Time for a driver strike? The 20 out of 22 drivers think so.

[adrianjordan]

Yeah, sorry but I have very little sympathy for a multi-millionaire complaining that he is still owed some money. These guys will also be able to earn money from personal sponsorship deals, so it's not like they'll have no money coming in.

Also, stop paying the staff at the factory and you'll have no car for the driver to drive....

[Moxie]

You can't say: Aero dept no more wings cause Roma in needs his money. The aero guys are there so they work where they can make gains. The drivers get screwed but they'd rather have a faster car than they would their paycheck anyways.

OH Yes you can! Romain's money should never be mentioned. That is the honesty of which I speak. Once the driver's contract has been signed, the financial and legal commitment has been made...period. Payment is not optional. I don't know the legal specifics in Europe, or the US for that matter, but the phrases that come to mind are "fraud" and " negotiated in bad faith."

[Moxie]

The drivers get screwed but they'd rather have a faster car than they would their paycheck anyways.

Thats kinda bull ---. A driver has maybe 5-7 years to make most of the money he ever will in his lifetime. To get shorted even a year its a huge blow to his personal finances to live on for the rest of his life assuming he survives his career.

The driver though will make more in one of those years than any of the engineers will make in his entire lifetime.

The engineer will also be much more likely to lose a house (and basically their entire life) if they're let go than a driver.

Basically, not paying an engineer stands a decent chance of ruining someone's entire life. Not paying a driver (possibly only for a short period) does not really stand that chance.

There are several basic economic principles here that are being completely ignored.

Contracts

This goes far beyond F1. It affects all of us, and it certainly affects the carbon fiber guys, the team caterer, the receptionist at the factory lobby, and the janitor. If firms are allowed to ignore the financial and legal obligations of contracts, then no ones money is save. Everyone! Absolutely everyone is right to expect that when a contract is signed, that they will be paid for merchandise or services rendered. If the working class guys in the factory get comfortable with the firm breaching the driver's contract, they should not be surprised that it is their contract that is next to be breeched.

Risk vs reward

F1 drivers throughout their careers risk life and limb working their way up the ranks. While some find sponsorship at an early age, many do not, and the driver's family takes the financial risk. Of course only a select few ever make it to the ranks of F1. Most drivers and their families take these financial and personal risks and lose. They spend far more on the sport than the profit. There are injuries, and the constant risk of injury that never receives compensation. Is it then not fair that when a driver finally becomes "professional" that he should be compensated justly for the risks he has taken to reach that level of expertise? Is it not fair that compensation be determined by honest contractual negotiation. Is it not right to expect that those contracts be honored?


My own perspective here is one of workers rights. I am a blue collar guy and I am a strong proponent of sticking up for the working guy. It may appear that I am not sensitive to the plight of the factory guys. The truth is just the opposite. I never want to see firms be given the right to ignore contracts at their discretion. If that we're to happen, workers in all jurisdictions affected would suffer the risk of similar circumstances. I stick up for the workers even if they make millions of dollars.

[beelsebob]

No, I haven't ignored these issues at all. This was only a comment on if you have to not pay someone, which one will do less damage to someone's life. Obviously the correct thing to do is not actually be in that situation, but as some teams are there, I do believe that they're correct to not pay the driver first.

Also note that in most countries (including the UK, which is what matters in this case), they're also legally right to pay the engineers first. When companies run out of money, pretty much every single country says that first you pay the tax man, then you pay the employees, then you pay the companies that you owe money to. For every single driver that I'm aware of, they freelance for the team, rather than being directly employed. That makes them a company, not an employee, and hence lower down the list of people to pay.

[Moxie]

Also note that in most countries (including the UK, which is what matters in this case), they're also legally right to pay the engineers first. When companies run out of money, pretty much every single country says that first you pay the tax man, then you pay the employees, then you pay the companies that you owe money to. For every single driver that I'm aware of, they freelance for the team, rather than being directly employed. That makes them a company, not an employee, and hence lower down the list of people to pay.

To a point I get what you are saying, but remember the F1 teams in question have not gone bust. They are ongoing ventures. If they were to file for bankruptcy (or the European equivalent) I wholeheartedly agree that the factory employees should get paid first.

In the US we would call the drivers "independent contractors." My opinion holds true for the contractors as we'll. the catering firm deserves to get paid it's fairly negotiated fee as well. The flexibility needed should be written into the contracts and budgets. It should not be a surprise to the sucker (worker or firm) that they will not get paid.


USA perspective for our European Friends
The unfortunate truth in the US is that when a firm files for bankruptcy, the tax man is paid first, then the companies to whom money is owed, then the workers are at the bottom of the list, which almost always means that they get nothing. This is true even if the workers unwittingly "lend" the firm money, through quasi-fraudulent transactions. Pension funds and health care funds have been drained by firms who "borrowed" from said funds. I was a victim of such fraud, when an employer reported to me that my healthcare and pension benefits were paid but in-fact had not made the payments. A painful surprise hit me when my health insurance provider sent notice that my coverage had been cancelled (only in the USA!).

[beelsebob]

Indeed, only in the USA. Thankfully, F1 teams are generally based in countries that have more sane laws, that put the rights of employees above the rights of companies.

Don't get me wrong - no one here (me least of all) is saying that Raikkonen doesn't deserve to get paid (of course he does). Only that if someone doesn't get paid, it does much much less damage for Raikkonen to not get paid than for 60 engineers not to get paid (assuming each engineer gets a salary around €100k a year). More so, I would suggest that it does much less damage for Raikkonen to not get paid than for even 1 engineer to not get paid, for the reasons outlined above. Raikkonen can absorb the loss, while an engineer usually can not.

[langwadt]

Indeed, only in the USA. Thankfully, F1 teams are generally based in countries that have more sane laws, that put the rights of employees above the rights of companies.

Don't get me wrong - no one here (me least of all) is saying that Raikkonen doesn't deserve to get paid (of course he does). Only that if someone doesn't get paid, it does much much less damage for Raikkonen to not get paid than for 60 engineers not to get paid (assuming each engineer gets a salary around €100k a year). More so, I would suggest that it does much less damage for Raikkonen to not get paid than for even 1 engineer to not get paid, for the reasons outlined above. Raikkonen can absorb the loss, while an engineer usually can not.

Indeed. I don't know how it is in other countries but here there is fund that guarantees a worker three months salary in
case a company goes bust and can't pay, but one of the requirements is that when the pay stops you have to stop working

[Moxie]

We are falling into a trap of judging either the factory guys or the driver, which is not really the case. An F1 team must set up a budget ahead of time. They had better have a statistical profile of every single part they have ever used. They know that they will need x number of brake pads give or take one SD. They know the failure rate of rubber spark plug covers is 1 per y thousand? They set their budgets and hire their staff according to their project management plan. They set their budget to build so many tubs, and so many rear wings, and so many front wings throughout the season. Engineers and carbon fiber techs don't lose their jobs because the driver gets paid on time. The team principal decides mid season to lengthen the wheelbase by a couple of centimeters. It is not in the budget so the TP simply takes the money from the driver. This is just dishonest behavior, and the drivers are right to stand up against it.

[langwadt]

You can't say: Aero dept no more wings cause Roma in needs his money. The aero guys are there so they work where they can make gains. The drivers get screwed but they'd rather have a faster car than they would their paycheck anyways.

OH Yes you can! Romain's money should never be mentioned. That is the honesty of which I speak. Once the driver's contract has been signed, the financial and legal commitment has been made...period. Payment is not optional. I don't know the legal specifics in Europe, or the US for that matter, but the phrases that come to mind are "fraud" and " negotiated in bad faith."

if done on purpose it's fraud yes. But it doesn't have to be, companies and sports teams do it all the time, spend money on development/production/advertizing/players/etc. with the hope that it leads to higher sales/bigger sponsor contracts
that will eventually make a profit. If it doesn't happen or doesn't happen fast enough they have to get creative to buy time, sometimes it works sometimes it doesn't.

[Moxie]

if done on purpose it's fraud yes. But it doesn't have to be, companies and sports teams do it all the time, spend money on development/production/advertizing/players/etc. with the hope that it leads to higher sales/bigger sponsor contracts
that will eventually make a profit. If it doesn't happen or doesn't happen fast enough they have to get creative to buy time, sometimes it works sometimes it doesn't.

Of course it is on purpose. Let's not be foolish about what is or is not a conscious decision. A tornado laying waste to the team facilities is not unpredictable, yet the financial impact of such a slim possibility is still managed through insurance. A team principal signing a contract to pay a driver, but then investing/gambling the budgeted money elsewhere is a clearly conscious decision. The TP understands full well the potential financial impact, if the gamble pays off, he wins. If the investment/gamble does not pay off then the driver loses. The TP knows exactly what he is doing.

[beelsebob]

Of course it is on purpose. Let's not be foolish about what is or is not a conscious decision. A tornado laying waste to the team facilities is not unpredictable, yet the financial impact of such a slim possibility is still managed through insurance. A team principal signing a contract to pay a driver, but then investing/gambling the budgeted money elsewhere is a clearly conscious decision. The TP understands full well the potential financial impact, if the gamble pays off, he wins. If the investment/gamble does not pay off then the driver loses. The TP knows exactly what he is doing.

Except this is not at all what will have happened. It's not that the team principal signed a contract to pay a driver, and then gambled the budget. It's that the team principal's accountants produced a budget based on assumptions about how much they could sell their rolling bill board for. The team principal then made a bunch of agreements and plans based on that budget. It then later turned out that they couldn't sell their rolling bill board for as much as they thought they could. This happens all the time in business. It's almost never a case of someone simply writing cheques for more than the budget allows, but instead that the budget had the wrong number after summing up the total predicted income.

[Moxie]

Yes, and the businesses that survive are the ones that make conservative budget decisions. They hedge against shortfalls where ever possible. They insure against to the best of their ability against I foreseeable disasters, they make contingency plans, and they don't make capital investments without securing the funds to pay for those investments. If a firms business model is to use worker wages and subcontractor payments as a form of overdraft protection, that is a business which is doomed to fail.

[beelsebob]

The problem with F1 is that if you hedge, and you leave money on the table, you potentially cost yourself more money next season. By leaving potential performance on the table, you might shift yourself from 4th in the WCC to 7th in the WCC, and that's going to mean big money changes in terms of sponsorship.

All the teams have to cut it as fine as they can, or they'll die.

[Pierce89]

The drivers get screwed but they'd rather have a faster car than they would their paycheck anyways.

Thats kinda bull ---. A driver has maybe 5-7 years to make most of the money he ever will in his lifetime. To get shorted even a year its a huge blow to his personal finances to live on for the rest of his life assuming he survives his career.

A faster car means better oppertunities next year. If you told Romain he could have $10m and finish the season at Lotus or race free at Merc, he'd take the Merc.

[Moxie]

The problem with F1 is that if you hedge, and you leave money on the table, you potentially cost yourself more money next season. By leaving potential performance on the table, you might shift yourself from 4th in the WCC to 7th in the WCC, and that's going to mean big money changes in terms of sponsorship.

All the teams have to cut it as fine as they can, or they'll die.

The ends do not justify the means. It is no different than American firms using employee health care funds to fund measures intended to push the stock price higher. It is still bad business. If they cannot control their own budgets without defaulting on driver pay, the they deserve to fall off the grid.