Report: Honda likely will leave Formula One racing

TENERIFE, Canary Islands — Honda will pull out of Formula One unless a new buyer can be found within three months, sources said Thursday .

The Japanese car manufacturer has the operating budget to keep the team running into early 2009, but escalating operational costs amid the worldwide financial crisis have the Brackley-based outfit in danger of shutting down if a new sponsor is not found quickly.

Takeo Fukui, CEO of Honda Motors, was due to hold a news conference regarding the F1 team in Tokyo this afternoon. A person familiar with the decision said the team bosses, Ross Brawn and Nick Fry, informed the near 700-member team late Thursday.

"Their intention is to pull out entirely — as an engine supplier and sponsor," the Honda team member said on condition of anonymity. "It's a shock. I think this came as a total surprise to everyone. No one in the UK was aware of this decision before Thursday night."

Brawn and Fry had returned from a FOTA meeting in Geneva, Switzerland, where they informed the other F1 teams of the manufacturer's decision.

A pullout by one of the world's biggest car manufacturers will send shockwaves through F1, which could start the season with only 18 cars on the grid.

Earlier Thursday, Honda announced it was cutting jobs in Britain and Japan.

— AP