Renault and Red Bull – A messy divorce
Record penalty and a dirty trick for McLaren
Renault and Red Bull – A messy divorce
Translated from the original article on Auto Motor & Sport
Red Bull’s Motorsport Consultant Dr. Helmut Marko is normally a quite outspoken man, who doesn’t evade a straight answer. When asked about what engine the team will be running in 2016 however, the Austrian is uncharacteristically tight-lipped: “The official answer is that we have a contract with Renault until the end of the 2016 season. According to the information available to us, Renault will decide about their future before the Monza GP and we will respond accordingly.”
Rumours tell a different story. Scuttlebutt has it that Red Bull have terminated their contract with Renault last week, citing the bad results and lack of progress on behalf of Renault. An exit clause allowing them to do that is believed to be part of the contract.
The trust between Renault and Red Bull is irreparably destroyed. The situation is not helped by the fact that Renault have wasted four development token on a new evolution of the PU, coming at the Sochi GP, that is expected to bring a gain of only 0.150 seconds per lap. If all those whispers in the paddock are true, Renault has told their disgruntled customer that they won’t accept a contract termination under any circumstances. In that case the divorce would become messy and decided in court.
A lawsuit would be bad for Red Bull, as Mercedes would not supply engines in that case. In principle the German company is willing to supply the Austrian team, but does not want to be the reason for legal action between a future customer and another manufacturer. On top of that, Mercedes and Renault have started a joint venture in their road car divisions in autumn of 2014 and the Stuttgart based manufacturer would not want to step on the toes of Renault’s CEO Carlos Ghosn.
When asked why they would supply a direct opponent, Mercedes’ answer is unmistakable. “Internal competition improves the business. If we want to become world champions we have to beat everyone.”
Decision before Monza
The part of Marko’s statement that’s definitely true is that Renault will decide until then whether or not they buy Lotus and if the comeback as a works team will happen in 2016 or a year later. Theoretically that does not have any influence on the supply of Red Bull and Toro Rosso, as Renault plans to honor the current contracts, including the ‘premium status’ of Red Bull Racing.
Dr. Marko, however, adds that the team could adapt the 2016 car to a different engine as late as December without disrupting the preparation for the next season.
Hippo’s Comment:
Renault have Red Bull by the proverbial balls. Even if that exit clause exists, they just need to do a Monisha and ignore the conditions they once agreed to. If Red Bull goes to court to enforce their contractual rights, they’ll get what is rightfully theirs in the same way as VdG still got no drive in March, because Mercedes will chicken out.
It’s a clever move on behalf of Mercedes. They force RB to go with Renault another year before they get some serious competition. By then they will have won three consecutive titles with Lewis and all but one fan base will be as fed up with them as people were with Vettel and Red Bull. Bringing in a strong opponent will spare them the PR backlash that RB was subjected to after years of dominance, but not before securing enough silverware.
Record penalty and a dirty trick for McLaren
The two McLaren drivers have incurred an eye-watering combined grid penalty of 105 positions for the Belgian Grandprix. In practical terms, that means they will start in Zandvoort. The Woking team exploited a loophole in the changed regulations. Last season grid penalties that couldn’t be served were to be carried over to the next race, which in McLaren’s case would have meant they’d be starting bog last for the next ten years. However, this year, no matter how many positions you have to drop, after the start it is considered served.
McLaren exploited that fact and installed two new engines in both cars on Friday and Saturday, knowing they would start last anyway after the 30 place penalty for Alonso and 25 place penalty for Button on Friday. Now with the record breaking 105 place drop, nothing will change, but they have two fresh engines each in the pool for both cars that they can install at will for future races without incurring any penalties.
If Red Bull has an exit clause they do not have to go to court to enforce it, they just stop doing their part of the contract (paying Renault).
I remember that a few years ago Renault Motorsports stated that 4 customers was ideal. I understand that as that the customers were funding the F1 project for (almost) 100%, so that Renault HQ had to pay little for the whole F1 project. I’d guess that Renault Motorsports made the business cases for Ghosn to choose from with the most positive scenario, Red Bull as a customer in 2016. So if Red Bull steps out for 2016, Renault Motorsports needs to beg for more money from Renault HQ.
The threat of a lawsuit is just Renault Motorsports making a lot of noise to defend their F1 project.
Except if Red Bull just stop playing ball at all with Renault, and Renault aren’t convinced that’s the end of it… what power units are Red Bull going to run? If Mercedes don’t want to get involved unless it’s a clean end to the contract with Renault, and you’re currently better off running the cars Flintstones style than running Honda PUs… Ferrari? Sure RB ran Ferrari engines before, but that was back when they weren’t a threat. Would Ferrari want to supply power units to a team who would be quite likely to pummel them with it? I don’t see it.
So then Red Bull are left with nothing. And Red Bull aren’t the only ones that could start court proceedings. While Red Bull might think Renault have failed to meet performance clauses, Renault might think otherwise, in which case Red Bull simply backing out would be a breach of contract.
I also wouldn’t necessarily take the “4 customers” comments as only referring to the funding of the programme. It could also be to do with economies of scale in the manufacturing. It might be that to serve 2 customers you have to have basically the same infrastructure and nearly as many people on the job as for 4 customers, but of course the cost isn’t spread as thinly. That and of course with 4 customers compared to any smaller number, you’re also gathering more data.
For Mercedes to supply Red Bull, won’t they have to drop one of the teams they’re currently supplying? Is there not a rule limiting the amount of teams one manufacturer can supply with engines?
If the rumours that Renault is looking to buy Lotus, surely it won’t be for next season, given that they’ve got a contract to use Mercedes power unit in 2016.
I’m pretty sure Mercedes won’t mind ripping up that contract. Red Bull will pay for PUs, with Lotus it’s a gamble.
Renault won’t run a Merc PU and I don’t think Merc will let Renault engineers close to its PU…
We all know if they have to, Fia changes the rules.
Renault buys Lotus then that’s not an issue as I’m sure Mercedes and Renault would come to an agreement to end that contract early. Opening the door for Red Bull to get Mercedes power units. Or Red Bull will have to resort to buying the cosworth Power Unit design and doing it themselves or leave the sport entirely. But at least Bernie will be somewhat happen, it’ll keep F1 in the headlines, as Lewis might wrap the title up early (but I hope it goes down to the wire again).
Red Bull can buy their way out of the contract with Renault. Enforcement of the contract is not a smart idea because Renault stands to incur more criticism and brand damage if their 2016 power unit is a dud. The relationship between Red Bull and Renault is at the point of no return.
As far as Renault’s purchase of Lotus, I think that the process can be sped up for it to happen for 2016 given the team’s current financial situation so that the Lotus cars stay on the grid. Renault could use the money from Red Bull’s buyout to finance the Lotus purchase.
Yes, there are risks involved in a relationship with Red Bull but there are ways to lessen the risks and protect themselves. Toto Wolff needs to stop playing chicken and go ahead with the relationship with Red Bull. He needs to make sure that he lays out detailed parameters with Red Bull regarding criticism of the power unit, etc. Red Bull can be a strong ally in Formula1 Strategy Group for Mercedes and there wouldn’t be as strong of a push for power unit changes if they were supplying power units to Red Bull.
“Toto Wolff needs to stop playing chicken…”
I agree… but geez, I’d hate to be your cousin. 🙂
Also, my mind’s eye continues to see Red Bull Honda in the not too distant future. Below is a snapshot of my mind’s eye to prove it.
http://s18.postimg.org/fkldnqhmx/image.jpg
See?
And yes, my mind’s eye does look like a vagina on fire. Just a Greek-Australian thing.
Saying what we think is a blessing that Austrians are born with. Seriously though, if Toto ever needed my help; I’d help him. It can be worked out so a Mercedes-Red Bull partnership can happen. The key will be Toto laying down the parameters of the partnership with Red Bull so that it doesn’t turn toxic during the duration of the partnership.
If though Mercedes and Renault are industrial partners, something can be worked out so that Mercedes can supply power units to Red Bull. Toto Wolff is just taking the diplomatic road and using excuses instead of getting ready to move forward when the messy divorce between Renault of Red Bull happens.
All that’s going to happen is more tension and brand damage for Renault if they continue the power unit partnership with Red Bull.
If the partnership between Red Bull and Honda ever happens, I would expect it to be more tense and brand damaging for Honda unless the cars with their power units are running near the top of the order when the partnership between Honda and Red Bull commences.
Renault’s intention would not be to run their engines on Red Bull, but to be massively repaid for the termination. I guess.
Sky F1 reported that an “intention to terminate” had been served to Renault by RedBull, so it is looking like it could get very ugly, very quickly.
As for McLaren, any team in their position would have exploited the same loophole. It’s just no-one else needed to, yet!
#BlameRenault
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Brilliant site. Found it Friday but forgot to share it. So here it is 😉
LOL… brilliant!
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They are expanding. Before long it will be a conglomerate worth 1 billion.
“Translated from the original article on Auto Motor & Sport”
Does one need permission to publish that?
I predict an Enstone based Renault team will win the WDC and WCC before Red Bull will. Remember this team knows how to win – they did with Schumacher in the Benetton days and with Alonso in the Renault days. I would love to see GroJo take the title with them!!
That’s not exactly a watertight argument. Ok, so the Enstone factory has pumped out some championship-winning cars in the past. How many of the key people from the Alonso period are still there now, let alone from Schumacher’s days? And maybe 10 years ago they were on the ball, but how state-of-the-art are their facilities compared to the big teams these days?
Red Bull have also won championships. 4 of each in a row. And far more recently than any arrangement of the Enstone team. And the one thing really stopping Red Bull from being competitive the last couple of years has been… Renault. So why is a team based in the same factory (and that may be where the similarities end really) powered by the worst power unit on the grid (Honda doesn’t even count as a power unit) likely to turn it around and beat RBR to another title? Renault are going to have to go from not spending much on their PU development (relatively) to spending a fortune on a constructor team as well as PU development, and likely with no customer teams to help foot the bill. RBR basically need to keep doing what they’re doing, just with a better PU in the back. One seems a whole lot more likely than the other to me.
One thought I’d had. Maybe Renault are trying to be even cleverer than we give them credit for. At some point Dietrich is going to get fed up and pull the rug from under Red Bull – and I certainly know which team I’d rather buy if the choice was between Lotus and RBR….
Whether he’d sell to Renault under those circumstances is another issue of course.
I’d say the divorce looked fairly likely going back as far as the time when Torro Rosso stopped being the likely candidate for a buy-out. DM has been wanting to get rid of them for a while now so Renault could have probably got a good deal. To turn your back on a ‘valued’ customer and go after a team running another engine who is saddled with loads of debt isn’t a sign of a good working relationship.
I doubt that Dietrich M. is looking to sell Red Bull Racing right now. It is one of the most recognized brands in Formula 1. Red Bull are participating in Formula 1 for marketing purposes and it’s achieving its purpose. Red Bull Racing has to pay for itself for Dietrich to stay in Formula 1 and he understands that there are going to be difficult years. Unless the balance sheet is massively in the red, I don’t see him selling the team to Renault. He’s probably too upset at them because of the power unit issues to sell them a successful, turnkey Formula 1 team.
Even if Renault buy the Lotus team, I don’t see them being that successful because Renault is a step behind the other manufacturers as far as their resources and willingness to commit those resources to their Formula 1 project. I think that part of Renault’s struggles in Formula 1 are knowledge base issues, physical plant issues in Viry, and monetary issues. They were so far on the back foot in the first year of the new power units, that it was a bit shocking. Renault was asleep at the switch while the other manufacturers were working and committing resources.
Part of Renault’s issues (and Honda’s) are because of the testing restrictions that are currently in place in Formula 1. The restrictions are now economically driven but they are going to hurt the sport in the long run.