Renault’s final offer to Red Bull Racing

untitled

One of the most fascinating episodes of big F1 politics is rapidly drawing to a conclusion. The Renault – Red Bull Racing civil war may feel as though it’s been forever, but in reality it is less than two. The new V6 Turbo Hybrid era has seen a significant rise in the power of the engine manufacturer both in terms of influence and the ability to produce the best F1 racing machines. RBR realised this in the early part of 2015 and began to hatch a plan which would see them – like Mercedes and Ferrari – gain control over their power unit in a way their current relationship with Renault does now allow. This was only to be expected given the Red Bull way of doing things in general.

TJ13 revealed 6 days ago, that Red Bull Racing are set to ‘build’ their own power unit going forward. This will see Milton Keynes ultimately design and manufacture the PU either in house or by subcontracting elements to others with specialised skills. Under this new arrangement, Renault will supply on a subcontracted basis a limited number of components for the RBR power unit.

Today Renault has revealed the final hurdle required to get this new deal under way via an article written by Ian Parkes, published in Autosport. The title is “Red Bull on brink of new Renault engine deal”. This is absolutely true – but the ‘new’ deal is like comparing chalk and cheese when considering the existing arrangement between RBR and Renault.

The Parkes story is clearly from Renault for the following reasons. In a recent statement, Dietrich Mateschitz led us to believe the deal signed with Renault for 2015/16 had been cancelled. Parkes refutes this out of hand stating: “With alternatives exhausted, Red Bull sought new talks with Renault, which at no stage voided its side of the long-standing arrangement”. Renault are making it clear, that if they wish – they can enforce the old 15/16 contract and RBR will then have to power the RB12 with whatever Renault deliver for next year. The alternative is to agree a ‘new deal’ and were Red Bull to just walk away they would suffer a breach of contract penalty believed to be around $50m.

The article continues, “Autosport now understands the two companies are close to renewing the partnership, at least for 2016, potentially for longer, but with financial implications for Red Bull. Renault-affiliated sponsors Infiniti and Total will remain on the RB12 next year, but then disappear from 2017 onwards”.

Parks explains that the sponsorship from Infiniti and Total has been worth more than double the amount that Red Bull pays Renault for its power unit. This is an interesting revelation given the repeated accusations from Red Bull that Renault have failed to invest enough in terms of money and time into developing their new Formula One PU. It appears the financial pain for Red Bull begins now, according to Renault.

“Under the terms of any new agreement there will be significantly reduced funds from the two big sponsors for 2016, increasing what Red Bull itself must pay Renault. That additional revenue for Renault will, in part, help fund its works team revival, with its deal for a majority stake in Lotus set for completion around the Abu Dhabi Grand Prix later this month. It will also have more money to invest in its engine development programme as it chases Mercedes and Ferrari”.

RBR intend to only use a small part of the Renault PU going forward. TJ13 revealed this to bethe lower part of the ICE, with a new Mario Illien designed cylinder head sat on top – and maybe also a turbo unit for now. This makes the next comment from Renault even more entertaining. “Any engine performance gains will also naturally aid Red Bull, with the Milton Keynes-based marque scheduled to play its part by running Renault’s updated engine from this weekend’s Brazilian Grand Prix”.

Two key pieces of information lie within the final part of Ian Parkes story. Firstly, that Renault are more than happy for Red Bull to re-brand the engine. A humorous source from Renault is quoted as stating, “[The rebranding] could be something exotic, it could be nothing, or one of those marketing things Red Bull is very good at. Because they have the Energy Station they could call it the Energy power unit, something leftfield.”

Then given that Renault will be removing the Infiniti and Total sponsorship from RBR in 2017, the engine is unlikely to now be badged ‘Infiniti’, unless Horner et al are feeling super generous. The point of an ‘unbranded’ engine as explained in a TJ13 article last week – is for the manufacturer to distance themselves from the unit, just as did Porsche with the TAG engine when the engine was initially launched back in the 1980’s.

The tantalising thought of a 2016 battle royal between a better funded Renault F1 power unit division and an RBR built/assembled power unit – makes the coming winter months appear long and dreary.

Finally – this is a take it or leave it offer from Renault, because: “Autosport understands the new contracts have already been exchanged, but another source added: ‘No decision has been made because it is Mateschitz who needs to make the call. The big boss hasn’t decided yet whether Red Bull stays in Formula 1 or not, that is still up in the air.’”

Were both parties happy with the terms of the contract – they would be exchanged and signed. However, Renault is making it plain it has delivered its final offer in the form of a contract to RBR and in the meantime has explained its offer to the world.

It is now obvious why Maranello declared yesterday that Ferrari was ready and waiting to subcontract out its engineering services to RBR. It amusingly provides the scenario that Red Bull Racing have ‘other’ options for 2016. Why do this? Maybe Mr. Marchionne is just helping out Mr. Mateschitz, because Red Bull are not happy with the financial arrangements being imposed by Renault.

The reality though is as Parkes states categorically. RBR are not free to leave Renault in 2016 and collaborate with Ferrari because Renault, “at no stage voided its side of the long-standing arrangement [for 2016]”. So Renault’s final offer is simple. ‘We see out the 2015/16 power unit supply contract as it stands, or here are the final terms of a revision you asked for. Red Bull have little choice if they wish to further their ambitions quickly to gain greater control over their F1 power unit.

We await Red Bull Racing’s response following the TJ13 revelation last week and Renault’s announcement today, but it does appears RBR are running out of wriggle room. Further it seems that 2016 is going to be very expensive for Dietrich Mateschitz – and one final thought; Hasn’t Dr. Marko has been remarkably quiet for a week or two?

Advertisements

51 responses to “Renault’s final offer to Red Bull Racing

  1. Are RBR going to use their own ERS and turbo on the Renault block or not?

    Is this TJ13 statement true or not?
    ”’However, for descriptive purposes it is the lower part of the ICE, or the block, is for now the component that remains as Renault’s contribution. The Renault engine block will form the core of the RBR PU. Additional components developed by RBR include a new cylinder head, turbo, CE, MGU-K and MGU-H units all of which will then require ‘harmonisation.’”

    Especially this part
    “”Additional components developed by RBR include a new cylinder head, turbo, CE, MGU-K and MGU-H units’
    Do these units exist or not? The answer would clarify the recent Renault and Ferrari statements

    • They will deliver all those components long term. As the article states, the lower engine block and possibly the turbo will be subcontracted to Renault. Our source suggests the ERS components and the CE together with the cylinder head are RBR developed/assembled/subcontracted/engineered and good to go. The BIG picture in all this – as TJ13 reported – is that RBR are taking control of the PU – this is massively different from the current arrangement. Clearly some details are not agreed as the Autosport article today makes plain.

      • The AS article does not mention RBR using a PU composed of RBR produced ERS parts + Illien head to go with the unbranded Renault core. This part is the crux of the issue. RBR going with an unbranded Renault PU is old news – but RBR customising the unit with its own Illien designed ERS parts (IP notwithstanding) is the part exclusive to TJ13. Will this be the case for 2016 or 2017?
        This is the scoop that AS appear to have not asked Renault about in the article, it doesnt sound as though this new arrangement reported by AS involves RBR taking control of the PU – far from it – it states that RBR will get a Renault produced unit like last year but without branding and with a new financial arrangement

  2. As I suspected the Red Bull Renault contract was never terminated. Even though Red Bull sent a letter saying it wanted to cancel it, it would appear that either Renault had not breached any performance clauses allowing Red Bull to cancel or Renault decided to play hard ball and make Red Bull pay for all the negative publicity they gave Renault.
    Red Bull have talked themselves into a corner and it will cost them big time to get out. With Renault effectively cutting off Infinity and Total money and Bernie threatening to sue for $500million if Red Bull want to exit, Red Bull don’t really have any options. They may have bags of money but they don’t have the time to develop an alternative in time for Feb.
    This is all great fun to watch unfold.

    • The only ones giving Renault bad publicity were Renault. Delivering the worst PU on average over 2 years and failing to make gains is as bad as it gets.

      Red bull simply opens the blinds of our window view into Renaults failure and I thank them for that.

      I was almost starting to respect the yellow company.

      • “Delivering the worst PU on average over 2 years”

        LOL. Twisting the facts so that you can pretend that Renault is worse than Honda. Well done, mr No Bias.

        • Honda has 2 cars and 1 season.

          Renault has had 12+ cars over 2 seasons and gone backwards. Nobody is twisting facts.

  3. If Renault want to enforce the contract, then they have to maintain “works Status” for RBR. There is much more to it than what Renaults PR spin is saying

      • What about Renault trying to untangle all the dodgy debt laundering of Lopez and his shonky Genni mates in Lotus?

        I really am surprised Renault could be bothered trying to unravel the Genni mess. Would almost have been better to wait for Lotus to fall over and then maybe come in.

    • By works status you mean? Why do people confuse #1 customer with works as though they are the same thing?

      Doesn’t Williams get priority PUs from merc? Are they a works team?

      • If Red Bull weren’t the works team as they have been so quick to point out, then why would they get they knickers all in a twist if Renault bought another team then. Yes Red bull paid for their engines, like all the other teams under contract to Renault, but they were compensated by the Total and Infiniti deals, which more than covered the cost of the engines.
        I think most of the people on here, and any other forum wouldn’t disagree to the fact that the Renault engine has been a pile of poo, but and this is a big but, there are ways and means of dissolving a partnership, and Red Bull went about that all wrong. That’s why people have called them whiners, moaners etc etc. If perhaps ( and I have mentioned this before ) if Red Bull had done what Lotus did, and just said thank you very much but we are going else where, then perhaps people would have had more sympathy for them.
        Red bull have made this mess themselves plain and simple.

  4. Lol at the how wrong the judge was and also Renault have just bent RBR over hard. I like RBR i really do, but the way they have chucked the toys out of the cot this season is pathetic.

    • To be fair they were the most disappointing toys any parent ever bought.

      I’d throw them too, so would you.

  5. It doesn’t really matter in the end, unless the current formula changes no one will catch Mercedes. The Ferrari and Renault design is inferior to the merc and they can’t change that fact now. Honda who actually did have a chance stuffed up that up too.

  6. TH13.

    What you or Mr.Parkes fail to mention is that red bull have much grounds to claim Renault is in breach of its contact by waiting untill 4 races to produce in updated PU for 2015 while Merc, Ferrari and even Honda used their in season tokens within good time and the fact the Renault PU has been totally unreliable this season.

    Red bull have plenty of evidence that this contract has not been fulfilled.

    Until any of us are present at these negotiations between Red bull and Renault to know what really been said, I will take all of this with a fair dash of salt.

    PS. A suggestion for your next article on this matter: How deeply entwined/reliant these two parties really are on each other and will continue to be in the future.

    • Of course we could all wait until a full and formal announcement is made by both Renault and Red Bull – and just kind of pretend all this is not really happening.

      But we have reported what our sources tell us with an eye as to how and why this information was diseminated – AND the RBR/Renault negotiations is a story in itself. You are correct in thinking that the negotiations have been highly complex and the ground shifting almost daily. The nuclear threat for both parties is a legal dispute – which could last years – and so we can presume this won’t happen, though the fingers have apparently been hovering over the buttons on a number of occasions.

      • The nuclear threat for both parties is a legal dispute – which could last years – and so we can presume this won’t happen…
        Absolutely.
        All those saying it’s obvious that either/both of Renault and Red Bull are in breach of contract clearly haven’t much knowledge of contract law.
        Nothing is ‘obvious’ until litigated and judgment delivered – and even then often not so.

    • One thing that might count against RBR in terms of the reliability side of Renault’s power units is that it seems like they’ve been making Renault rush through upgrades without having a chance to fully test them. If so, RBR can’t really complain if Renault have been saying that they needed more time, and made them aware of them not being fully tested.

      • This is a lot like how companies can rarely sue their IT supplier for a failed project. There will always be mails telling the customer that his requested changes are risky and the earlier promises can not be achieved.

      • Red bull sure have been pushing Renault, And quite rightly, Red bull are impatient, this is what happens when you have won 4 titles in record time.

        But how much more time do they need, maybe until 2017?

        Look at the massive gains Ferrari made from end of last year. Renault have made massive gains backwards from last year.

      • i don’t know how you can possibly ascertain that RBR were ‘making’ renault do anything that they weren’t legally contracted to do. renault could’ve always said no. as nigel has said, until litigation takes place and the contractual details are made known everybody is simply making wild statements without any basis in fact.

  7. I have yet to read anything from Red Bull saying they are even interested in developing a PU. Major car manufacturers, with years of engine development experience, are struggling to get their PUs up to snuff, the current manufacturers are the only engine builders to win championships in F1 for the last 30 years.
    Red Bull lose Total and Infinity money, Renault’s free engines and drop to 4th in the championship, so net lost income; $60-80 million, maybe more? Now they have a Renault short block and have to design and build or have built, the systems and parts for the balance of the PU. The number of companies that can be contracted for this type of work is limited and many are already under contract to other F1 teams. The tooling cost to build engine components is far higher then the cost involved with carbon fibre lay up and all this expense will be incurred to build 16 PUs, for a company that only sells hype to their highly caffeinated consumers. Two F1 teams and a PU manufacturing division; three-quarters of a billion per annum to get it rolling and what if they still can’t win? It doesn’t make sense to me.

    • Worst case scenario, Ferrari have apparently offered RB their subcontracting ‘engineering services’ – which presumably includes machines and tooling

      • A lot of difference between “we can rent you a couple of engineers” and “here, rent our shop”.

      • just imagine the Red Bullies subcontracting their one half bastardised engine parts to FERRARI.
        just imagine Mario Illien/the Red bullies producing and or putting together one half of a bastardised power unit in a hole dug two stories underground and beating the likes of Mercedes,,FERRARI Renault and Honda.

        • I’ll believe it when I see it.
          It’s cheaper to build and maintain underground space. I am sure it is quite a well equipped hole.

  8. confused

    /kənˈfjuːzd/
    adjective

    1.
    (of a person) unable to think clearly; bewildered.

    “she was utterly confused about what had happened”

    synonyms: demented, bewildered, muddled, addled, befuddled, disoriented, disorientated, (all) at sea, unbalanced, unhinged, senile, with Alzheimer’s disease.

    2.
    lacking order and so difficult to understand.

    “the confused information supplied by authorities”

    synonyms: chaotic, muddled, jumbled, unclear, untidy, disordered, disorderly, disarranged, out of order, disorganized, upset, topsy-turvy, at sixes and sevens; informal higgledy-piggledy.

    3.
    What @WTF_F1 is presently. Bewildered beyond measure resulting in a combination of mild irritation, amusement and incredulity.

    “@WTF_F1’s confused giggling is as a result of the machinations of the Red Bull / Renault saga”

    synonyms:
    Really?, Come on…, Whateve’s, Fuck’n what?!, rofl, no way, huh?, wait… what!, I can’t even, nope, for Syria?, for shizzle?, WTF, gotta be shitting me, sooo yeahhh, bitch please, haters-gon-hate.

  9. RBR management probably in no uncertain terms told Marko to keep his trap shut until negotiations are final! LOL!

  10. What’s not clear, is what was all that bleating about RB having no power unit at all for 2016?

    • I think Red Bull were being truthful, in that, unless Renault agrees to let them use the bottom end of their engine they are without an engine. I also think Renault are reliant on Red Bull for the ERS system. So until a contract can be agreed Red Bull technically don’t have an engine for 2016. That is if you believe Renault accepted Red Bulls engine termination letter, which I don’t think they did. I guess Red Bull wanted out of the engine contract with Renault at no cost to themselves but Renault saw this as the perfect lever to get Red Bulls ERS system for ‘Lotus’.
      It’s all so intertwined it is great to watch little snippets of info sneak out and the rumour mill starts churning. Great fun to read about.

      • My understanding is that the ERS system used by Renault belongs to Renault and not RBR.
        As for KERS/ERS RBR cannot claim much success.

      • You didn’t read the article.

        “Renault are making it clear, that if they wish – they can enforce the old 15/16 contract and RBR will then have to power the RB12 with whatever Renault deliver for next year.”

        RB have a contract with Renault, and therefore an engine. It may not be exactly what they want, but it’s an engine nevertheless.

  11. I wonder if the bolt holes on Mario’s heads will line up with a ferrari block! RB must be sick of the sight and sound of Renault! DM will not be a happy camper if he is effectivly funding renault/lotus for next season. Good entertainment for us though.

        • Sure it wasn’t that other site where they just assemble links to other articles and just publish it and then say they’re offering insightful F1 commentary?

        • I just checked it out… interesting and familiar reading.

          I think, in this game, there is only one thing better than when someone loves what you do… and that is when they hate what you do. TJ13’s got under the skin, and in the minds, of quite a few regulars over at JAonF1. Seems, for better or worse, TJ13’s having an impact.

          I rarely, if ever, go there (JAonF1) myself. I’m an F1 website monogamist and, frankly, I prefer the “spice” of this community than the “meat and three veg” found elsewhere. Maybe it’s more nutritious elsewhere… but I like to eat heartily and then take an almighty opinion-dump, which you are all the lucky beneficiaries of.

  12. “worth more than double the amount that Red Bull pays Renault for its power unit”

    I didn’t know works teams paid for thier PU’s!!!

    Just kidding, I know red bull has never been a works team. Glad to see TJ13 catching up!

    Oh by the way, apology accepted.

  13. Just because Renault have not voided their side of the existing contract, does not necessarily mean they are in a position to enforce the continuation of the current agreement in 2016. Red Bull were adament that Renault have not met performance clauses – so perhaps Renault are simply amusing themselves by exercising a technicality, such as not voiding it until the end of the season, when constructor’s standings are finalised.

    Red Bull would have known since mid-year that the best they can hope for is 4th, however ‘technically’ they could finish 3rd by coming 1-2 in the last two races and Williams not picking up any points. This obvisouly won’t happen, but Renault can wait until the chequered flag has fallen in Abu Dhabi.

      • Renault won the first year of the V8’s and were then out developed before the freeze, after the rules were opened to allow them equalization. If they can’t catch up, as is, there will be agreement to allow them to. I would be surprised if they can’t close the gap to Mercedes, Ferrari have and Honda believe they can.

        • Yeah unless the Mercedes spec is frozen, renault have no chance. Even than both Renault and Ferrari have inferior designs to the Mercedes, so they might be able to close the gap somewhat but they will never match them. Honda is the only design i can see fully catching the Mercedes if they can get their whole turbo and energy systems working better.

Leave a Reply