry McCarthy around somewhere,” said The Mole. “It is hard to miss him!”

“Anyway,” said Penelope (Benenden). “They got this new Stig, with white overall and a white helmet.”

At that moment Penelope (Roedean) walked in, carrying some files.

“That was quick,” said The Mole, with a smile.

“It happens to some men when I am around,” Penelope replied with a grin.

“Who’s The Stig?” said Penelope (Benenden), deciding to change the subject.

“Oh, that’s easy” said Penelope (Roedean). “There isn’t one.”

“Of course there’s one,” said Miss Pringle-Featherby. “He’s on the TV all the time.”

“No, there isn’t ONE,” said Penelope. “There are more than one. Some newspaper – maybe that one that broke the Max story – recently gave lots of details about Ben Collins, without actually naming him. I am sure that is true some of the time. But I reckon there are other Stigs as well. That way you can keep his identity a mystery. Everyone likes a bit of mystery, don’t they? Who would care about Jack the Ripper if we knew who he was? I heard it was Julian Bailey sometimes.”

“What Jack the Ripper?” said The Mole.

Everyone ignored him.

“I even heard that Damon Hill has been known to do it.”

“Is this important?” said The Mole. “All the best columns have more than one author.”

And he left the thought hanging in the air…