The Formula One civil war heads into another long cold winter, where agreement on almost anything is impossible. This state of affairs is hardly unexpected given the three-headed hydra that governs the sport.
TV figures are in decline as have been race attendances at many venues, and so all the F1 vested interests pay lip service to improving ‘the show’, but few agree on what needs to be done.
The regulations for 2014-2020 were supposed to be a period of stability for Formula One, where changes would be small and gradual and engine costs would reduce as the opportunity for the power units to be redeveloped was reduced year on year.
Stable regulations give new teams and engine manufacturers the confidence that a U-Turn won’t derail their multi hundred million dollar investments before the term on their business plan is complete. Yet radical car regulations for 2017 and now new engine designs for 2018 threaten this.
The FIA and Bernie Ecclestone are teeing up Ferrari and Mercedes as the bad guys in this new change process, which is apparently designed to make life easier for smaller teams. Yet the reality is Ecclestone is involved in maybe one last big F1 power play and has convinced the usually benign Jean Todt to back him.
The rhetoric for cost cutting power unit costs to customer teams and the new ‘budget’ engine is a polemic to garner favour as support is being apparently offered by the FIA and FOM. Yet the big agenda from the sport’s regulator and commercial right’s holder is to control the alleged ‘power’ of the F1 power unit manufacturers.
Jean Todt has admitted the FIA made mistakes during the consultation period for the new ‘green’ Todt inspired formula. Cost control should have been considered, agrees the FIA president, but the horse bolted long before the gate was closed.
The alternative solution to mitigate the customer PU teams spending around 20% of their annual budget on a power unit, is to award them more money. However, Bernie cannot force the bigger teams to tear up the contracts he agreed with them which were designed to buy favour for his new F1 governance agenda – including the F1 strategy group.
So the alternative is for FOM, Bernie and CVC to ‘invest’ in the sport, and reduce their take so that the customer teams can be awarded more annual cash to mitigate the price of the V6 Turbo power units. This of course is unthinkable, so Bernie is laying the blame squarely at the feet of Mercedes and Ferrari.
Yet the Fiat Chrysler Automobiles (FCA) chairman, Sergio Marchionne, Ecclestone may well be creating an adversary with bigger balls than even Enzo Ferrari. Whilst new to Formula One, Marchionne understands as well as anyone the corporate maneuverings required to see off opponents. Luca di Montezemolo was revered by many Italian F1 fans as responsible for assembling the dream team of Schumacher, Brawn and Todt, which turned around Ferrari’s decades of underperformance. Yet Marchionne ousted the former Ferrari chairman in a coup détente that was as swift and calculating as the knife of a silent assassin in the middle of the night.
Marchionne invoked the Ferrari veto when Todt and Bernie pushed through a cost cap for power unit supply to customers starting in 2017. By way of response, the FIA said in a statement: “In the interest of the championship, the FIA has decided not to legally challenge (Ferrari’s) use of its right of veto.”
The response, was at the subsequent meeting of the World Motor Sport Council, a “near unanimous” vote saw F1 supremo Ecclestone and FIA president Todt handed a mandate to address “a number of pressing issues in F1”.
However, unlike in days of yore, Ferrari is being backed by Mercedes and at the following team principal’s meeting in Mexico, Toto Wolff offered his support to Maranello.
“There is a set of rules which were implemented in Formula 1 two years ago and we started developing those engines three, four, five years ago based on those set of rules. And as large corporations we work on long-term planning, it is part of the budget process and the R&D process. From that standpoint, part of it is a business case and you need to calculate how much you can charge for those engines, how much you can recover for those engines.
“Ferrari is a public company now so it is difficult as a commercial entity to just be confronted with a situation where a price is being imposed because it somehow times the commercial ability for refinancing”.
Interestingly, the response of Todt and Bernie to the Ferrari veto was to propose a new ‘budget’ F1 engine to ‘persuade’ Ferrari and Mercedes to comply. Yet Mercedes and Ferrari then marshaled their customer teams and this threat was seen off at the subsequent F1 commission meeting, which threw the idea out.
President Todt then convinced the FIA to give himself and Ecclestone a mandate to take control of Formula One in a move designed to intimidate Ferrari and Mercedes. A deadline has been set for January where the power unit manufacturers must come up with a solution to the cost of power units or face once again the prospect of an FIA commissioned ‘budget’ F1 engine.
But now Honda’s head of motorsport, Yasuhisa Arai, has stated this week that this agenda with take ‘a long time’, and it appears that now Ferrari, Mercedes, Renault and Honda are lined up united and are refusing to be cowed by the threats of Bernie and Jean.
Marchionne is clearly leading the revolt, as he ramped up his rhetoric yesterday. At the traditional pre-Christmas Maranello press briefing he stated Ferrari would walk away from Formula One rather than have improper regulations forced upon them. “We would find other ways to express our ability to race and win,” said Marchionne. “It would be a huge shame [if Ferrari left F1], but Ferrari cannot be put in a corner on its knees and say nothing”.
He went on to point out the incompetence of the FIA by failing to include a Homologation date in the regulations for 2015, which then saw in season engine development allowed. But the Ferrari president advocates a simplification of the rules so that they are not, “interpreted by lawyers, but by engineers, as it was a few years ago.”
Marchionne also condemned the move to give absolute regulatory power to Todt and Ecclestone. ”It’s a choice we obviously do now share, because we believe that the development of the regulations should be done in a co-ordinated manner. This view is also shared by Mercedes and Renault. We spend hundreds of millions of Euros, so we are talking about decisions that should not be taken lightly”.
The head of FCA then issued a severe warning in regard to budget engines. “If we make Formula One like NASCAR, we [read all F1 manufacturers] would lose the advantage of experiencing on track solutions [for our road cars].
The Ferrari boss places the ball squarely back in the court of Ecclestone and FOM by concluding, “I understand very well the difficulties that smaller teams face, but this is something that FOM has to solve; it is not something Ferrari has to solve.”
Given that Jean Todt has conceded that the unrestricted development allowed in pursuit of his new green F1 engines should have been cost controlled, Marchionne’s position is understandable. Further, 10 FOTA teams warned Bernie Ecclestone that the cost of the new V6 Turbo Hybrids was of ‘grave concern’ and yet he chose to award the midfield teams and inappropriate share of the pie.
Formula One is clearly in crisis, and unlike any other Ferrari Supremo, if Sergio Marchionne threatens to leave the sport – he appears to actually mean it. And with him go Mercedes, Renault and Honda, leaving a single open seater championship powered by Jean and Bernie’s unicorn engine.
But be not deceived, this standoff has the makings of one of the most serious ever faced by Formula One. And the irony is that it is occurring under the watch of the FIA president who has consistently stated he seeks consensus.