Lin Jarvis (Yamaha) - Q&A: Financial crises.

As part of Fiat Yamaha's virtual launch of its 2009 MotoGP campaign, an interview with Yamaha Motor Racing managing director Lin Jarvis was released.

The most significant pats of the interview, regarding the global economic crisis and a potential 17 rider MotoGP field following Kawasaki's withdraw, are shown below...

Q:
The global economic situation has affected all levels of motor sports, including F1, rally and now MotoGP, with the withdrawal of Kawasaki. What do you think about this and are you concerned about the shrinking number of riders on the MotoGP grid? What needs to change in order to attract more teams to MotoGP?

Lin Jarvis:
It's a big question. Of course if I look at the withdrawal, basically it started at the end of December when almost one after another, after another, firstly Honda stopped, then Suzuki and Subaru in rally, and then finally, unfortunately, Kawasaki. It's a sign of the times. These big factories are pulling out of the top sports disciplines.

Fortunately our position as Yamaha is a little different. We are facing the crisis as mush as anybody else, but our team project is very successful and that's why I think we can and will continue into the future, because it's a very important tool for Yamaha, for its marketing.

With regards to the number of bikes on the grid in the MotoGP, of course I'm concerned. I'd rather not see the global recession, I'd rather see the teams prospering, I'd rather see in excess of, 20, 22 or 24 bikes on the grid. We have to face the reality as it is and I sincerely hope that the Kawasaki bikes will stay. Ideally it would be at least 19 or 20 bikes on the grid.

We have to really seriously rethink for the future how we can further grow the health of the sport.

Q:
How do you think MotoGP can change to keep itself as the most important motorcycle championship in the current climate? What budget minimizing restrictions would you suggest?

Lin Jarvis:
I think when you have times of economic difficulty and recession, everybody has to rethink. That includes Dorna, that includes the FIM, it includes the manufacturers, the private teams, the riders. Everybody has to think about how we can, minimize the negative effects and look forward to the future growth.

I think the immediate cost cutting measures that are proposed by the MSMA are a good start. Already this year we reduced a lot the winter tests, we are going to reduce further the testing and the practice times throughout the season. There are proposals for 2010 to make important changes in the technical specifications, and I think all these things will be essential.

Cost-cutting however is only one story. I wouldn't say cost-cutting is easy, but it's an action in a negative sense, to try to reduce something. But we have to look for how we can grow the income, because the other way to balance costs is to make sure the sport becomes more commercially attractive and that the show becomes something that is more in demand, and the more revenue we have, we can see really long term growth.

I think we need sensible costcutting, serious cost-cutting, but also we need to look for revenue growth, to grow the sport.

Q:
Has Yamaha been forced to impose any budget restrictions on their MotoGP effort this year? Will the team be operating in the same way or will some things have to change?

Lin Jarvis:
Obviously Yamaha is affected like everybody else. Business is very difficult now, on a global basis. We are having difficulty particularly in the developed markets like North America, or Japan, or Europe. Business is tough, which means that our financial circumstances are under pressure and everybody is under pressure, whether be racing, or marketing, or product development, across the board there are difficulties to be overcome.

We have some pressure from the top management of Yamaha to reduce our budget and we will do that by very, very prudent activities to maintain the top performance, but we will trim off all the fat. We will be very focused on what we do next year, we will spend money on the things that are really essential, that will bring an additional result. In my opinion we can do that.

I think it's a year when we have to be more creative, but I'm confident that the budget restrictions we face will not affect the pure performance of our activities. That's our mission, so we have to achieve that.

Q:
Yamaha as a manufacturer was opposed to the single tyre rule. Has your opinion changed, given the financial crisis and the fact that the new tyre rule has reduced testing costs?

Lin Jarvis:
It's an interesting question. Indeed Yamaha as a manufacturer was against the single tyre rule, but that was primarily because our philosophy as a corporation is free competition, free challenge, free spirit.

However, although Yamaha was officially against the mono tyre rule, the team was not. The team was pro the mono tyre rule, because of course there are different issues at stake.

Frankly, I have personally always supported the mono tyre rule and I think now we are starting to see some of the benefits already. As you said there will be some reductions in the testing time. I think there will be a more fair competition amongst all of the riders having equal opportunity, at least on tyres, I think some of the satellite teams will benefit by that as well. In my opinion it will be seen finally as a good decision for the sport.

Q:
Does MotoGP remain an important marketing tool for Yamaha Motor Co. in the current economic climate? How can Yamaha justify its MotoGP spent when budgets are being slashed and jobs are being lost?

Lin Jarvis:
Yes, that's one of the big questions, of course, at the moment, as we've seen the withdrawals we talked about earlier from some of the other manufacturers in different sports. And as we've also discussed, there is a lot of pressure on costs on all of our business. We are very fortunate, I would say that firstly we were fortunate to be successful for the brand last year, but also several times in recent years.

Yamaha is very much a marketing oriented company and we've really seen the benefit, especially in the last 5 or 6 years, we've seen the integration of MotoGP into a lot of our promotions worldwide, so there is a real support, even under pressure, from the Yamaha network, there's a real support to continue MotoGP.

Only last week our President, Mr Kajikawa, made a statement, in Japan, to the media, where he said that we will continue in racing and especially in MotoGP, because the activities we do in the MotoGP, he said it's like the beat of a war drum for the company. I think that if you've got a President giving you that much support, then it's fantastic and it's up to us to deliver the promise, but I'm quite confident that Yamaha will stay in MotoGP.