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BMW Group Withdraws from Formula One Racing

Latest cost-cutting move is only part of an ongoing reorganization dubbed Strategy Number One.

by on Jul.29, 2009

The word from Munich

The word from Munich is F1 isn't sustainable.

BMW announced yesterday that it is abandoning its costly Formula One racing effort at the end of this season. The move follows Honda’s withdrawal from the ultra-expensive and controversial sport last year, which is increasingly being criticized for its lack of social consciousness as the Great Recession drags on, and environmental issues pervade the industry. 

“Of course, this was a difficult decision for us. But it’s a resolute step in view of our company’s strategic realignment,” said Dr. Norbert Reithofer, Chairman of the Board of Management of BMW AG. “Premium will increasingly be defined in terms of sustainability and environmental compatibility,” he said.

BMW is the largest luxury car maker in terms of sales in the world, and it has been hard hit by the global slump and demands from regulators that it clean up its gas guzzling vehicles. It is currently trying to cut costs by €6 billion, to stop an ocean of red ink. Its latest V-12 7-series emits more than twice the CO2 required under new European emissions rules. The company promises that a new CO2 Concept car will debut this fall at the Frankfurt Motor Show.

The money saved by cutting an F1 program, which can easily cost hundreds upon hundreds of millions of dollars will be invested in environmental technologies.  

“As our company places stronger focus on sustainability initiatives, our participation in Formula One becomes less a key promoter of this engagement,” said Reithofer.

Reithofer said BMW will continue in other motorsports series that will enable BMW to transfer technology more directly and to realize additional synergies. “This is in our customers’ best interest,” he said.

BMW has had an extremely disappointing 2009 season, with a car that is not competitive. It is currently running eighth in the maker’s championship.

“It only took us three years to establish ourselves as a top team with the BMW Sauber F1 Team. Unfortunately, we were unable to meet expectations in the current season. Nevertheless, our ten years of Formula One experience have had a major impact on our development engineers,” said

Dr. Klaus Draeger, the member of the Board of Management responsible for development.

BMW won eight Formula One victories from 1982 to 1985 with Brabham. In 1983, BMW won the driver’s championship with Nelson Piquet (Brabham BMW). The last win with a turbocharged engine followed with Benetton in 1986. Ten victories occurred during the partnership with Williams (2000-2005).

BMW had a total of 19 grand prix wins and 33 pole positions before the BMW Sauber F1 Team era. In its debut season in 2006, the newly established BMW Sauber F1 Team wound up fifth in the constructor’s championship. In 2007, the German-Swiss team came in second after McLaren-Mercedes’ exclusion from the points standings. The 2008 season saw the team in the hunt for the world championship until the end of the season, winding up third. Polish-born Robert Kubica achieved the first and hitherto only GP victory in Canada on June 8, 2008. So far, the BMW Sauber F1 Team has taken one pole position (Kubica in Bahrain in 2008) and 16 podium finishes.

When BMW took over the Sauber team in 2006, racing activities were divided between a fabrication shop in Switzerland at Hinwil and BMW’s headquarters in Munich. More than 650 people work on Formula One, and layoffs, as yet unspecified are all but certain.

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