CHAPTER ONE
BOMBSHELL FROM HONDA
It was a cold and grey November morning, almost exactly four months before the Australian Grand Prix that would open the 2009 season so spectacularly for us. Mr Hiroshi Oshima, the Honda Motor Company’s bespectacled chief operating officer, with his trademark shock of greying hair, looked nervy as we greeted him in the black and grey marble reception of Heathrow’s Renaissance Hotel.
‘Good morning,’ I said, shaking his hand and then standing to one side to make way for our team principal, Ross Brawn, to follow suit. Greetings were always formal with our Japanese counterparts. Without further delay Oshima-san, as we generally referred to him, ushered us into a tiny conference room where the three of us sat huddled around a small table, uncomfortably close.
It was immediately clear that this was going to be no ordinary meeting. Mr Oshima was extremely tense and finding it difficult to compose himself. Eventually he took his glasses off and began speaking very quietly. The top man at Honda was close to tears. The news he said was ‘not good, not good at all’.
Motorsport is at the core of Honda’s DNA. One of Japan’s greatest post-war companies, founded in 1946 by the legendary engineer Soichiro Honda, it enjoyed a proud history in both motorbike and car racing. After working with the company in Formula One for seven years – four when it was the engine supplier and three more when it owned the team – I knew just how passionate Honda’s people were about racing. They loved it, they viewed it as a display cabinet for the excellence of their engineering and regarded the racetracks of the world as battlegrounds where they would take on their road-car rivals – especially Toyota.
This came home to me most vividly on one of my first visits to Honda’s HQ in Tokyo not long after I took over as managing director of the BAR Honda Formula One Team in 2002. We were taken to a nondescript warehouse not far from the great Formula One racing track at Suzuka. From the outside it looked run-down and altogether unremarkable and when we got inside it was dark. It felt like the set of Bond movie. Then someone flicked a switch and panels of dusty fluorescent lights burst into life – and there, stretching into the distance before us, were the serried ranks of Honda’s motor racing thoroughbreds and all their road cars too.
There was one example of every model. In the racing section there were scores of Formula One cars going back to the mid-1960s, including the unrepaired wrecks of cars that had been written off in big crashes. There were motorbikes too and there was not just one copy of each model but three or four, including those driven by legends like Freddie Spencer and Mick Doohan. In the Formula One collection the stars were the immaculately preserved examples of the iconic red and white McLaren Hondas driven by the great Ayrton Senna to world championship glory in 1988, 1990 and 1991.
So for Mr Oshima on that day at Heathrow in the autumn of 2008, ten weeks after the collapse of Lehman Brothers investment bank in New York, to have to be the person to deliver the news that Honda was pulling out of Formula One was an especially onerous – not to say humiliating – undertaking. I felt for him as he sat before us; he was a good man, a serious man and he was speaking to us from the heart.
Ross and I had known something was up. In the weeks before the meeting, with increasing concern we had watched the dramatic onset of what would turn out to be the worst global recession since the Great Depression. Big multinationals were being hit all around the world, people were losing their jobs and order books were dwindling.
Nigel Kerr, our financial director at Brackley, had been picking up signals that Honda was not going to be able to escape this without serious retrenchment and we had noticed a few straws in the wind, like the sudden repatriation of key Japanese members of staff back to Tokyo. But we assumed – as a worst-case scenario – that we were looking at a hefty funding cut.
In the days leading up to the meeting, we had been working on an emergency plan to cut 30 per cent from our £200 million annual budget, but we had been careful to try to protect the promising work we had been doing on RA109. This was our new car for the 2009 season and the first car that Ross had overseen since his much-heralded arrival at the team a year earlier. It incorporated what we believed was a highly competitive chassis with innovative aerodynamic solutions, including a design for the whole rear end of the car that would eventually become highly controversial. Our goal for that machine was to try and break into Formula One’s top three for the first time in Honda’s history as a team owner, and we were quietly confident we might be able to make a big step up in performance as the 2009 season drew ever closer. We had no idea that Honda was about to stun the motor racing world by announcing that it was abruptly ending its involvement in Formula One, a move that would eventually be followed by Toyota and then BMW.
Our recent results were not in our favour. Nor, indeed, was our long history of under-achievement stretching back to 2000 when Honda had first re-entered Formula One as an engine supplier after an eight-year absence. Although we finished second in 2004 in both the constructors’ and drivers’ championships, we never properly understood why our car was so fast that year and thus we were not able to build on that success in 2005. In short we had never managed to escape the also-ran category and our recent results in 2008 had been woeful. At the final race that year at Interlagos in Brazil, Jenson managed thirteenth place while Rubens could only finish fifteenth at his home Grand Prix. That season Honda finished ninth out of eleven in the constructors’ championship, with Rubens fourteenth and Jenson eighteenth in the drivers’ standings.
Even so we were not quite ready for what Mr Oshima had come to tell us. He was brief and to the point.
‘The financial crisis has had immediate and severe consequences for Honda Motor Company, which is anticipating “red ink” for 2009, with losses of the order of three thousand million dollars,’ he said. ‘US dealers are refusing to take more new cars into stock because they don’t see how they are going to sell them. Our sales in America have fallen by 32 per cent already and it is likely that our plant at Swindon is going to have to shut down for a few weeks to try to weather the storm. In the light of all this,’ he told us, ‘Honda Motor Company must cut its spending and protect its core business. Our shareholders simply would not understand it if we continued to pursue something as expensive and esoteric as Formula One, especially given our long run of poor results.’
And that was it. In less than ten minutes our world had caved in. Mr Oshima was clear that it was over. There was no debate. The decision had been taken by the top management tier in Tokyo a week earlier. Honda was departing Formula One, lock, stock and barrel. There was going to be no process or a gradual wind-down; it was going to stop with immediate effect.
Mr Oshima stood and we took our cue. There were other people, he said, in the conference room next door who we would now have to see.
We had turned up for an execution. Our own.
I had sat, winded for a second or two, listening to this genial man telling us politely that our business life had collapsed. But even before we had got up from the table we were thinking about how we were going to save this situation. We knew we were sitting on what our early assessments suggested was a pretty decent car for 2009 and I also knew that we could not let down the more than 700 people who worked with us at Brackley. There were designers, engineers, aerodynamicists, electricians, race teams – even drivers – secretaries and catering staff who all had livelihoods and families and we had to fight to protect them.
The phrase that was pinging around my mind as I listened to Mr Oshima was: ‘You can’t do that!’ I didn’t mean Honda had no right to close its Formula One business. Of course it could do what it wanted with its team. But they couldn’t just shut down the company as if it had never existed – something I suspect would have been politically impossible had we been talking about a company solely based in Japan.
As we were ushered into the much bigger conference room where twenty Honda executives were sitting around a large glass table, some from Tokyo, others from Honda UK, I was ready to mount a rearguard action. We needed time – as much of it as possible – to find an alternative to simply going back to Brackley and closing the door and turning the lights off.
Ross looked stunned. I guessed his initial thought was: ‘What on earth have I got myself into here?’ Having only joined us a year earlier and reportedly turned down lucrative offers to work either for Toyota or McLaren, or perhaps to rekindle his glory days at Ferrari, he must have been thinking he had made a dreadful mistake. But who could have guessed that Honda would have reached the point where it wanted out without any warning whatsoever?
The discussion with the lawyers and accountants began and I started to push back.
‘Look, you cannot simply sack 700 people and sell the plant,’ I told them. ‘There are procedures to go through; government has to be informed – this is a significant business within the UK – the sport’s governing body has to be notified and we have obligations not only to our staff but to our suppliers. We have to have time to work this through and find a solution and you have to give us that time.’
I could see from the puzzled looks on some of the Japanese faces staring at me from across the table that this was not what they had come to hear. The contingent from Tokyo had come to London to oversee an immediate shutdown and sell-off.
After an hour or two of discussion, Mr Oshima suggested we bring other senior managers from the team to assist us. I called Caroline McGrory our company lawyer, John Marsden our head of HR, and Nigel Kerr. They all jumped in their cars and headed to Heathrow to help us deal with the massed ranks of Honda’s finest. In Caroline’s case this was a heroic undertaking as she was heavily pregnant with her third child.
Eventually we managed to get agreement to one month’s grace. We would be given thirty days – until Christmas – to pull this thing from the fire, even if we had no idea how we were going to do it. There had been no time for detail. There was talk of limited funding to tide us over for thirty days, but the Tokyo contingent was adamant that there would be no more engines for the car, for example. And there was nothing on how we were going to continue to pay Jenson’s considerable salary.
I pressed them on the decision – was it final? Was there any leeway at all? The shaking heads opposite couldn’t have been clearer.
Racing ahead, in a room where you could have heard a pin drop, I asked about a disposal: ‘Would Honda Motor Company be prepared to sell the team? I recognize that even that would be a tough goal in the current climate,’ I added, filling a rather awkward silence.
Mr Omura, a Honda F1 board member, said the company had not had time to consider selling the team but that there would be a further full board meeting the following week to discuss the decision. It felt like the first glimmer of light on a bleak day for us.
Ross, meanwhile, was also thinking ahead and told the visiting executives that he would go back to Brackley and start discussions with senior technical staff on drawing up plans for the team to compete in the 2009 Formula One world championship as an independent entity. It seemed both of us were looking for the opportunity in this crisis.
On the way home that evening my head was spinning. Who could we get to buy the team and who might the buyers be? How would we find them? What would be the price and the process? What would we tell the staff and when would we tell them? What about Jenson and Rubens? And what about Fernando Alonso, the former world champion who was back with Renault after his unhappy spell at McLaren, whom Ross and I had been wooing for months to join us for 2009? I knew immediately that that project was doomed. We were going to be firefighting all the way to the first race of the season – if we even managed to get that far – and changing our drivers was a luxury we could no longer afford.
During a break in the meeting I had popped out to make a quick call to Kate back home in Oxford.
‘They are out,’ I told her breathlessly. ‘You can’t tell anyone. I’ll speak to you later.’
An American from Detroit with a typically enthusiastic – even gung-ho – approach to life, Kate was stunned and cried when I rang off. In the days leading up to the meeting she had listened to me speculating about what might happen but she hadn’t been expecting this. When I got home though, she was already on the front foot as I stood in the kitchen, glass of wine in hand, running through some of my more outlandish schemes to save the company.
‘You can fix this,’ she said and she meant it. Over the coming months she and Ross’s wife, Jean, would form a vital part of our team, encouraging us and convincing us that we would succeed when the doubts threatened to overwhelm us, as we did our best to fight back from the brink.
On the following Monday morning – 1 December 2008 – Ross and I informed the team’s directors of Honda’s decision at our weekly strategy meeting. Caroline, Nigel and John were there alongside Ron Meadows, sporting director, Joerg Xander, head of chassis engineering, and Graham Miller who was operations manager for the plant. Of course they were stunned and surprised but Ross and I did our best to convince them that we were going to find a way out of this and that the team was going to survive. At that stage the grim news was to remain under wraps.
A few days after that there was a pre-planned meeting of the Formula One team principals group – the so-called Formula One Teams Association (FOTA), a sort of trade body of F1 team owners and bosses. The meeting took place at Brown’s Hotel on Albemarle Street in London’s Mayfair, a favourite haunt of the then-chairman of FOTA, Luca di Montezemolo, the charming and statesmanlike chairman of Ferrari.
Ross knew Luca extremely well from his Ferrari days at Maranello. As technical director there, Ross had played a key role in helping the team win five drivers’ titles with Michael Schumacher. When we arrived, we asked Luca if we could brief him first, before we spoke to the full group. He was just as shocked as we had been when we told him what Honda was doing and that we no longer had an engine for our 2009 car, if it ever made it onto the track. We had no expectation that Luca might offer to assist us in any material way but, as we sat with him in Suite 201, he stunned us by making a generous offer that (even if ultimately we would not take it up) was hugely encouraging.
‘Ross, I know you very well,’ Luca said in his heavily accented English, ‘and Nick, I don’t know you so well, but you seem a good guy, so this is what I will do. We want Honda on the grid – we cannot afford to lose you. If you go, who will be next?’
He paused for a second.
‘You can have our engines for 2009,’ he continued. ‘I will organize that for you if you wish.’ Then with a smile, he muttered: ‘But don’t beat us with them.’ We all laughed heartily at the impertinence of such a suggestion.
It was...