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Vowles explains need for budget cap rethink


Revealing an anomaly of the budget cap rules, and how they were first implemented, Williams boss, James Vowles claims a rethink is needed if a genuinely level playing field is to ever happen.

Still settling in but already making his mark, James Vowles recently revealed that he was shocked by what he discovered on Joining Williams, the former Mercedes strategy boss revealing that much of the infrastructure was 20 years out of date.

"There are some elements that are twenty years out of date, which makes sense if you think through the history of this team," he told "The investment it had was zero for around about twenty years and then an investment firm came through.

"Fundamentally, we're in a situation where a lot of facilities were almost preserved from where they were 20 years ago," he admitted. "Composites is behind what I knew when I first joined the sport with a different team 20 years ago."

Naturally, Vowles and the team's 'new' owners want to bring things up to date - if only to make the Grove outfit attractive to further investment or new ownership - but therein lies the anomaly of the budget cap.

"I'm in a fortunate position that my predecessors weren't," explains Vowles, "where we have investment, significant investment, behind us.

"In fact, there is a strong desire to have Williams return back to a competitive position," he continues. "But to do that requires investment.

"The money's available and ready. (However), the cost cap itself is split into two things. There's an operational cost cap, which is about $145m, which everyone knows and talks about, probably, the most frequently.

"Perhaps more hidden than that, there is a CapEx, a capital expenditure version of the cost cap. That's round about, it's a bit complicated, but $36m spread across four years.

"If you like, every year you can spend six or seven of that, if you just do it fairly equally. That's good in as much as it's restricted down spending. But in many regards, where we are today, that money is disappearing on what I think is basic infrastructure. So if I take an example of things that were in Williams, and this is being very transparent about it, when a designer releases a part, it sort of goes into a black hole. And then 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, so you understand actually, what does the car get made up of.

"Bear in mind, there are 17,000 components and by the time you have designers doing this 17,000 times, you get lost. So you have inefficiencies.

"That software to fix that isn't, unfortunately, 100 pounds, but millions, and even up to 10s of millions if you get it right.

"So, CapEx for me, at the moment, my expenditure was more spent on trying to get some infrastructure in place, so at least we know how long it takes to design space.

"It's all publicly available. But if you actually go look at companies house, you can sort of see that the numbers we're talking about here is hundreds of millions, not 10 million, or 20 million, but hundreds of millions to sort of catch up with the level of investment, from where Williams is today, to perhaps the most extreme expenditures you see in the sport.

"That's a big deficit. And what it's leading to is... Formula 1, the FIA and other teams have been supportive in this, what we're looking for at the moment is the ability to have sporting equity, the ability to have infrastructure that matches our peers, such that we're not fighting with one hand behind our back, but fighting in the same way as other people are."

Asked if he would like to see an increase in CapEx expenditure, he replies: "For us, certainly, where we are at the moment the numbers aren't small. In fact, they're scarily large and what we would have to spend on the site and on infrastructure... The site's OK, that's actually external to the cost cap, interestingly enough, but on machines, for example, or simulators, or the software I was talking about, or your composites facilities, or and I can give you a list, there is a list, in fact.

"What we're looking for is the ability to show where we are today, where the benchmark is, and the ability to spend in order to catch back up to that benchmark."

"We understand where James is coming from," agrees McLaren's Andrea Stella, "because McLaren is a team that has operated without infrastructure, or infrastructure at the same level as some top teams, for a long time.

"This is the reason why we have invested, largely to be able to have a new wind tunnel and our simulator, a composite facility. Even if, actually, these infrastructures haven't seen the light yet, but we are in the final sprint.

"So we are sympathetic, and we understand the point. We are operating at the limit in terms of cost cap, from a CapEx point of view. And actually we would welcome a conversation about relaxing some of these limits, because we would like to further invest.

"It's a complex topic," he admitted. "We are supportive of having this conversation. We are supportive of being in a condition to spend money to be more competitive from an asset and infrastructure point of view. And this is what's happening together with the FIA."

"Before the cost cap came in we talked about it for quite some time," said Otmar Szafnauer. "And I think the FIA, along with the teams and FOM did a good job, with a big focus on the operating expenditure.

"At that time, if I remember correctly, CapEx was also going to be capped. And some of the bigger teams with bigger budgets started getting their infrastructure ready for the cost cap and spending a lot of money on tools, because they knew thereafter it would be more difficult. And those that didn't have the budgets at the time couldn't do the same."

Of course, this is something Pitpass warned about in March, when we said the budget cap was actually damaging the sport.

"I think it's only fair that we level the playing field on infrastructure, and the tools that you fundamentally need to go Formula 1 racing," says Szafnauer. "And that's what we're talking about here.

"I think we've done it or I know we've done it once already for wind tunnels. So for example, Aston didn't have a state-of-the-art tunnel and we gave them dispensation, gave everyone dispensation on wind tunnels. And I think we need to do the rest on fundamental infrastructure that's required to go Formula 1 racing, just to level the playing field."

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1. Posted by Defiant, 01/07/2023 6:10

"@kenji, I think your bias is sneaking out agains kenji. I see what you're saying regarding trying to compete against huge budgets and infrastructure like MB, but it's certainly possible. History has shown us many times that Ford/Jaguar, Ferrari, Toyota, Honda couldn't buy their way to the top every year so artificially hobbling the competition isn't the answer. I would argue that MB enjoyed such a long sit at the top because the other teams couldn't test test test test and develop a car to compete due to the restrictive rules. This is also why RB has enjoyed their sit at the top and will this time around for some time. I should point out that I said "as implemented". I'm also not opposed to the year to year running costs being policed but NOT as it is now, I think it's a disaster for the sport (show).
I wonder if a Williams (investor) could build a state of the art complex and hire a large group of smart people, then sell it to the team for a reasonable sum of money (ahem ahem cough cough) as a work around?????? "

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2. Posted by kenji, 01/07/2023 3:11

"@ Defiant....Whether it was Samuel Goldwyn or Herbie Fields who reputedly used that classic phrase, 'Include me out' but I certainly proscribe to it. Whilst not 100% for or against I support some regulated intervention when it comes to F1 Team/Corporate structure. I see this latest brouhaha as politically driven by the likes of Wolff/Mercedes. Just take note of what he reputedly said some few days back.' Prior to Budget Cap if they'd been lumbered with a dud they simply would've put it into the crusher and built another car!' Well now they can't and they're squealing louder than a clutch of baby porkers. Add to that Hamilton's latest clanger when it comes to time restraints for building future cars!. Mercedes example of 'collective amnesia'. Spare a thought for the Haas's of the world when facing off against the global leviathon that is Mercedes! This list is a lot longer. Maybe some restructuring of the levels of Capex need to be introduced that would provide a modicum of equality amongst teams however, in a nutshell, I support the 'costcap' with some restructuring being introduced. That shouldn't be too hard for the sharpie beancounters to implement."

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3. Posted by ffracer, 30/06/2023 14:58

"Totally agree with Defiant and Pitpass on cap stance, and Vowles has a legitimate point. Previous Williams wasn't in a position nor had the foresight while some some others had the foresight and brilliantly reconfigured themselves to free up liquidity for the major "renos" so... I say think outside the box and find a way. Re-invent yourself like some others did.

In short, Marlboro and BAT are in still involved in F1 by re-inventing themselves in the market. Why doesn't Williams, now apparently in a favorable situation, partner up with an Indycar team/ WEC team/ NASCAR team - anyone not affected by a cap - so their "collective" investment partners can all reap the rewards of a much needed consortium reno / wind tunnel / driver academy"

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4. Posted by Defiant, 29/06/2023 18:40

"Most if not All of us Pitpass readers have been crying about how the cost cap is a bad thing along with this site since the beginning, the part I'm shocked at, is that the seriously clever people that are directly affected within F1 are only just now making noise about it.

The cap as implemented is a disaster and in conjunction with Fiberty is killing F1"

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