Financial Crisis Hits Formula 1

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Financial Crisis Hits Formula 1
Financial Crisis Hits Formula 1

The ailing carmaker Chrysler and General Motors want to tackle their survival together. Meanwhile, Honda and Audi announced a farewell.

The struggling for survival US auto companies General Motors (GM), Chrysler and Ford are ready to merge for billions in government aid. Nevertheless, the bosses of the three corporations met with some rejection at a hearing before the members of the Senate on Thursday. It is urgently about 34 billion US dollars (26.78 billion euros) to avert impending bankruptcies. So far there has been talk of $ 25 billion. The economic crisis and the lull in the car market also hit Formula 1. The Japanese car company Honda announced on Friday that it would be leaving the premier class of racing.

Help before Christmas

US automakers need some of the billions before Christmas to save hundreds of thousands of jobs in this key industry for the time being. Chrysler CEO Robert Nardelli said in Congress that he would accept a merger with rival GM if his 80-year-old company could be saved. GM CEO Rick Wagoner said he would “consider such a step very seriously”. The third in the league was Ford's chief executive Alan Mulally.

The largest US automaker GM is asking the US Congress for new loans totaling up to 18 billion dollars by the end of 2009, of which the Opel parent wants to have four billion in December. Ford needs up to nine billion, but hopes not necessarily to have to access the money. Chrysler wants the requested seven billion dollars by the end of the year.

Reluctant reactions

The managers hoped to convince the Senate's banking committee with drastic restructuring plans. They promised cost savings and increased development of smaller, greener cars should they get the loan. The hearing lasted almost six hours.

The committee members reacted cautiously: "I am against buying the three big automakers," said the leading Republican in the body, Richard Shelby. "The car companies have to demonstrate that they are determined to reform," said Democratic Committee Chairman Chris Dodd. "Good money must not be thrown after bad." Dodd affirmed, however, that doing nothing does not help either. "We have to work (for a solution)," he said. The company bosses wanted to explain their position on Friday.

Political disputes over financing have so far prevented a solution: The Democrats want to tap into the 700 billion dollars earmarked for stabilizing the financial sector. The Republicans, on the other hand, want to fall back on an already approved loan package of 25 billion dollars, which is actually intended for the development of more fuel-efficient cars.

Honda gets out of Formula 1

While the "big three" of the USA are fighting for their survival, the Japanese car manufacturer Honda has to take increasingly drastic measures. Honda Motor leaves Formula 1 at the end of the year. Honda President Takeo Fukui said in Tokyo on Friday that his company will withdraw from expensive racing in view of the difficult global economic situation. "It was a very difficult decision," said the Honda boss.

And Audi, too, limits itself to motorsport. The Ingolstadt-based company is not continuing its involvement in the American Le Mans Series (ALMS), which is considered the best sports car championship in the world. Audi entered the series in 2000 and has won the LMP 1 title nine times in a row. ?? In the past season, our brand dominated the action with seven wins in eleven races. TDI technology in racing perfectly supported the market launch of Audi TDI technology in the USA,”says Motorsport Director Dr. Wolfgang Ullrich gave a positive balance from AUDI AG's ALMS commitment. But the economically difficult times want to concentrate on the scenes in Europe. (AG / dpa)