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The future of F1: Mark Gallagher – Part II (09:00)
Ecclestone bids for the Nurburgring (10:00)
Number 22 (10:00)
Lotus brain drain continues (11:00)
Fat Hippo’s Rant: Meltdown at Enstone in Three, Two, One… (11:30)
Ecclestone to stand trial on criminal charges (11:31) UPDATE (13:35) Ecclestone to step down
Ferrari attempt to influence the inevitable (12:22)
RBR10 launch plans change (12:30)
Pirelli contract extended to 2016 (12:40)
Schumacher full recovery now unlikely (12:57)
New Mexican sponsor for Force India (13:27)
The future of F1: Mark Gallagher – Part II
Last Friday we published first part of an exclusive interview TJ13 associate, F1WEB.it, had with Mark Gallagher where the cost and sustainability of F1 was the discussed. The second part has now been released and probably at a very appropriate time considering Il Padrino’s meeting with the teams to “talk about the overall approach to Formula 1″ and to look “at the problems with F1” has in effect been hijacked by the FIA.
As we wait for details of the FIA meeting to surface we are left to ponder how F1 will address the escalating cost, is it the teams that need to take ownership or the FIA? It now appears there is a third party involved, the manufacturers, who are indirectly contributing to the cost of Formula 1.
Mark feels the regulation changes for the 2014 season is too early taking into account the current economic climate and the FIA should have waited until at least 2016. “The timing of these regulation changes are wrong – we should have waited until 2016 when the economic situation had improved and been translated into new sponsorship in F1.”
He does acknowledge that there has been pressure from manufacturers to make Formula 1 more relevant to the road and in doing so, consumer. “Renault made it very clear that unless there was a road-relevant engine in F1, they would quit the sport. And the FIA was very keen to introduce ‘green’ technology.” Mark feels these are the reasons for the new regulations.
He goes on to explain, “At Cosworth we pushed very hard for the new engines to be cost-capped to an R&D budget which would enable the teams to continue paying no more than €8 Million per year (the same as a V8 engine Plus KERS) but the manufacturers were not interested in cost.”
Questioned about Cosworth in particular, he said: “Renault was determined to increase it’s customer base; after using its automotive manufacturer status to attract Caterham away from Cosworth in 2011 it did the same with Williams for 2012, leaving Cosworth with only HRT and Marussia.
“When HRT collapsed it was pretty clear that Marussia would not be able to fund the Cosworth 2014 engine programme on its own, so the project had to be stopped.”
Mark said if he was a running a private team he would have preferred to have a “unique relationship with Cosworth [to] produce ‘works’ Cosworth engines [rather] than to be the 3rd customer of a car manufacturer.”
He finishes by saying the he hopes a car manufacturer or new F1 team works with Cosworth in the future as he believes it is a great company.
Is Cosworth a casualty of the new regulations coming in early and would they have been able to produce a competitive power package for any team, even in a ‘works’ agreement considering the cost of R&D? Regardless, commercially it made sense for Renault to increase the customer base in order to fund the development of the new powertrains and as the saying goes, all is fair in love and war, and the war in F1 has been raging ever since the money men arrived to bleed it dry.
Ecclestone bids for the Nurburgring
Some 300m euro’s in debt and with an attached amusement park which was built on ill advised assumptions, the Nurburgring is up for sale. The regional government who have so poorly managed the finances of this national treasure expect to realise 100m euro’s at best.
Such is the status of the legendary 20km long ‘green death’ circuit where Niki Lauda had his famed crash and near death experience in 1976, that special permission had to be sought from the EU commission for the site to be sold. Well… that and EU development funding rules….
Anyway following Lauda’s crash, F1 never returned to the Nordschleife and it was 8 years before the new 5.1km circuit was built that F1 returned to the Eifel region of Germany.
TJ13 reported some months ago that there has been a bid from the German equivalent of the AA (ADAC) to buy the Nurgurbgring, though it is expected that their bid is much lower than 100m euro’s. The ADAC are the operators for the F1 race in Hockenheim which alternates every over year with Nurburgring.
That said, the Nurburgring F1 race is dependant on regional governemtn funding regardless of whether ADAC owns the circuit or not.
Reuters is reporting that a certain Mr. E has now registered his interest in the asset. However, it appears he is only interested in the Nordschleife and not the modern F1 circuit. The vendors have indicated they are prepared to sell the pieces which comprise of Nurburgring as individual units.
This would make sense because even though Ecclestone and FOM own the odd F1 circuit or two, they make very little money when compared to most of Ecclestone’s other financial interests.
Though why Ecclestone or CVC would wish to own an ageing piece of concrete which will not add to the billions they have already accumulated – is anyone’s guess.
Neither of those F1 partners do sentiment and nostalgia when faced with hard financial facts.
Number 22
Having apparently crushed the collective wisdom with the last #22 and #20 McLaren quick quiz, here’s an easier one. Another number 22, but what can you tell me about it?
A little reminder folks that at 1800 Zulu the next Bar Exam takes off. If you don’t want to start the 2014 leaderboard with a points deficit, make sure you have answered last week’s edition.
Lotus brain drain continues
Williams confirmed a strengthening of their engineering talent earlier this week. One of the new recruits was Rod Nelson of Lotus who will to fill the roles of head of vehicle dynamics and chief test and support engineer.
Today Williams GP holdings announce the arrival of a new IT director, Graeme Hackland, who also is leaving Enstone to join the Grove outfit.
Following comments 2 days ago from Gerard Lopez, there have been a number of reports suggesting the Lotus team is between $100-150m dollars in debt.
Whilst technically true, most of this is owed to Genii. There was a loan from the previous team owners Renault which should now have been repaid, There is a further loan from Proton of some $50m as part of the deal for the team to use the Lotus name and the Proton car division of the same name (a la Infiniti) gains the benefit of the brand exposure.
The debt to Genii is not enormous when considering Vijay Mallya paid around $120m for the Spyker team and later Sahara invested a similar amount for a stake of between 40-50%.
The problem for the Lotus team is not particularly debt, but cash flow. Whether this is down to bad management and overspending, or an over ambitious anticipation of new funds by Genii – only those on the inside of the organisation know the truth.
Reckless spending by operational directors is unlikely as Eric Bouliier has regularly stated the issues are cash flow related. This would suggest those in charge of the cash budget have not got their sums correct.
What is clear, the venture capital investors behind Genii have been told they will not begin to see their investment paid for the foreseeable future and it is in their interests to sit tight and ensure the team remains viable.
Gerard Lopez makes clear the extra cash spent in pursuit of second/third place in the WCC has now been covered by the Genii investors and that Mansoor Ijaz is unlikely to show his face around F1 any time soon. “The Quantum money never arrived, [so] we broke things off with them, [but] we have a full budget for 2014 with our new sponsor PDVSA, and we won’t run up any more debts.”
TJ13 reported exclusively at the time of the Maldonado announcement that PDVSA had insisted on seeing a proper business plan for 2014 before a dollar would be forwarded to the accountants in Enstone. The problem was that to fund any kind of 2014 campaign, the debts of 2013 needed to be paid off.
The problem was that there was a stand-off with the Genii investors who were refusing to come up with any more cash. Common sense prevailed and to receive the $30m ‘gift’ from PDVSA. the investors made a like for like investment which ensures some kind of budget to run 2 cars and drivers for the 2014 season.
In return for this forbearance, the investors have with PDVSA demanded the team begins to live within its actual budget. Simple steps can be made to improve Lotus position such as ceasing to award drivers pay agreements out of future prize money – that should in fact be used to fund the following years operations.
Other areas to save cash include, skipping a test in Bahrain and Jerez, reducing the number of highest paid managers/directors within the team and in 2014 there will be less cash for the development throughout the season for the car.
The problem is that the word Lotus has become a byword for lies, false promises and complete financial fantasy.
Even if we believe Lopez statements about ‘approved budgets’ it looks impossible for Lotus to maintain their 2013 level of competitiveness in 2014 as they will compete on a significantly reduced budget.
Still for Lotus fans, Lopez is now claiming the crisis which was threatening the teams’ ability to even be on the Melbourne start line is now over.
Fat Hippo’s Rant: Meltdown at Enstone in Three, Two, One…
The gavel wielding one beat me to the Lotus story. Obviously, I see things slightly differently…
This rant is also available in German
I’m really getting fed up with Team Lotus. They’ve been the only team that could remotely challenge Red Bull in the second half of the season, but they dominated the headlines for all the wrong reasons. First of all they seem to have a business ethic that wouldn’t be out of place in some of the shadier parts of Palermo and their business plan has all the stability and viability of North Korea’s economy.
I don’t do things like buying shares or other forms of gambling at the stock exchange, because I think it is asocial. Every penny you ‘earn’ at the stock exchange was lost by someone else as nothing is ever produced at Wall Street. The stock exchanges around the world are basically just places were people congregate to steal each other’s money. As a result of that I know diddly squat about the shady world of the financial market, but even a bass-ackward pond dweller like me knew immediately that Genii are not the sharpest tool in the shed. We are talking about a group of people, who invested perfectly usable money in such a future-orientated company as Polaroid and who wanted to ‘hand in a cash offer’ for Saab!
The exploits of the finest alumni of the Vladimir Ilyitch Lenin School of Applied Money Combustion have led to impeding melt-down at the team that once brought a young Ayrton Senna into F1. Many of the team’s hard working employees were looking at the prospect of a rather miserable Christmas to be had, until Lopez and his cronies found a few coins in the back of their sofa and managed to pay the wages they owed their workforce.
Quite a few members of said workforce do no longer work at Enstone. Allison and several other key technical persons walked out and found refuge at teams, which have the slightest idea of how to handle money and quite a few of the ‘foot soldiers’ walked out or were walked-out, since the bigwigs can’t pay them anymore.
In the FIA entrants list Team Lotus is presented with two asterisks, which basically means they aren’t really there at all. That’s right – as it stands now, Lotus is not eligible to participate in the 2014 Formula 1 season. Not that they’re in any condition to do so anyway. For starters they are the only team, which doesn’t have yet an engine supplier. I’m pretty sure Lopez, Lux & Co are still scratching their heads why Renault doesn’t deliver the expensive units for the mere promise of some day being paid for it, maybe. In an interview with Auto Motor & Sport Lopez claims, they are still negotiating and want better terms than the rest of the Renault customers.
*deep breath* 3… 2… 1…
SAY WHAT?!? Are you business punks out of your freakin’ minds? What the heck have you been smoking these days? If it is legal, deposit a crate of the junk near the pond. I’ll pay for it – some day – no really, promised. The other Renault customers managed to actually pay their 2013 deliveries for starters. So if anything, you lot should get the lousiest deal there is: No engine without cash. Don’t tell us about ‘cheque is in the mail’. Fork over the dough or you can push your car around the track.
But everyone with half a brain knows that Lopez & Co are lying through their teeth. Lotus has two asterisks with the FIA, because they haven’t paid their 2.100.000 entry fee yet. They don’t show up at Jerez, because they don’t have an engine to nail in the back of their cars yet. The team has racked up a debt of a mammoth 114.000.000 quid. Every normal business would have to file for bankruptcy by now. I don’t know how things are handled in Blighty, but where the Hippo lives delay of bankruptcy is a criminal offense.
Seriously Lotus, it’s enough. Get your bloody stuff together or bugger the heck off. The last team I’ve seen in such shambles was called Andrea Moda. The only good thing that could come out of it, could be that we finally get rid of Pastor Maldonado.
Hippo has finish
Team Lotus’ new spokesman eases worries of fans over their team’s stability
Ecclestone to stand trial on criminal charges
Most legal experts believed that any further court appearances for Ecclestone would depend on the outcome of the Constantin vs Ecclestone case under consideration by Judge Newey in London at present.
In a surprise move, the Munich prosecutors who gained a conviction and a seven year jail sentence for Ecclestone’s former business associate – Gerhard Gribkowsky – have announced today Ecclestone will be forced to stand trial. No date has been set, but April is indicated as the most likely timeframe.
Anyone with a passing interest in F1 should know the broad case against Ecclestone. He paid a $44m bribe to the director of a German bank which controlled a significant share of the F1 commercial rights to sell their shares to CVC, who in turn guaranteed Ecclestone the continued role of CEO of Formula One Management.
There were apparently other buyers who may have paid more, but would not have retained the services of Ecclestone.
However, behind these headlines are further tales of intrigue. The Munich prosecutors have collected evidence from some 39 witnesses which include Jürgen Hubbert – a senior board member of Daimler Benz.
Following the collapse of the Leo Kirch Empire, the BayernLB Bank found itself holding as collateral a substantial portion of the Formula 1 shares. Gerhard Gribkowsky – who was responsible for advising the bank on the best way to manage (qcquire/dispose of) their investments.
The senior board of the Bayern bank had longstanding relationships with the board of BMW and Daimler Benz and it appears there were discussions between these parties over a deal on the F1 shares. Jürgen Hubbert’s testimony will be key to establishing whether this indeed was the case.
So why have the Munich prosecutors moved now and not waited for Judge Newey’s decision?
The case Ecclestone is fighting with Constantin Median hinges on whether Ecclestone sold the F1 shares knowingly ‘under valued’. The London trial appeared to have gone Ecclestone’s way and it is likely the applicants have not proved their claim against him.
Yet during the trial justice Newey made this comment. “I have to say I find the idea of a bribe being paid to get rid of the banks more plausible than the idea of a bribe being paid to undertake an arrangement under which shares were sold at an undervalue.”
It is the opinion of a British High Court Judge that on the evidence he has seen, it is believable that Ecclestone bribed Grobkowsky to advices the banks to sell to CVC. Somehow Gribkowsky advised the bank not to do a deal with the auto manufacturer’s which suited Ecclestone’s purposes.
This is EXACTLY what the Munich prosecutors wish to prove because this would be a criminal action. To them the value of the shares sold is of little interest.
Moving to announce the trial of Ecclestone at this point is a significant indication of confidence from those seeking to convict him of criminal activity..
CVC have a big decision to make. Do they stand by Ecclestone until proven guilty or not guilty? Or as in the corporate world put him on ‘leave’ until the matter is resolved.
Much will depend on CVC’s appetite to replace Ecclestone set against their fear that without him the tower of F1 cards will collapse. Further, Ecclestone may have information over CVC activity which could be highly damaging to them.
TJ13 believes CVC will see this as an opportunity to have a trial run and see how F1 manages without Mr. E, They can do this without burning their bridges with him and avoid creating an adversary who could hurt them as he has little to lose.
UPDATE: The board of the F1 holding company has issued a statement that Bernie Ecclestone will step down as a director, yet retain a day to day management role, “‘subject to increased monitoring”.
“After discussion with the Board, Mr Ecclestone has proposed and the Board has agreed that until the case has been concluded, he will step down as a director with immediate effect, thereby relinquishing his board duties and responsibilities until the case has been resolved. It is in the best interests of both the F1 business and the sport that Mr Ecclestone should continue to run the business on a day to day basis, but subject to increased monitoring and control by the Board. Mr Ecclestone has agreed to these arrangements.”
The approval and signing of significant contracts and other material business arrangements shall now be the responsibility of the Chairman, Peter Brabeck-Letmathe, and Deputy Chairman, Donald Mackenzie,”
The small clause regarding ‘monitoring’ is clearly designed to get Ecclestone to co-operate and tell all about how he does what he does… when and why.
more as we get it….
Ferrari attempt to influence the inevitable
In life and business, when an idea which is not popular is proposed, an easy response is to pick holes in it and declare it unworkable. However, when that idea appears to be moving toward some course of inevitable action, the participants often change their position and recommend versions of action which suit their purposes in an attempt to help define the ultimate outcome.
Ferrari are now engaging with the budget cap idea. This may be because Il Padrino’s proposed team leader summit in Maranello has been hijacked by the FIA who have demanded the teams’ attendance in Geneva January 22nd. On the agenda is the budget cap.
So for now the red team ‘hide the fox’ that is Montezemolo, and have appointed Stefano Dominicali as their mouthpiece on the matter. “Why do not we consider an approach where a team can only spend what they receive”.
The Holy Grail has been found!!!! Genius solution. Problem solved huh?
So each team has a different budget and within that budget micro budgets. There is a spending budget for the chassis, engine, gearbox etc and each is tailor made and reflects the team’s structures and income.
The first response would be – how the hell is this policed? The very argument used against budget caps per se applies here.
What happens should a team lose a significant sponsor or income stream during the year? Do we count cash in bank on the 1st of January as the funds available? Or do we accept promises and contracts for income during the year?
The main problem with this approach is if it can be made to work, it merely stops teams doing stupid things that force them to go bust. It does not address the competitive advantage of a team spending 10 times more than someone else on a prototype racing car.
Further, F1 should address the question. How much is enough? Does the sport want to portray the image of a profligate set of individuals who will blow several million pounds on developing countless new front wings – each slightly different from the other.
This proposal is predictable from Ferrari. It comes from a team who believes they should be allowed to spend whatever it takes to achieve their goal of beating the rest.
The fact Ferrari are engaging in budget cap discussions having previously refuted the idea out of hand, demonstrates the FIA have been taking a firm hand on the matter behind the scene. Are we about to see ‘Todt, the capitulator’ become Todt, the conqueror’?
RBR10 launch plans change
Red Bull had planned a public launch of their car in the UK prior to the Jerez test, though details of the event were never made public.
As with many of the teams, Red Bull are working around the clock with staff racking up huge amounts of overtime to ensure Adrian’s latest creation hits the ground running at the first winter test.
Today the team from Milton Keynes announce they, like Mercedes and Caterham, will launch their car in the pit lane prior to the first running of the cars on January 28th. Both drivers will be at the circuit that day with Vettel expected to take the wheel first up.
Red Bull will allow a photo opportunity at their launch however it is rumoured the Mercedes will just roll out of the garage at 09:00am local time when the test session begins.
McLaren and Ferrari will launch their 2014 machines online on the 24th and 25th of January respectively. Lotus will delay until Bahrain.
Pirelli contract extended to 2016
Oh joy of joys. Pirelli will remain exclusive tyre supplier to the Formula One teams until 2016. The relatively late extension comes on the back of a veritable annus horribilis for the Italian rubber benders. Overshooting the target of hobbling Red Bull by using steel belts instead of Kevlar belts the tyres proved so flimsy that early races descended into farcical eco runs. They also found out that they had embarrassed one of their major business partners, as Mercedes had chosen the wrong year to come up with a car that managed to reach Red Bull-esque levels of downforce.
Pirelli tried to sort that out with an illegal 3-day private tutoring lesson, but had the misfortune of being found out and in the end it was all theoretic anyway as the tyres were so flimsy that they disintegrated for no reason whatsoever at Bahrain and particularly at Silverstone. Onboard footage of heavy rubber debris just narrowly missing Fernando Alonso’s head were too much to pretend the things were fit for the job. Even those teams with no understanding of aerodynamics, who had heavily profited from the early tyres, unanimously agreed that the tyres had to be changed. Which was done and ruined the rest of the season for anyone but Red Bull fans – all 3 of them.
Not only Pirelli, but even their biggest pond-dwelling critics agreed that much of the problem was to blame on lack of testing. Test runs to develop the tyres were done with a 2010 Renault, which had as much to do with the 2013 cars as the Hippo has to do with less ungainly creatures like gazelles. The measures that are written into Pirelli’s shiny new contract to address this conundrum make entirely too much sense to be coming from FIA. I would hazard a guess that the negotiations took that long, because Pirelli had to do some arm twisting among officials and teams alike to get these demands satisfied.
Each team has to devote one of their allotted 12 days of winter testing to running tyre tests for Pirelli. Naturally that goes down with the teams like a fart in church. With every minute of testing vital to get the hang of the new engines, giving away a whole day will surely be met with less than enthusiastic ovations. That’ll be good news for Lotus, who already scrapped 3 of their test days and a fourth one will now be reserved for Pirelli – well if they show up at all, that is.
But that’s not all. Each team has eight further testing days over the course of the season, or more precisely seven as one of the eight days is required to be a day of tyre testing, too.
Schumacher full recovery now unlikely
TJ13 has avoided reporting on the Michael Schumacher story pretty much since a couple of days after the German’s accident.
Much of the comment and speculation has been ill informed and generalist, written by those with little or no neurosurgery knowledge or experience.
However, former F1 doctor Gary Hartstein has commented today and his views are worthy of note. He writes, “It is highly unlikely that when Michael and his family are finished with hospitals, finished with rehab centres, he will be the same Michael we had known until that Sunday. Having said that, which is admittedly saying very little that isn’t, unfortunately, painfully obvious, the range of impairment we may see spans the spectrum from mild sensory/motor/behavioral problems to more dramatic sequelae”.
This appears to suggest rather sadly, a full recovery for Michael is now out of the question.
New Mexican sponsor for Force India
“Sahara Force India is delighted to begin 2014 by announcing an exciting multi-year partnership with Roshfrans, the lubricant oils specialists from Mexico”.
Exciting??? Seems like they’ve been spending too long cooped up in the factory and need to get out more.
The agreement will see Roshfrans branding on the team’s new car, the VJM07 (rear wing endplate) as well as on the drivers’ suits, helmets and team clothing.
The Force India car will look very different in 2014. Gone will be the Mallya booze brands in will come a host of Slim empire related names. The cars colour will also be different, though teams who change their name or ownership get penalised and discriminated against by Ecclestone from time to time – so whether the ‘Force India’ name will go is as yet uncertain.
Rush fails to impress
Having bombed at the Golden Globes, the biggest F1 movie to be made in living memory fails to attract the attention of “The Academy” and receives no nominations.
Ron Howard’s work is viewed by many in the movie industry as characterised by ‘competent blandness’, and it appears those who care nothing for F1 have marked his latest work similarly.
Ferrari 2014 car name
Ferrari have published a leader board after some 100,000 votes have been cast to name the car that Alonso and Raikkonen will pilot this year.
The last cosworth win is of 2003, the one before that was from 1999. Maybe thats why nobody wants a cosworth anymore. A historical name isnt enough
The problem with Cosworth is not the costs or the number of wins in the last 10 years. The issue here is that once Ford was out of Formula 1 game, Cosworth after 2005 was the only independent “for profit” engine manufacturer. While Renault, Ferrari, and Mercedes could swallow a considerable amount of engine development costs because their F1 engines promote the sales of the manufacturers’ road cars, Cosworth had to recoup all R&D and manufacturing costs through the sales of the engines to the teams (most of which are perpetually broke, specially the ones Cosworths supplies). The only thing that saved Cosworth’s F1 engine program from 2005 until 2013 is that much of engine development was frozen, so they were running effectively the same design that started as a V10 engine in the 90s. The R&D expense was minimal because much of it had already been paid by Ford. However, with the switch to V6 engines, the whole engine had to be developed again from scratch, and there is no way Cosworth would be able to manage this on its own, not at least without having 3-4 paying customers. I actually doubted that having 3-4 paying customers was enough to cover all of the costs, but Cosworths said they were working on the new engine in 2012. Cosworth pulled out V6 development once HRT exited.
Good to see you back in such rare form Danilo!
Now, if you could just replace Palermo for, let’s say, Marseilles, we’re all good 😉
Or Marbella…? 😉
1: The $44,000,000 – where is it now…?
2: re. Andrea Moda – what about Arrows and Prost…? 😉
Budget caps are a terrible idea. This will stall the technological progress and regress everyone to the mediocrity level of Marussia. Moreover, the budget cap will be impossible to enforce. The manufacturers, esp Ferrari, can have a huge advantage here. For example, Ferrari can invest millions in state of art chassis manufacturing technology and keep it off the books because they can clam that the factory is used for producing their road cars and other cars like LaFerrari and FXX. The same could apply to wind tunels, etc. How are you going to police that? Also how are you going to police the team that spends 10s of millions on wind tunel or a data center facility (just as example) but then counts only 3% of that as the current cost as part of depreciation in a given year because after all, that’s an investment, not a cost.
wind tunnels are just restricted by hours of usage allowed – though who checks it out is uncertain…
The issue here is how you treat your capital expenditures. If you build a new facility, is it really a cost of just one year? No, since it can be used for many years. What becomes the accounting cost is based on the concept of depreciation, and that can be gamed to manipulate the costs…
…I appreciate that… but even Ferrari’s proposal doesn’t address this matter. I guess like HMRC you have rules governing the period of write off. Computers 2 years. Heavy plant and machinery 5 years….
1. No-one seems to be talking about Lotus’ 2013 WCC prize money? Surely they have that approx $100M lying around now, which could certainly be put towards paying 2014 entry fee and payroll?
2. Ecclestone’s cute little “I don’t remember” routine won’t work so well in a criminal court. I think the burden will be on him to actively disprove allegations.
..that’s the problem – they were spending it last year….
$90m for second, $72.5m for fourth I think.. hence why they were aiming for second and spent late on to try and get it.. Now they have to invest more to cover that (and no one came in to cover it/invest/sponsor the team).
Near where I am presently staying there was a Richter-4 earthquake this morning. My immediate reaction was to wonder if this meant Caterham had bought out Lotus… 😉
LOL!! To become Caterham-Renault works racing team 🙂
Lotus is considering buying the Italian sports car manufacturer De Tomaso, who were declared bankrupt in 2012.
Lopez himself says this has nothing to do with Formula 1, explaining that Lotus intends to develop a carbon frame for sports cars and that De Tomaso is an option.
Glad to see he has his priorities right ;-P
Friend of mine worked for Lotus cars and although they sold cars their real money came from developing and selling technology to larger manufacturers. Their road cars were more of a rolling billboard.
What I don’t understand is if a company like McLaren with millions of investment is still running their automotive section at a loss how does Lopez think he can make money quickly?
“I will gladly pay you Tuesday for a Renault engine today” G. Lopez shortly before he gives the team to Ross Brawn after paying £100 to deal with the paperwork. 😀
Ok, sure you’re on it but Twitter reporting that Bernie is out as a director, but still managing day to day operations. Which would seem to fall right about where you predicted.
..manage day to day operations ‘with increased monitoring’ 😉
ie “tell us all about what you do each day Bernie”….
LOL sure he’s gonna love filling that paperwork out.
re costs – road relevant power trains to what? hatchbacks? Purist supercars like the Huayra or similar have more powerful and fun engines.
Yes. Pretty soon we’ll all have a fiat 500 with a v6. Twin turbo…
One way or another, we’re going to see more hybrid electric power trains in road cars. In this sense F1 remains somewhat road relevant.
Well I have already given up on Lotus, I just feel sorry for Romain as he is a rising star and this season is most likely going to be a step backwards for him due to a handicaped development budget in a year where development is going to be crucial.
It also looks like 2014 is going to be the year of Ecclstone ass kicking, I got a feeling the German prosecutors are rubbing their hands together with glee. Every dog has their day, but I think Bernie has already seen his finest, in the rear view mirror……
Glad Pirelli have got some testing written into their contract as I have felt for them in 2013, being stuck between a rock and the F1 circus cannot be fun for any company. I did put some Pirreli’s on my car last week in an act of solidarity!
Sad about Shumi, but this is still speculation, look at the early reports on Richard Hammond and what actually happened, I shall continue to mention him in my preyers.
All in all an interesting news day…….
Hammond is one case but perhaps more relevant still, Stirling Moss was in a coma for 6 weeks back in 1962. That an age ago in medical procedures.
I accept that the injury may well be different, but even so, it doe happen.
Hakkinen was in a coma, and says he still doesn’t have all the feeling in the left side of his face…
Always amazed me that he came back and was 2x WDC after such an accident.. That said Massa was also on for a victory at Hockenheim in 2010. If Schumi recovers, I can see him getting back in an F1 car again just to help him/prove he has recovered.
López is a billionaire.
He will only fold Lotus if he thinks that is good business. I think last year’s ‘problems’ are consious choices.
Not sure bout Quantum, though. Wishful thinking? Luring others?
But those ‘debts’ are like we say in dutch ‘broekzak vestzak’ – pocket change just changes pockets.
Yes, and it sounds to me like the cash flow is just being prioritised to the running costs, and guys like Kimi will just have to sit tight and wait for their salary to be ‘eventually paid’.
Only way to become a millionaire in formula one is by starting as a billionaire. ..
As proven by Malaya… But he had an airline too 🙂
The thing that screams out to me from the Lotus troubles (and I know this is hardly cutting-edge thinking) is the vastness of the financial inequality of the F1 grid.
Lotus were able to take the on-track fight to RB, Ferrari, Merc and McLaren (clearly the “rich guys” in F1). But the ONLY way they could do this was to spend far more money than they had. And now they’re in serious trouble – perhaps worse than any other team.
So, is the reality that you can ONLY challenge at the front of the grid if you are a) one of the Big Four, or b) if you bankrupt your company?
I have no issue with F1 being the much vaunted “meritocracy”, but there’s not much point in that if all you do with the prize money is make it impossible to ever earn any merit.
Indeed, Bernie’s latest proposal is just to have a 200m limit, which still gives the big guys a 2:1 spending ratio than the smaller teams.. Lotus may still be competitive on their reduced budget as well. The top 5 would still be the same, but Sauber, Williams or Force India may get more chance of occasional podiums and victories.
Also, Lotus and Sauber’s problems are mainly that they do not exist for a reason outside of F1 racing.. hence their racing costs can’t be recouped.. Lotus will try and rectify this with a car division of some sort.
If Sauber can continue as the only ‘solely F1 focussed’ privateer team that will be an achievement. At the moment, they are relying on money from German, Mexican and Russian sources to survive, along with any other sponsors and prize money.
Maybe putting some stickers on your car of sponsors that pay would have been a nice strategy for Lotus. The team paid for the name Lotus on the rear wing and Genii only lended money to get on the sidepods. The other names, such as MS Dynamics, are partners and don’t generate cash.
It’s true.. but I think they tried hard and failed. The red areas last year were meant for Honeywell as title sponsor, who pulled out of the deal in the end. Strange though that no one would sponsor such a front running F1 team, given the exposure Infiniti have had from being on the Red Bull..
Mr E steps down!…but he’ll still be running F1 on a day-to-day basis with increased scrutiny by CVC.
…by the way, unique opportunity for the teams to take over from Bernie…that is if they don’t kill each other trying to carve some piece for themselves, and I can see Ferrari and RBR wanting to do that being the ones out of FOTA. The other big one right now is Merc and Macca is on the outside for now until Honda comes in.
Yes, if the sale of TV rights is invalidated it would be a huge boost to the teams to hire a management company to run at a fixed cost and keep much more of the money for themselves. Of course, that means they would all have to learn how to play nicely together and I’m not sure I see that happening anytime soon either. LOL
Also more twitter gossip re Haas racing sniffing around entering an F1 team for 2015. Dunno if it will really happen, after the last attempt for an American team went so spectacularly awry, but they do have a fairly successful NASCAR operation that they already run so it seems to be a better bet than the last time around.
If anyone can do it from the USA, it must be Haas. He also tried in the 80s with Alan Jones and Lola? They have facilities in Charlotte, a factory in Brussels and a full size wind-tunnel, currently being used by F1 teams. Throw in Alexander Rossi, Conor Daly and an ex-F1 team manager etc. and you have an all-american F1 team.. with a chassis started by Dallara (revived HRT.. uhoh!).
Carl Haas, different one methinks. The chassis is the one sticky bit as far as I can tell. The fact that they aren’t proposing to fabricate it themselves bothers me a great deal. Without those facilities development will be difficult, even though Dallara do have a stateside “engineering center” at Indy.
Also, most curiously, Danica Patrick is one of Haas’ drivers. Hmmmmm…… her presence in IndyCar boosted its ratings by 12-24% depending on how she had done the previous race. I would imagine her presence in F1 would probably be a shot in the arm to Stateside ratings at the very least.
And possibly kick off a discussion or two here on TJ13 as well, LOL.
Apparently not the same Haas as the Lola Haas that had Alan Jones
Ron Dennis back as CEO of McLaren F1.
Speculation: Whitmarsh to leave and Ross Brawn to take over as Team Principal?
About time! Boom! But I think Brawn will want a more senior role don’t you?
Hey, who said F1 can’t make the news in the US of A? msn.com has this nice headline:
“Ecclestone to keep running F1 during bribery trial, steps down from board”
Congratulations FOM, your promotional activities in the US are working!!!! Finally. Except for Schumacher’s injury, this is actually the first reference to F1 I have seen on the major interwebs in the last five years.
Reports are saying Ron Dennis is now CEO of McLaren Group, replacing Martin Witmarsh. He also says he will be examining the on track and off track performance of the racing outfit. Looks like a lot of people were very pissed off with last years disappointment of a season….. Exciting times at McLaren in the build up the the new partnership next year.
Brawn, Alonso, Hamilton dream team at McLaren by 2016 latest…… I said this months ago and stand by it. I wonder what odds the bookie will give me on a prediction like that……I will let you know 2moro lol
Sounds more like a nightmare to me…
I’m not certain Ross was really ‘good’ with Lewis… and Fernan has only ever been good with The Brigante…
But then, Brawn has always been good with a challenge…
We’ll see. After all this was a man who oversaw Mclaren between 1991 and 2009. Hardly the best record in Formula One..
In fairness, Carlo, Ron was Team Principal from (at least) 1982 – 2009. During that time the team won 10 drivers’ championships and 7 constructors’ championships.
This, actually, IS the best record in Formula One during those years…
(Ferrari won a combined total of 16, Williams 13)
I agree Tim, but I believe that Dennis had some huge advantages in the 80’s which he has never managed to replicate.
Every era moves Formula One along. With the Tag engine, Mclaren/ Barnard or Dennis moved the goalposts by introducing a made to measure unit, something that had never been considered before.
He also employed Lauda and Prost, let’s be honest, both top 4 in that era? Their competition was Williams which was developing a new Honda engine and Ferrari – a stumbling legend which had no fight left in it, like it’s dying owner. Ron’s team had raised the game.
Then Honda came with Senna and Honda demolished a stagnant F1 engine scene and Mclaren were the only team willing to spend huge in a season that was to be the last of an era before the switch to naturally aspirated engines.
Honda was also a game changer in that the engine mattered, they were engineers and it was part of their training, but when Renault began pushing the barriers of technology, Honda left the sport. By this point, aero had started to overtake engine performance.
It’s perhaps significant that Honda has always competed in top level motorbike racing but not cars.
Since then ie 1993, Mclaren have not had a particularly stellar record.
When I consider their 1998 and 1999 titles, I measure them against the competition and to be frank it was poor.
Ferrari had Schumacher and almost won the 1998 title, in fact if DC had moved off the line in Spa, something he has admitted was his fault, then 98 would have been a red year.
Mclaren had switched to Bridgestone before the start of the season as Goodyear was leaving at the end of 98 and Mclaren called it a breach of contract so they moved supplier. In 1997, Bridgestone was already seen as the best tyres but needed a top team to prove this. Mclaren jumped and yet everyone claims it as a Newey car advantage.
1999 Schumacher broke his leg, didn’t want to return to help Irvine and yet Irvine almost won the title.
After that, the Newey effect made absolutely no difference to title challenges until he landed at Red Bull.
Even the 2008 challenge wasn’t spectacular. A talent as great as Hamilton made hard work for the title.
I respect Dennis enormously but there is something within the Mclaren infrastructure – their matrix – that doesn’t work properly and it’s not just Whitmarsh, this includes the Dennis years too.
I have no doubt Mclaren will be competitive again, as will Ferrari (it’s in their DNA) but Formula One has moved on so much since the eighties; the understanding of the darker sciences and the willingness to push barriers of technology.
Yet I don’t think the Mclaren-Honda alliance will be anywhere near as successful as people wistfully think it will – certainly not as the late 80’s were.
Dennis-Brawn-Alonso and Honda = dream team?
We’ll see if Brawn would want to work with Dennis. I always felt Dennis was over-seeing all WHitmarsh decisions, much as you feel Ferguson’s legend is casting a shadow over Moyes. I’m not sure Brawn would put up with that.
Alonso, well personally I feel he peaked in 2012. Last year saw the introduction of a few errors in races. I saw the same in Schumacher back in 2003 and knew that his best days were over. He’s still top 3, but last year was the first I would place Vettel above him, but maybe the Japanese want the ‘samurai’
Well argued, Carlo, and I wouldn’t disagree. The failure of Newey to be the all-conquering powerhouse at McLaren that he was before and has been since is certainly a puzzler…
I also think it’s fair to argue that McLaren blew three drivers’ titles in the past decade (2003 & 2005 for Kimi, 2007 for Alonso/Hamilton) – but whether this is on the “plus” side or “minus” side for Ronso is also debatable 😉
Very interesting comments, Carlo… until the last line…
I would expect the Japanese to quickly see through an amateur ‘ronin’… 🙂
F14 T
FIAT
Why would Ferrari name their F1 car this?
Because ferrari is fiat, and Chrysl4r wzs to long as a name 😋
I understand the synergy, I just didn’t think Ferrari would want to brandish it with their brand.
They don’t do it anywhere else, so why do it for their arguably most prestigious engagement?
All through the shumi years there was a fiat emblem on the car (since they payed his salary) maybe fiat wants more recognition, like renault wants from red bull. Only fiat knows how to get it. Dont forget its all about secret agenda’s. Fiat is busy to reestablish them self. And f1 is probably a part of that plan since they have a huge advantage by being the owner of one of the ultimate teams.
Fiat bought Ferrari in 1969. The FIAT branding first appeared on Ferrari F1 cars in 1977.
In the 21st century they still own the team and if you look back to the 2003 F1 car it was called F2003-GA. The GA stood for Gianni Agnelli who had died prior to the season.
Throughout Schumacher time at Ferrari, in fact since 1984, the driver’s wages were paid by Marlboro.
What I don’t understand is where the F 1.4 T comes from, isn’t the engine a 1.6litre six cylinder turbo engine?
How dumb am I?
Of course, the F is Ferrari, 14 is this year and T is for turbo… DOH!!!
You, of all people Carlo 😉
What, that nice Mr. Ecclestone on trial for bribery? Nonsense!! This can’t be true, because he told me that he didn’t bribe anyone and I believe him. What possible reason would he have to lie?
Yours,
Pisspot Business Editor
Re. RUSH: I can’t be bothered to look on Variety or IMDB: how is it doing financially at least? Has it made back $$$+profit? Was it expected to pull in any award nominations?