2010 regulation row on £40m budget cap

[Giblet]

I don't think the independents have the intention of leaving, but they end up folding due to various financial and management problems. The manufacturers compete with the knowledge in the back of their mind that they can and likely will pull out one day, based on history of factory teams reasons for leaving.

It's not that factory are more likely to stay then independents, it's more a case of reason for leaving. Corporate teams usually choose to leave, for reasons outside of racing. Indies are there to race and win. If the winning doesn't come they have to quit.

The financial crisis and it's impending rule changes have flipped the norm on its head though.

Also about Honda, I was talking about the 60's on.

[gcdugas]

My point wasn't based on "FIA lies", nor was it based on F1 (as F1 has only recently become a manufacturer dominated series) ...

I was looking at history based on WRC, ITCC & BTCC (where manufacturers have left en-masse) ...

Sure, independent teams may leave F1 when it is no longer viable for their business to continue, but there has always been a steady stream of replacements for as long as it has been commercially viable). Conversely, there are only so many auto-manufacturers in the world & the teams they create are based solely on their marketing requirements of the time, relying upon a budget allocated by management who do not necessarily care about the requirements of FOM or the millions of fans tuning in to see the competition.

Relying solely upon a group of companies who can (like Honda) fold cards and leave the table, knowing fully well that it won't damage their core business interests, IS BAD BUSINESS SENSE!!!

Who would you rely upon in a time of crisis? The people who rely upon you for their livelihood, or the people who rely upon you to make you look good?

Yeah, I didn't think so either ...

Well I would rely upon those who have a more solid record over the past 25 years and that is.... drum roll please... the manufacturers. This IS GOOD BUSINESS SENSE. Relying upon those who have a greater history of coming and going or folding up completely IS BAD BUSINESS SENSE.

These marketing strategies are long term and must be. The psychology of "branding" takes years to develop. As recently as 1995ish Merc Benz was percieved as largely a luxury land-yacht brand (think S-class) that sold to retirees in golf country clubs and corporate/diplomatic fleets. The 190e of the 80's was their first embryonic effort to change this image but it has been a long haul. BMW had been beating them handily in the 80's in all the younger demographics with their "boy racer" 3-series image that gave them "edge". MB had to address this and it has been a long haul for them. Their AMG models could not stand alone without some genuine racing heritage behind them. Certainly there is the saloon car racing series like DTM etc. but F1, and a hi-tech F1 at that, is integral in their PR "image" branding efforts.

You make it seem as if there isn't any inertia to their investment decisions or their marketing strategies. However the historical record shows this perception to be unfounded. I will gladly stick with the "historical record" over all your "hypotheticals" as my measuring stick in determining the future for F1.

Low-tech F1 serves no one.... not BMW, not MB, not Toyota, not Renault and certainly not Ferrari. That is what is at stake here. Yes budgets must be cut but the manufacturers are big boys able to see to that on their own. They are more sensitive to real world financial pressures than they are to Max's whims. They have worked out among themselves budget saving proposals that are palatable and grounded in economic reality. And they certainly DO NOT need the FIA to be auditing each team's books in some intrusive N@z1 way. That much should be very obvious. They need a solution that is self policing like their testing limitations etc.

Simply put a 40M euro series holds no cache for the teams. If Max wants that, then the manufacturers will go elsewhere to meet their "hi-tech image" marketing needs, most likely to LMP. And F1 would be reduced to s kit car spec series like it was in the Cosworth era. At that time LeMans had way more cache and big names than F1. Even now LeMans is on the upswing in its public perception as a hi-tech proving ground and birth place of new technology with the diesels etc. F1 needs to open up their regs and allow more innovation. Spec engines, spec aero "boxes" for wing placements, spec alloys, spec tires and aspect ratios, are antithetical to the true spirit of F1 which gave us the turbos, v12s v10s and v8s all racing simultaneously against each other, six wheeled cars, twin chassis cars, fan cars, skirt cars, rear engined cars monocoque chassis cars, carbon fiber components etc. The last real innovation I can think of was the hydraulic semi-auto gearbox that Ferrari introduced in 1990. Of what real technical consequence is a twin keel chassis or a high nose/low wing when measured in it real world applicability to road cars?

[u401768]

I 100% agree with this - we Don’t need the FIA to stick its nose in etc - also the regs need to be free, and to let TDI's, wankel, front engine, etc..

Also dose F1 need Ferrari? - Brawn were going to announce there title sponsor - and now there looks to be, what you can only describe as, alto of talking up.....

:- http://www.itv-f1.com/News_Article.aspx?id=45980

This sort of thing historically has always been trying to hide bad news/problems. Is this a case of there title sponsor is waiting to see what happens, and they don’t want to commit to 3 years in a dead/dying series? And how many other teams are in this situation?

Also going back to manufaturor teams/indipendents – Lola were in F1 not that long ago for 2 races before they pulled the plug, after lots of talk about winning every series they had entered. Also didn’t it leave them in a right state afterwards?

The MasterCard Works Programme
Main article: MasterCard Lola
Lola had originally intended to enter Formula One in their own right in 1998, but pressure from main sponsor MasterCard caused Lola to debut its new car one year early, in 1997. The sponsorship model was curious, linked both to MasterCard membership of a 'club', and to results - something a first-year F1 team often finds hard to achieve. A custom-built V10 engine from Al Melling was going to be fitted to the cars, which initially started racing fitted with underpowered Ford Cosworth ED V8s.
The cars had a lot of problems, the worst being aerodynamics - they had never even been wind-tunnel tested when they arrived in Australia, which by that point in time was unthinkable. The car was fundamentally flawed, and the lack of wind-tunnel time had made it even more of a joke. Despite the fact of the car's problems, the team was confident that it could finish ahead of some of the other teams. The results were disastrous, the cars were well off the pace and were no faster than Lola's Formula 3000 cars. After only one race the sponsors pulled out; the team turned up for the second race in Brazil but the cars did not turn a wheel and that was the end of the MasterCard-Lola story. Shortly afterwards, the entire Lola Car Company went into receivership. The company was saved by Martin Birrane who then started to build it up again. There were rumours that one Zoran Stefanovic wanted to purchase the chassis and use them as the basis of a 1998 privateer effort, but nothing came of this.

http://en.wikipedia.org/wiki/Lola_Cars#Formula_One

Lola was acquired by Martin Birrane in 1998 after the unsuccessful Lola MasterCard attempt at Formula One.

Lola Cars is a member of the Lola Group, which combines former rowing boat manufacturer Lola Aylings and Lola Composites, who specialize in carbon fibre production.

[WhiteBlue]

Simply put a 40M euro series holds no cache for the teams. If Max wants that, then the manufacturers will go elsewhere to meet their "hi-tech image" marketing needs, most likely to LMP.

A nicely thought out theory but unfortunately not consistent with the real world. The budget cap proposal was 45M € and with marketing, drivers, hospitality and other expenses we are talking close to 100M €.

At least the German manufacturers were not against such a budget cap if it was reached on a suitable glide path. The opposition came from Toyota (richest manufacturer in the world) and Ferrari (richest F1 team). Both teams can afford to spend way more than any other team. Toyota due to their huge cash mountain and Ferrari due extra money from FOM, tobacco advertising and merchandizing.

So it comes down to the protection of special interests against the common goal of making F1 affordable to enough teams to have a full grid.

In the mean time news broke that Williams have been kicked out of FOTA temporarily. Clever move to close the barn door after the horses bolted.

[mcdenife]

WB wrote

So it comes down to the protection of special interests against the common goal of making F1 affordable to enough teams to have a full grid.

His theory is much much closer to reality than your summation. Its seems you cant get past "BUDGET CAP". After everything gcdugas has written on the subject, you can pick up on nothing but the budget cap. Yet you cannot explain or argue (other than wildly speculate) on why or what special interest Ferrari or Toyota would have against an affordable F1 for all teams. What about Red Bull, Renault and BMW, what are their "special interests"? You mention "glide path", something which only came of the last round of meeting, and implied this was (and always had been) acceptable to the "german car makers". How convenient. Surely any fool can see a healthy and full grid is in everyones interest. And Toyota are living proof that in F1, money doesnt buy you success. Surely, therefore it is in their interest to want to see a reduction in costs because otherwise it wont be long before they pull the plug on their racing team. Regardles of your so called mountain of cash, Toyota cannot continue to spend the way they have without anything to show for it and there is no sign this is about to change anytime soon at least not if Mclaren, Ferrari or Renault have anything say about it because as sure as there is nose on your face, they wont be standing still. You need to come up with something better than to speculate on things like Monte wanting to run F1 etc.

[WhiteBlue]

The arguments in this debate have been exchanged long before the last weekend. Coming to the cap in steps has been discussed since more than two years and would allways have been a logical element of the compromise mass. The difficulty lies in making this attractive enough short term to new entrants. I have said it before and stick to it now: Aston Martin/Prodrive will be the litmus test if they get it right. If they committ to F1 the FIA will have done a good enough job. If they stay outside it will be a good sign that the compromise with the rich teams isn't affordable for a competent new team. Richards will only come if he is sure he can be competitive with a reasonable budget.

[DaveKillens]

So it comes down to the protection of special interests against the common goal of making F1 affordable to enough teams to have a full grid.

In the mean time news broke that Williams have been kicked out of FOTA temporarily. Clever move to close the barn door after the horses bolted.

An excellent summation of the entire affair. And many fans assume that somehow the manufacturers have some kind of special right to race in Formula One, and that their needs have to be addressed. This is racing, and all that matters is what happens on the track. And just because it does not fit in with some corporation's business plan isn't anyone's problem but the corporation. Teams come and go, so do sponsors. Times change, and it is inevitable that over a period of time, Formula One evolves. F1 is quite different than it was in the 60's, 70's, etc. And it will be different in the future.

I checked the AT&T Williams F1 site, and they do confirm that FOTA has suspended them. But it may be too late, FOTA shows signs of fragmenting, which is exactly what Max and Bernie want.

[gcdugas]

So it comes down to the protection of special interests against the common goal of making F1 affordable to enough teams to have a full grid.

I find it interesting that the FOTA can, through voluntary means, get all ten teams to agree to their budget proposals to "have a full grid" but Max's N@z1 tactics have precipitated this crisis and may drive teams away. And the logic of some of you is amazing... you readily embrace the departure of Renault and Toyota and find iSport and USF1 acceptable replacements??? Maybe the dreaded Essex Consortium can suitably replace Ferrari??? Some full grid you want. And as for the vaunted "glide path", the FOTA have a plan for that too but it seems that everything they propose is rejected without even being read by Max Mosley. How can you say that all ten teams agreeing to their set of budget proposals is a "special interest" that is against a "common goal"? It defies logic. By definition they have put that common goal ahead of their self interests when they VOLUNTARILY agreed among themselves to a set of proposals. The real issue here is who is calling the shots. Max can tolerate none other than his unchallenged dictate determining things. The teams will have no more of that. Those days are gone.

In the mean time news broke that Williams have been kicked out of FOTA temporarily. Clever move to close the barn door after the horses bolted.

The debtor is slave to the lender. Williams took advances and sold their sovereignty/self-determination when they did that. I guess they may have to run Cosworth engines next year. The lesson here is clear.... don't sell your soul to the devil.

We know from Peter Windsor that Cosworth are being allowed certain "upgrades" to their previously homologated engine. We all know that we can trust the FIA to be equitable right? NOT! I am certain that the established procedure of letting each team review and approve the proposed "reliability upgrades" will be followed eh? NOT! Just wait until this firestorm hits next season.

[Richard]

In that light Ferrari have never been a manufacturer. They are a racing team with a sports car division that earned some of the money for racing and got the PR from racing for selling sports cars.

Same goes for Maclaren.

[donskar]

DaveKillens wrote:

And many fans assume that somehow the manufacturers have some kind of special right to race in Formula One, and that their needs have to be addressed. This is racing, and all that matters is what happens on the track. And just because it does not fit in with some corporation's business plan isn't anyone's problem but the corporation.

No, that won't survive even the briefest thought. I agree with you that manufacturers do NOT have any special right to race in F1 just because they have lots of money. Do you agree with me that new/small teams do not have the right to enter because they don't have the money?

There are plenty of formulae where less well financed teams can race and make money doing so. No one has an intrinsic right to race at the very top of the racing world.

[gridwalker]

I checked the AT&T Williams F1 site, and they do confirm that FOTA has suspended them. But it may be too late, FOTA shows signs of fragmenting, which is exactly what Max and Bernie want.

Max and Bernie have a unique perspective that should enable them to be the perfect "union breakers", having been the independent constructors' representatives during the FISA-FOCA wars of the early 80's before they crossed the fence to become the heads of the hierarchy that they once opposed ... the fact that the FISA-FOCA war was waged primarily against the interests of the manufacturer teams gives us a nice bit of historic perspective upon the events that are currently unfolding.

As much as many of us may disagree with their actions, it's pretty obvious that there has been some shrewd political maneuvering by the powers that be.

The fact that Williams have always been in a no-win position due to their financial obligations means that the FIA have always known that FOTA unity could never last : the fact that the FIA set the timetable for entry registration placed them in a perfect position to bide their time and wait for FOTA to crack.

Say what you like about spanky and the poison dwarf, there's no denying that they're clever bastards ...

[DaveKillens]

DaveKillens wrote:

And many fans assume that somehow the manufacturers have some kind of special right to race in Formula One, and that their needs have to be addressed. This is racing, and all that matters is what happens on the track. And just because it does not fit in with some corporation's business plan isn't anyone's problem but the corporation.

No, that won't survive even the briefest thought. I agree with you that manufacturers do NOT have any special right to race in F1 just because they have lots of money. Do you agree with me that new/small teams do not have the right to enter because they don't have the money?

Total agreement. If a team does not have the technical and financial resources to enter and compete in Formula One, then they have no right being there.
My concern is that presently, the jump from a smaller series to Formula One is huge. In the past, this difference was a lot less, and it was much easier for a team successful in a lesser series to graduate.

I definitely do not like the manner Max and Bernie conduct their business. I have a very strong distaste for their methods. But I do agree that costs have to be reduced, and that a less costly method has to exist so that prospective teams can enter to compete in Formula One. Max's problem is that he is attempting to drag quality teams down to the lowest common denominator.

It's a shame about Williams, Sir Frank really had no option in the outcome.

[Chaparral]

Say what you like about spanky and the poison dwarf, there's no denying that they're clever bastards ...

No to put it more succinctly they are just total arseholes these days nothing more nothing less Gridwalker - I just get more and more disillusioned with F1 enough is enough for gods sake forget the egos and politics and set the guidelines so we can have a stable sport to follow geezus look at the global sports around you they can why cant F1/FIA. I guess if I hadnt followed this sport since the mid 60s and from the time of the emergence of the internet its been daily and I would be just reading about the various races and results and whatever but now its an ongoing 'Days Of Our Lives' saga this is just frog --- guys. The day is coming soon where things will be very different and the sport will be owned/controlled by the (product) owners but I tell you the greater unwashed audience out there are getting tired and confused as to what F1 is - they dont understand all this posturing and posing by the various parties let alone the rules involved in F1 - my brother who follows V8 Supercars and MotoGP and understands the very simple rules that are applied in those categories asks me 'what the hell was that rule about' and to be honest I have to say to him - I dont --- know mate - as its an interpretation of the rule! The truth is F1 is crumbling in two areas - bums on seats down at least 40% this season and TV numbers down around 30% and I know those figures as I have access to the latter. I just hope to hell that some common sense reigns

[WhiteBlue]

After hours of meetings, the F1 teams' rules dispute with Max Mosley may have moved closer than ever to a resolution on Wednesday.

After a further meeting in London, it was rumoured that the FOTA alliance, despite kicking out former champions Williams, finally agreed to essentially accept a compromise offered at Monaco by the FIA President.

It is believed that Mosley had signalled a willingness to agree to a so-called 'glide-path' for his budget cap, with 2010 a transition year: a compromise position apparently actively urged on by McLaren and Mercedes.

Germany's Auto Motor und Sport believes the main stumbling block now is the teams' desire for a 100m euro cap next year; a huge step away from Mosley's desire to woo new entrants to the sport with an immediate €45m (£40m) cap.

The compromise deal's sweetener, however, could be the technical compromises potentially on offer to new entrants, primarily the permitted use of customer cars in 2010, until the budget cap is lowered for 2011.

Another potential compromise could relate to the thorny issue of policing the cap. The teams were unhappy about the concept of intrusive external auditors, but it now emerges that expenditures may be self-policed, with forensic accountants Deloitte to supervise.

It is believed that the compromise scenario was in fact close to being agreed in Monaco, but that Ferrari and Toyota staunchly refused to embrace the concept of budget capping in any form.

So the two corner stones of a compromise will be a 100Mil€ interim cap for 2010 and customer cars with cost limited drive train. It will be interesting to see if this agreement will be good enough to fill the grid with qualified teams.

Considering that they undoubtedly have a leading engine and KERS, Merc could single handed pull this off. They could even make money on the deal with an unlimited number of entrants. The other positive for them is that they move closer to getting their KERS introduced as a standard which I wouldn't like to see.

I do not see how Ferrari and Toyota will be able to hold the Merc customers back if Mc Laren sign up tomorrow. And then we will have a situation where the slots for 2010 will fill very quickly.

[WhiteBlue]

In that light Ferrari have never been a manufacturer. They are a racing team with a sports car division that earned some of the money for racing and got the PR from racing for selling sports cars.

Same goes for Maclaren.

I would call that a very liberal interpretation of the facts. When you compare McLaren's numbers of road cars with Ferrari's you will find a factor of two magnitudes. And it is well documented that Merc has poured several hundred millions of $$ annually into the partnership. This money has been slightly reduced by the engine homologation but it is still substantial for McLaren's budget.