BMW pulling out of F1

Updated: July 29, 2009, 2:34 PM ET
ESPN.com news services

MUNICH -- BMW is pulling out of Formula One at the end of this season, the second carmaker to leave the series within a year.

The German company announced the decision at a news conference Wednesday, saying it wanted to use its significant F1 budget in other areas. It will remain involved in auto racing.

Since entering F1 as a team by taking over the Sauber team ahead of the 2006 season -- it had previously acted as an engine supplier -- BMW had posted just one race win, at last year's Canadian Grand Prix.

Touted as a championship contender for the 2009 season, BMW lagged well behind the pace of the leading teams.

"Of course, this was a difficult decision for us. But it's a resolute step in view of our company's strategic realignment," BMW chairman Norbert Reithofer said at the news conference.

He said the Munich-based carmaker would use the resources previously spent on the F1 team to advance "sustainability and environmental compatibility."

Klaus Draeger, the board member responsible for development, said the team was "unable to meet expectations in the current season."

BMW's withdrawal followed that of Japanese car maker Honda ahead of the 2009 season, illustrating the growing pressure upon car makers to cut costs amid a global economic downturn that had hit new car sales.

Their withdrawal also lent credence to efforts by the FIA to significantly reduce F1 costs in order to retain existing teams and attract new entrants.

FIA, motor racing's world governing body, said it hoped BMW was the last manufacturer to leave the series -- and used BMW's exit to restate its case for a budget cap despite it being dropped when the Formula One Teams Association, which includes BMW, threatened to form a rival series.

"Had these regulations [the budget cap] not been so strongly opposed by a number of team principals, the withdrawal of BMW and further such announcements in the future might have been avoided," the FIA said.

"It has been clear for some time that motor sport cannot ignore the world economic crisis," FIA said. "Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer. This is why the FIA prepared regulations to reduce costs drastically."

BMW's decision to end its involvement on Formula One only came Tuesday and the company was still considering what to do with the staff involved with the team, Draeger said.

"Of course ... would all have liked to continue this ambitious campaign and show that this season was just a hiccup following three successful years," BMW motorsport director Mario Theissen said.

"But I can understand why this decision was made from a corporate perspective. We will now focus sharply on the remaining races and demonstrate our fighting spirit and put in a good result as we bid farewell to Formula One racing."

Mercedes, the other major German car maker involved in Formula One, said it regretted BMW's pullout, "but it will have no influence on our F1 engagement."

The decision by BMW comes at a time when auto makers worldwide are reporting lower sales amid the global economic slowdown. Consumers are reluctant to open their wallets for big-ticket items and companies are trimming costs.

Georg Stuerzer, an automotive analyst with UniCredit in Munich who follows BMW, told AP that he estimated that the company was spending approximately $280 million a year on its Formula One involvement.

Draeger said it was not yet clear if the decision would result in job losses in Munich and Hinwil, Switzerland. The operation counts some 700 workers.

"Since we only made this decision yesterday, we cannot provide any more precise information," he said. "We will develop and assess various scenarios and do our best to find a solution for the employees in Hinwil and the staff members involved in the Formula One project in Munich."

The withdrawal will prompt speculation about the future of drivers Robert Kubica and Nick Heidfeld. Kubica will be in strong demand for next season and will likely remain involved in F1.

The future for Heidfeld is less certain, though his long stint in the sport could make him an attractive option for the new entrant teams next season, who will be looking for an experienced driver.

In its debut season in 2006, BMW Sauber wound up fifth in the constructors' championship. In 2007, the German-Swiss team came in second after McLaren-Mercedes' exclusion from the points standings.

In 2008, the team was in the hunt for the world championship until the end of the season, winding up third. Kubica had the only GP victory in Canada.

So far, the BMW Sauber F1 Team has taken one pole position (Kubica in Bahrain in 2008) and 16 podium finishes. It is eighth in the constructors' standings in the current season.

FIA presidential candidate Ari Vatanen said BMW's exit is an "alarm call" that should unite the teams and governing body to safeguard the sport's future.

"In Europe, if you speak to any of the big teams, the current sponsors or the potential sponsors, they are all hesitant because there is no stability, there is not enough visibility and not a good enough return on their investment," Vatanen told the AP in a telephone interview from Finland. "BMW leaving once again emphasizes the need to work together and not have artificial dividing lines in the family. It's an alarm call.

"We need to sit around the table and make sure that the manufactures, teams and sponsors can commit themselves. It's time to find a serious solution."

Vatanen wants to replace Max Mosley in October's election.

Information from The Associated Press was used in this report.