The piranha club is the nickname for the senior individuals who are part of the decision making in Formula One. Teams, the FIA and the sport’s commercial rights owners are all represented in different ways depending on the topic in hand.
There is a comic strip of the same name where the members of the society are freeloaders, hustlers and other shady kinds of characters who will do anything to make a quick buck and gain them the advantage over the rest.
Capital Expenditure Restrictions
Whilst not written with Formula One in mind, the Piranha club does well describe the treachery and horse trading that has gone on over the years within the governance of F1.
Most F1 fans know all to well the intimate details of the cost cap recently introduced as part of a suite of FIA financial regulations designed to stop the bigger teams outspending those with less funds.
However, the is as part of the regulations also a capital expenditure (Capex) cap, which Williams team boss James Vowles recently explained.
“It’s a bit complicated, but [it’s] $36 million spread across four years. Every year you can spend six or seven of that, if you just do it fairly equally.”
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However, historically the smaller teams had less money to design and run their F1 cars and less money to invest in their machinery, wind tunnels and other capital expenditure items which are the tools the larger teams have in place.
The Capex limit has been centre of much discussion recently, because its restrictions have frozen the status quo which is inherently full of inequality.
The Williams team has struggled for finance for the best part of a decade and prior to their lucky win with Pastor Maldonado at the 2012 Spanish Grand Prix they had not won a race since Brazil in 2004. James Vowles revealed much of their infrastructure is now 20 years old and the team wants to upgrade it so they can compete on a level playing field with the other teams.
“If I take an example of things that were in Williams, when a designer releases a part, it sort of goes into a black hole,” said Vowles.
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“There’s emails going backwards and forwards between production to try and find out where their part is, how it’s being upgraded, how big it is, how long it will take.”
“Normally, that would go into a digital system that can be tracked to understand what the car gets made up of. Bear in mind there are 17,000 components, so by the time you have designers doing this 17,000 times, you get lost and you have inefficiencies. The software to fix that isn’t £100, but that’s millions and even up to tens of millions if you get it right.”
Much of Williams’ current investment on the the building blocks including machines, simulators, and software. Vowles believes an increase in the CapEx could enable teams at the back of the grid to invest further in facilities which enable them to improve their chances of moving forward.
The team requested at the recent F1 commission meeting an exemption for them to be allowed to catch up, but the Piranha club went into full self interest mode.
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F1 self interest takes over
Vowles expressed some frustration after the meeting where nothing was agreed, though stated it was understandable that other teams all have to look after their own interests.
“It’s unfortunate and it’s disappointing, frankly, that we’re in a situation where again, that meeting, I would argue, went round in circles if nothing else,” he said.
“And to a certain extent, it will do, because everyone in that room wants to make sure that they’re not losing out relative to everyone else.”
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Ferrari refuse to budge
Ferrari boss Fred Vasseur was unrepentant of his position which in effect bans William’s from catching up.
“My point of view is that we have a regulation,” Vasseur told motorsport.com
“We’ve changed many times the regulations. And for me, the good shape of F1 today is due to stability.
“If you start to change the regulation each week because someone has an issue, or wants to invest somewhere, it’s the end of the stability. And it’s a non-end process.
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“Because today it’s Williams who want to have a new ERP [enterprise resource planning] system. Tomorrow, it will be another one who wants to buy new trucks, or someone would like to have the last version of the simulator.
“It’s a non-end discussion, and we have to remember that the cost cap was the biggest step forward for F1 in terms of stability, convergence of performance, profitability of the teams and so on.
“It means that either we go in this direction, and I’m fully supportive, or it’s the end of the cost cap.”
The irony of the situation is that Williams are one of F1’s longest standing competitors but this benefits them not one jot. When Haas F1 joined the sport in 2016, they were exempt from all regulations until the season began and so could spend whatever amount of capital to build a modern infrastructure without sanction.
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The FIA is currently examining the applications from team png to join F1. One of which is Andretti who are currently building a $200m state of the art facility to house all their global motor racing activities.
If accepted, they too will have state of the art machinery, computer’s and software which will clearly out perform the ancient kit Williams are using.
Yet one big F1 team is supportive of Williams’ request. Toto Wolff argues that it was wrong for other teams to jump on the bandwagon and derail the debate at the recent F1 commission.
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“Why the Capex discussion came up is that a team, Williams, said their infrastructure is sub-par and they wouldn’t be able to catch up with trivial things like machine equipment, and up to the technical things like simulators,” Wolff revealed.
“Then, as a consequence, some teams jumped on that bandwagon to say, but actually, we would like to have a little bit more capex.
“And that number went up from $50 million to $60 million, $70 million, $90 million, and suddenly, it was like free reign and why don’t we change the Capex levels? But there is no reason to do that. I think there is one team we need to treat differently than all the others,” concluded the Mercedes’ boss.
Toto held shares in Williams and was an executive director for the team prior to his appointment by Mercedes. However, the Austrian has sold down his holding and so has no self interest in arguing Williams’ case.
One solution proposed to end the logjam was that each request from Williams be treated on a case by case basis.
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“We came up with a list,” Wolff revealed.
“Some of the big teams said we don’t want a list, and if Williams get stuff, we want to have stuff. And that was simply shut down.
“We need stability of regulations, on financial relations. And you need to be able to have a business plan that is valid and not a free rein every two years where we change the goalposts on capex.
“So that’s why this was the end of the capex discussion, but maybe we will find a solution for Williams.”
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Capex could copy the F1 (ATR) system
Formula One recently introduced the Aerodynamic Testing restrictions (ATR) which allow teams lower in the constructors’ championship more aero testing time.
The allocation is based on snapshot of the table each year and a sliding scale of allowable testing is applied from the top receiving the least to the bottom which gets the most.
This could be utilised for Capex spend too which would allow the teams at the bottom of the pile to catch up more quickly.
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Aston Martin benefit from exemption
Aston Martin were seventh last season and they came out of the blocks this year having the second best car on the grid, much of which will be due to the extra aero testing time they were allowed.
Further, Aston Martin and McLaren appealed for Capex exemptions to replace their ageing wind tunnels and this was granted.
It is clearly a farce for Williams to be forced to use two decades old equipment, while Haas and possibly other new teams were unrestricted as they prepared to join Formula One.
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Just @alex_albon taking FIVE places on the opening lap 😱
The @WilliamsRacing driver was of to a roaring start!#BelgianGP #F1Insights @awscloud pic.twitter.com/YCvG5Ijb37
— Formula 1 (@F1) July 31, 2023
