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You Couldn't Make It Up

FEATURE BY MIKE LAWRENCE
04/12/2014

Several times recently I have started an essay only to have events overtake me. Not even Turk Thrust on speed could have invented some of the stuff that has been going on.

In fact, I have been overwhelmed by all the nonsense and so what started as a reasoned essay has turned into a multi-part rant, I mean cool assessment.

Caterham was at Abu Dhabi thanks to crowd-funding and Bernie flying the team at no cost. This will not be much comfort to the 230 workers made redundant with seven weeks pay owing. Caterham was not just a team, it was a business, a factory. While some people in F1 earn big money, there are many people employed in workaday jobs, people like secretaries and catering staff, people whose role is not glamorous, but who are essential to the running of a factory.

In these tight times, seven weeks pay is a serious matter, but staff carried on working loyally even when their money was not arriving because they wanted Caterham to survive. The crowd-funding exercise got the headlines, the workers were barely mentioned.

Caterham was supposed to have been bought by a consortium of Swiss and Middle Eastern investors who, so far, have protected their anonymity. One well-known commentator has suggested to me that no such consortium has ever existed. He surely must be wrong; it must be that they are just shy of publicity, a rare occasion in Formula One.

One talks of Caterham, but there is a group of companies so the team is separate from manufacturing and another company owns the right to compete in Formula One. In September, Caterham Sports was sold to Constantin Cojocar, a Romanian ex-footballer, for one pound, and perhaps worth every penny.

Marussia failed to make it to Abu Dhabi, but it is my understanding that the staff were paid to the moment they were made redundant. A story is that the team made it to Stansted airport for the flight to Abu Dhabi and was turned away whereas Caterham flew out for free.

This puts Marussia's viability as a saleable asset in some doubt. Had the team competed in Abu Dhabi, its share of next year's revenue would have been 20-30 million Euros since it still finished ninth in the Constructors' Championship thanks to two points scored by Jules Bianchi at Monaco.

By contrast, Caterham has set a new record for the team which has competed in the most races without scoring a point.

Tony Fernandes, of Caterham, and Bernie have been connected in other fields. Fernandes bought a controlling interest in Queens Park Rangers, one of the lesser London football clubs, from Bernie Ecclestone.

Three cars from well-funded teams has a certain logic. Christian Horner, however, says that Red Bull could not afford to run a third car. This must be a negotiation position because a third car does not increase a team's expenses by a third. Research and Development and running a factory remain the same regardless of how many cars are entered.

Machines which made two wishbones, would simply make three. Twenty years ago, Engine Developments (John Judd) was machining engine parts 24 hours a day, thanks to robotics. Engine Developments was not a big operation considering it made engines for Formula One (Judd and Yamaha) and Indycar..

When running a third car, the only major expense is the engine bill and that is a known factor.

A third car could have a third title sponsor, as McLaren had in the 1970s. In some cases, the choice of a third driver is likely to be influenced by the sponsorship they can bring so the day of the pay driver is not necessarily over.

After the banking collapse of 2008, caused by the greed and incompetence of people who grew rich using other people's money, major players like BMW, Honda and Toyota, left F1. It wasn't just that their showroom market was affected by the downturn, there was a freeze on engine development which is why they were competing in the first place.

In order to make up the numbers, new entries were invited and there was talk of a US$55 million spending cap. The FIA conducted due diligence to ensure that only serious bids were considered. The bids of Lola and Prodrive were rejected even though Prodrive had won World Rally Championships and Lola had been making production racing cars since the winter of 1957/8.

After due diligence, the bid of US F1 was accepted, It surprised nobody when they failed to even make a car, Clearly the FIA's understanding of 'due diligence' is different from most of us.

Of the rest, HRT has gone and Caterham and Marussia are in abeyance. The cost cap never happened and the reason it never happened is the FIA which pandered to vested interests.

To be fair, the cost cap was discarded before the new teams arrived, but every applicant was already committed. After the newcomers were accepted, Formula One turned its focus to the much more expensive hybrid packages. The smaller teams were not part of the Strategy Group which made the decision.

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READERS COMMENTS

 

1. Posted by 4-Wheel Drifter, 06/02/2015 2:04

"Mike: I look forward to the rest of your rant. However, I have very little patience with the back markers complaining about money --or, in their cases, the lack of it. No one in their right mind buys or backs an F1 team expecting to do anything but pour money into it. Lots of money. And even then, you can't expect to make the podium, let alone win. Granted, Mr. M., our Austrian Billionaire, had a good run for his money. But even he is running out of luck these days!"

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2. Posted by Knutty Boy, 17/12/2014 9:51

"Responding to Oldbuzzard.... have you bothered to google Judd Engines?

4 podiums in their first year..... more in subsequent years and thought to be the most powerful non-turbo engine of that particular era.

I'd say a considerably better performance than Toyota or (arguably) BMW brought to the party on (I'd imagine) a slightly smaller budget.

If anything, you'd be better off comparing Judd with Ilmor.... now known as Mercedes Performance Engines."

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3. Posted by Spindoctor, 11/12/2014 12:05

"Quite agree about the performance of Jean Todt. Consequent upon his and FIA's "disappearance", the once reviled Max 'n Bernie show is becoming infused with the rosy glow of nostalgia.
In that byegone era, it was a double act, a partnership if not of equals, at least not the not the dictatorship of Bernito Ecclestone we currently have to tolerate.

However the Teams are equally to blame in all this. CVC and Bernie may own "Formula One", but as the small print should remind us: " other formulae are available...." Compared to the combined economic might of Ferrari \ FIAT, Red Bull, Mercedes, Renault, McLaren, Williams et al Bernie\CVC is not a large fish in a small pond; nor yet a small fish in a large pond: it isn't even a fish! . The current situation in F1 is, to use a different analogy, akin not to the tail wagging the dog, but the tail of a Manx Cat wagging its owner.

Bernie's "power" seems to reside in some atavistic fear amongst the teams that if they were to chuck him overboard, they'd be irrevocably F*!k*d. This is patently not the case. Bernie needs them vastly more than they need him. It might be hard to have a Circus without a Ringmaster, but a Ringmaster sans Circus is a complete non-event.

So what I'd like to see is a serious move by both FIA & the Teams to re-constitute the "World Championship" (or whatever) without Bernie. He can huff & puff as much as he likes, but without the teams & drivers, he's a nobody...."

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4. Posted by MKI, 11/12/2014 11:49

"Mike is dead right to question the FIA's behaviour. It is a governing body in name only. It has zero control over matters it must have to do its job. Presently we are witnessing a form of anarchy; small teams, privately owned circuits, both necessary to a well ordered enterprise, are just two of its victims."

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5. Posted by CL, 08/12/2014 9:48

"One unfortunate side of this is that you wouldn't want to make it up...it's not a very compelling story, hard to sell, hard to keep an interest in. Sport, especially one as reliant on sponsorship and viewing figures as F1, should grip the public and from the lack of growth in TV ratings and crowd numbers it seems to be failing. The politics is interesting as long as it plays a supporting role, but the current messing about with engines, regulations, number of races etc detracts from the spectacle. You couldn't make it up, but in this case - why would you?"

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6. Posted by yakker, 07/12/2014 10:28

"Oldbuzzard, Mike said "a third car does not increase a team's expenses by a third" which is true. He did not say there would be no increase in cost. He is correct with manufacturing, the design team is the same, the machines are the same, you make 6 parts instead of 4 not a big expense. Yes you need a few more people, but the cost would be much less than a third increase in budget. As Mike said "its a negotiation position" how much we will get Bernie for three cars, "transport two get one free" for instance."

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7. Posted by petes, 05/12/2014 3:46

"Don't suppose BE had an interest and disposed of it to Fernandes, in a certain London nightclub that Fernandes was the star of?
Aura, I believe it was called. There one night, gone the next......Taxman still looking."

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8. Posted by Oldbuzzard, 04/12/2014 17:46

""When running a third car, the only major expense is the engine bill and that is a known factor."

Sorry, Mike, but you're off base on the third car cost idea. My first sacastic question is, How many GP wins did Judd robot-built engines garner? The real cost in running a an F1 car is people, not hardware. The third car needs engineers, mechanics, tire personnel, and all the rest of the jobs that a racing car requires. Transportation costs, hotel rooms, meals, uniforms, insurance, etc, etc, etc. I'm not saying Red Bull can't afford it, I'm just saying that your premise quoted above is not on target."

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