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Article: How chasing the dream almost bankrupt Honda

How chasing the dream almost bankrupt Honda

One of the main reasons Gerald Davison joined Honda from a highly promising job at American company Chrysler in 1968 was its glorious racing heritage.

He was seduced by the engineering budgets responsible for the cutting-edge multi-cylinder bikes which were to become a legacy for the rest of the racing industry, on both two and four wheels.

But his hopes of becoming part of that pioneering culture were dashed as soon as he arrived when he found that the journey to the top of world championship racing had pushed Honda to the brink of bankruptcy.

“In the 60s, it was a financial consideration because it was crippling the company… it was a massive effort.

“The problem was it was so hectic; they were designing gearboxes between races, particularly for things like the 50cc machines.

“In those early years, it was beginning to cripple the company’s operation because so much energy had to go into making parts, making engines, getting them out to the races.

“So, I joined the company in ’68, which was just about the time they stopped all racing, including Formula 1. But by the early 70s, when I was beginning to manage more parts of Honda’s UK operation, I was starting to realize the ground we were losing by not having any racing involvement at all.

“And you couldn’t talk racing; it was like Honda had just shut the book… that’s it. We made our name, it’s given us international success… don’t talk about it again.

“So, right up until about ’74 or ’75, I felt this was a bit of a losing battle, but I just kept on.”

The irony was that Honda’s success was umbilically linked to racing, and founder Soichiro Honda and partner Takeo Fujisawa, equally talented in sales and marketing, committed to investing 4% of turnover to research and development.

Hanging onto this philosophy, Davison got his wish in 1979 when the company returned to grand prix racing. But initially, it wasn’t a continuation of their glorious past!

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