A weekend off…

It is the first weekend of the winter break and I am going to have the day off, at least once I have finished this post. Tomorrow (Sunday) I will spend most of the day writing the next “Business of Motor Sport” newsletter so that all the readers of that can go to their desks on Monday with an up-to-the-minute assessment of the world of motorsport money, new trends, important movements in the industry and so on.

I hate the newsletter on the one hand because it takes a lot of time to produce and cuts into my weekends (and has done for 15 years) but on the other hand it ensures that I am up-to-date myself on a number of different championships around the world which is very useful when one is looking at the bigger picture of motorsport in general, rather than just at the blinkered world of Formula 1. This is probably the least known of the things that I do (and the most expensive) but if you want to know what is happening then it is the thing to read.

Last week, as an example, Monday’s newsletter (click here to take a look) featured the news that Toyota would be pulling out later in the week (days before the news broke), that there was a discussion about the future of Renault, that Williams would announce Rubens Barrichello and Nico Hulkenberg, that all was not well between McLaren and Mercedes and that Bridgestone was quitting F1. There was also an assessment of some of the innovations that F1 tried in Abu Dhabi. This week there will be a discussion about alternatives to building vast expensive wind tunnels (something that is necessary these days) that may even produce better quality data; there will be a discussion about the retreat of the Japanese from F1 and the increased involvement of the Arab world; there will be a discussion about the relevance of FOTA; about the new title sponsor of the Indy Racing League and the latest on lay-offs expected in NASCAR circles. For more information and the chance to give me some money, click here…

Now I am off to have some fun, so don’t expect any more posts today, unless there are any real emergencies in the F1 world.

Why Ferrari is tough on the small teams

The other day, in an apparently idiosyncratic press statement, Ferrari poured doubts on the viability of the Manor, Lotus, USF1 and Campos Meta Formula 1 teams. The Italian team said that just because the same number of teams were sitting around the table did not mean that they had the same quality. In some respects that is a fair point but it hardly seems like something that the team that leads FOTA should be saying. Surely, it is in FOTA’s interest to talk up the new teams rather than talking them down?

“We must also wait and see just how many of them will really be there on the grid for the first race of next season in Bahrain and how many will still be there at the end of 2010,” Ferrari said.

Hmmm…

And then today Ferrari boss Luca di Montezemolo is again talking about teams running three cars. What is that all about when there are, in theory at least, 26 cars on the grid next year?

The answer is obvious if you ever study Machiavelli. And it explains exactly what is going on at a political level in Formula 1. In the same statement Ferrari hinted that the reason that manufacturers are withdrawing from F1 is because of Bernie Ecclestone and Max Mosley. Ferrari did not name names but the implication was thicker than icing on a wedding cake. The team seems to believe that Mosley and Ecclestone drove the manufacturers out of the sport in an effort to break the power of FOTA. With a group of strong manufacturer-led teams working together, FOTA was strong. With a bunch of weak new teams, FOTA is not. All it takes is one of the new teams borrowing some money from Ecclestone and he will have power to influence FOTA. In the old days that was a role that was consistently filled by Flavio Briatore but the Italian started believing in the power of FOTA and saw an opportunity to take over from Ecclestone. The end result of this was that he fell from a very great height because he got caught doing something wrong and suddenly found that he had no friends at all. It was a long drop and a painful thud at the bottom.

The chances are that some of the new teams (and perhaps even some of the older ones as well) will end up being beholden to Mr E and that, therefore, is the danger for FOTA. So, strange that it may seem, it is actually better for Ferrari and others to try to talk down the new teams so that they fail and thus do not get a voice in FOTA business. If the numbers of cars falls too far, then three-car teams is the answer…

Are you following me?

FOTA had no say in which new teams were picked for 2010. However there are ways of dealing with the weak and feeble that the Spartans employed centuries ago: there was no coddling, if a child was weak it was left out at night on a hillside. Only the strong survived. Children were treated harshly to toughen them: they were beaten, made to march without shoes and forced to go without food. To survive they had to be tough. Clearly this is Ferrari’s belief.

Watch out too for the teams moving closer to the FIA. The federation has a new boss and he has campaigned saying that he will make the sport better and stronger. This means that ultimately he will try to get more money flowing into the sport and less going out. CVC Capital Partners is taking 50% of F1’s income and is giving it to banks. They are in it for the money and they have taken plenty already. They want more. The problem they face is that at the end of the new Concorde Agreement in 2012 the teams are pretty keen to cut back CVC’s take from 50% to around 15%, which is a much more sensible figure. The only way that CVC can hope to keep its current slice of the pie is if the teams are divided and conquered and so it is fair to suggest that the primary goal of CVC and its lieutenants in the next few years will be to break the power of the teams. The teams know this and they understand the dangers. In the circumstances they need to accept the losses that happen; they need to avoid getting allied with weaklings and they need to find strong new friends.

Looking into the crystal ball, I see the teams and the FIA working together to win the sport back from the financiers…

Convoluted? No, just business.

What is Renault up to?

Renault’s Jean-Francois Caubet says that Renault is staying in F1 and that all is well for 2010, but after Toyota who can you trust these days? Toyota people went blathering on about such ludicrous ideas as hiring Jenson Button and Kimi Raikkonen when the reality was that the team was was up to its neck in trouble. Hopefully those involved will get promoted to new jobs selling Land Cruisers in Kyrgyzstan.

Yesterday Carlos Ghosn, the boss of Renault, visited the huge Renault factory in Flins in order to unveil a joint venture with Nissan, the French Atomic Energy Commission and the French Strategic Investment Fund which will focus on advanced research and manufacturing and recycling of batteries for electric vehicles. the project has the backing of the French government and French Minister of Industry Christian Estrosi turned up at the event. Ghosn was asked about the company’s plans for F1 and said: “We will let the season develop normally. I do not want disrupt the current season with any statements from us. I can guarantee you that before the end of the year we’ll make an announcement about our strategy for competing in Formula 1.”

One can only assume that Ghosn knows that the current Formula 1 season ended last Sunday and that his reference to the cuurent season therefore refers to 2010. This would tie in with what Caubet has said about the future for 2010 being settled. The big question, however, is what advantage is to be gained from delaying an announcement. Leaving the decision to the start of December would make it virtually impossible for the team to compete in 2010 unless Renault agreed to “do a Brawn” and give the team a pile of money as Honda did with Brawn GP. But if the company is going to pay for an F1 season it is illogical not to take advantage of that investment. If Renault pulls out in December completely and the team closes down the French company will face compensation claims from everyone else in Formula 1 as it has made a legally-binding commitment to the sport by signing the Concorde Agreement. Carlos Ghosn is many things but he is not stupid so this is obviously not what he is doing.

To my mind, therefore, Ghosn and his men are working on something and expect to have the deal finalised by December. The question is what is it that they are trying to do? Obviously selling off the team, or a part of it makes some sense. The company has made a commitment to F1 but there is no reason why its risk cannot be shared with another investor – if there is one out there.

It makes no sense at all for Renault to offload or close down its engine factory at Viry-Chatillon. This has been around for 33 years whether the company has been in F1 or not and it is hard to imagine that Ghosn would give it away. The Renault F1 team may not have done the job properly but Red Bull Racing did a terrific job with its Renault engines this year and the Milton Keynes team is seen as a likely contender for the World Championship in 2010 so it would be a waste of investment to throw the engine supply deal away, particularly as the F1 engines rules are frozen until the end of 2012 and Renault can remain pretty competitive. If Renault did sell its F1 team it could increase the badging on the Red Bulls and enjoy success that way.

Any other ideas?

Well, there is one, but it is pure speculation. In April the Malaysian car company Proton said that it was in preliminary talks about a technical collaboration with Renault. The French company has no assembly plant in Asia and little real exposure in the region. This week the Malaysian government made the point again that it is looking for a foreign partner for Proton and that such a move would have the added incentive of allowing the foreign manufacturer to not only use excess capacity in Proton factories, but also to set up wholly-owned plants inside the country, something that was previously impossible. The Financial Times is reporting that the Malaysians have approached several companies offering them the opportunity which could increase Malaysian exports and make the country an automobile production hub, as well as ensuring the transfer of the latest automotive technology and establishing research and development facilities in the country. This is what Malaysia has always wanted.

This is what the planned Lotus Formula 1 team is all about. It is starting from scratch at premises in England but ultimately wants to have a strong Malaysian involvement.

So, Renault wants to expand in Asia and Malaysia has car factories that need investment, while Malaysia wants to be involved in F1 and Renault has an F1 team it may not want.

There have to be some synergies here somewhere.

Renault holds firm

The announcement that Toyota was quitting F1 caused a bit of a media kerfuffle yesterday over whether or not Renault will stay in F1. In order to head off the speculation the team’s Jean François Caubet talked to the French sports daily L’Equipe and explained that the meeting was not an emergency one as had been speculated but had been planned for some time and that everything was in place for the 2010 season.

“We have our drivers,” Caubet said. “The budget is decided, we are entered in the 2010 World Championship. The season has already begun. Carlos Ghosn [the Renault boss] asked us to get back to a decent level and for that it is necessary to make Enstone and Viry earn their keep. I think that to be third is a reasonable objective.”

Some sources say that the L’Equipe interview was done in Abu Dhabi before the meeting was called and insist that Renault is still in the process of deciding what to do in the future. There are reportedly three options: continuing in the current form; selling the team and becoming an engine supplier only; or withdrawing completely.

Renault has committed itself to staying in the sport until the end of 2012 but, as Toyota has shown, car manufacturers seem to care little about ignoring such commitments if they want to change their minds. it remains to be seen whether Toyota will have to pay damages for breaking the agreement but in theory at least this is necessary as the Formula One group (and indeed the other teams and the FIA) should be compensated for Toyota’s lack of commitment.

By Ferrari to Ljubljana

There are times when you read about Formula 1 and you must think that the sport is nothing but politics and treachery; big business and cynicism. It is not really like that. Most of the time it is great fun. It is a world filled with good people, some of the best you could ever hope to meet. And every now and then there is a fairy tale that comes true.

Here is one of them:

“Dear Santa,” you write, with your best spelling and punctuation. “Please can I have a nice shiny Ferrari to drive across Europe this summer. I would like to visit lots of new and interesting places, meet some unusual people, eat some delicious meals and drink a little wine. Oh, and can you make sure it is sunny all the time…”

You think for a while about asking whether Keira Knightley can come along for the ride, but we all know that Santa has a lot of stuff to do and dealing with actresses and their agents is seriously hard work.

“PS,” you add wisely, “can someone else please pay the bills.”

What chance is there of Santa delivering on that request? The automotive journalists get all the gigs like this. They are the ones who dictate whether it is worth paying $50,000 extra to accelerate from 0 to 60mph a little quicker than you really need to. They are the fighter pilots of automotive journalism; in F1 we are the bomber boys. We plod along, flying through the flak, while they are eating truffles in Transylvania.

In July this year, however, Santa Claus sent me an e-mail. Well, the guy in question is really called Luca and although he wears red a lot and has a certain stature, he would need a big white beard and lots of white to hair to look anything like the real Santa. And, being an Italian, he would need a few lessons in how to say “Ho, ho, ho” without it coming out as “Oh, Oh, Oh”. But dear Luca does have some of the powers of Santa Claus. The email asked whether I would I like to drive a Ferrari California from Budapest to Maranello after the Hungarian Grand Prix.

Having nothing better to do at the start of the summer break (many F1 journalists don’t want to travel when they get time off), I replied that it was a delightful suggestion and I was available. It was, of course, a very tough weekend for Ferrari in Budapest with Felipe Massa ending up in hospital with head injuries. Luca was flat out all the time. So the only instructions we received was that we needed to be at the New York Palace Hotel at nine o’clock on Monday morning. And we had to ask for Mayra.

It was all very James Bond…

We (my GP+ partner David Tremayne and I) had packed as little luggage as we dared (as Ferraris are not famed for having space for Louis Vuitton trunks) and DT even remembered to bring a map of Central Europe to give us a vague idea of where we were going. We decided that if we were in charge of such an expensive automobile it might be wise to go west and out of countries where we might be murdered in our beds for the car keys. We figured we could stop off at Lake Balaton (because it was there) and be in Austria by nightfall on Monday. The idea of going to Slovenia was, in our biased minds, completely unthinkable. To western folk, all the -enias and -akias have bandits in the hills.

The New York Palace is a stunning place. It was built to house the Hungarian offices of the New York Life Insurance Company and was only turned into a hotel a few years ago. There was Mayra, a delightful Spanish lady, who suggested that we have a coffee in the hotel cafe. As we walked in I realised that I knew it already. Back in the Communist days, (when it was nationalised and called the Cafe Hungaria) I used to visit the place every year. It is the most stunning and atmospheric restaurant in a city that is filled with surprises. It was once the epicentre of Budapest’s thriving literary scene. I heard it had closed down about 10 years ago, but the Boscolo Group, which turned the insurance building into a hotel in 2006, had revived it in all its glory.

Around the table there were four journalists: the two of us plus AutoBild Hungary’s Kristof Karlovitz and Christian Hoenicke from Der Tagesspiegel in Berlin. There were two babysitters: Mayra Peromingo and Carlos Quintanilla, who run a small agency in Madrid called Pret & You to arrange such adventures. As we would discover, they do it so well that Ferrari had picked them over all other such companies in Europe. There was Lorenzo Marcinno of Studio Carrer who was along to take photographs and a rather quiet fellow called Gianvito, an Italian-speaking Ferrari test driver, who was going to act as a shepherd, making sure that the two $197,350 Californias did not disappear off to Moscow.

Outside sat the fleet: a gun metal 599 GTB which Gianvito would pilot, with Carlos sitting alongside him as navigator/radio operator. There was a red California and a blue California. Christian immediately claimed the red, believing that all Ferraris should be red and mumbling that he would not be seen in one that was not. David and I do not care. We are English. We believe that less is more. Blue California was good for us. James Bond would have made the same choice. The tail-end Charlie of the convoy was a Fiat Ulysse people mover, laden with luggage and spare wheels. It was driven by Mayra, who quickly emerged as a fearless conductrice and earned the nickname “Fernanda Alonso”. She had Lorenzo to keep her company. We all kept in touch with walkie-talkies, our call signs “599″, “Red California”, “Blue California” and “Ulysse”.

With coffee done and plenty of road ahead we are soon out on the pavement, being given a five minute lesson in how to drive Ferraris and how to convert the convertible. We decided that Blue California would start the day topless. And then we were off through downtown Budapest with Carlos radioing landmarks and telling us to go left or right. The first stop would be a photo opportunity at the celebrated Széchenyi Chain Bridge that spans the Danube between Buda and Pest.

After roaring backwards and forwards across the bridge several times while Lorenzo snapped pictures, we stopped outside the Hungarian Academy of Science for some static shots. And then we hit the start buttons again, listened to the delightful rumbling of the Ferrari V8 and it was off across the chain bridge, into the very grand Buda Castle Tunnel, which cuts beneath the old town of Buda and took us out to the M7 motorway. In the tunnel DT felt the need to gun the engine to hear the roar. It sounded good. The sun was shining and life was good.

We soon began to understand that three Ferraris running together in Hungary constitutes an event. Out in the country districts it was as though the circus had come to town. Wherever we went there was interest. People waved, gave us the thumbs up, took photographs, or simply gawped or giggled. One or two ladies wiggled their hips. Little boys wanted to touch the cars with chocolate-y fingers. Red California was the star of the show, no doubt about it. A red Ferrari attracts more attention than a blue one. Or a grey 599 come to that. If you need attention this is the car to have. It is a babe magnet. We headed initially for the wonderfully unpronounceable town of Székesfehérvári, which sounds like an invitation to an orgy if you say it too quickly and no doubt has led to a few slapped faces over the years.

Leaving Budapest proved to be rather more difficult than we had imagined. The traffic was dreadful as most of population of the city seemed to be on its way to Lake Balaton for the summer holidays, but with the roof of Blue California down we did not really care. After just a few kilometres Gianvito has a major moment avoiding suddenly slowing traffic. That burned some rubber and made hearts beat a little faster, but it was not exactly what we had in mind.

As a non-supercar driver I was impressed by the ease of the whole thing. For some a Ferrari is a beast to be tamed; for others a status symbol. For me it was just an impressive car and it was pretty easy to drive at the sort of speeds that I wanted to drive at, particularly on the automatic setting when one did not even have to think about it. It is the perfect car for the idle rich. DT is more of an automotive lion-tamer than I am and he was soon waxing lyrical about the twin clutches and the incredible lightness of this Italian beauty. The V8 sounded lovely, produced plenty of grunt and with seven gears it whirled along as quickly as we wanted it to. It could do 0-60 in under four seconds and would reach 193mph if you could find a gap in the traffic. The acceleration was flawless and the big old carbon ceramic brakes gave you confidence. After a while we stopped for gas (this happened quite often during the next two days) and feeling very touched by the sun we decided that Blue California should stop showing off and put her top back on again. My son would have loved it. It was like watching a Transformer, with bits going in all directions until suddenly we were sitting in a very different car.

It was getting towards lunchtime when we arrived at Szántód to take the ferry across Lake Balaton to Tihany. The lake is 77 miles long and between four and 14 miles wide. But it is only 30ft deep and so the water is a wildly translucent blue and much warmer than deeper European lakes. And so it is a tourist mecca.

The Mediterranean climate makes the northern shore ideal for growing grapes and the wine business is big. On the ferry it was suggested that we take country roads through the wine country rather than the the lake shore route and so after the Tihany peninsular, which is reminiscent of the French Riviera and is probably rather like it was on the Cote d’Azur in the 1950s, we disappeared into the dusty back roads. It seemed to take forever to make much progress, but at least we were finally able to get a feel of what the California was capable of doing. Lorenzo soon had us doing photoshoots in the narrow lanes.

The design of supercars is a very subjective thing and some do not like the rounded lines of the California, preferring more aggressive angles. I like it and felt that Pininfarina had done a great job with suitable echoes here and there to remind one that this car is from the same stable as the 1957 California 250. DT was becoming more and more poetic on the subject of the paddle shift and the brilliance of the gearbox as we ducked and weaved our way through the back country.

By the time we hit the main road again it was getting late and everyone was hungry and it was time to eat up as much road as possible to get us to the planned stop, a majestic palace called Hertelendy Castle, set in 150 acres of land with everything that a proper gentleman needs for a dirty weekend (apart from women): helicopter transfers back to the real world, golf, dressage horses and a lovely hotel. It was a terrific venue for lunch but, alas, it was all a bit rushed as a result of the back country tour we had innocently undertaken.

As soon as the coffee cups hit the saucers, it was back on the road again. Ljubljana was still a long way away and all thought of winding country roads were forgotten as we hurried to the motorway and turned left to Slovenia. The European Union has in recent years spent vast fortunes to improve the infrastructure of the old Eastern Bloc and it was a pleasure to hurtle down the new A5 and the A1, through what quickly became very beautiful countryside. After the Hungarian plains this was dramatic countryside with barely any cars on the road. Despite the best efforts of Fernanda Alonso we finally left the Ulysse behind and were able to enjoy a sunny late afternoon at high speed. The only dramas being dodging chunks of tyres which had been thrown off by lumbering trucks.

The Ferraris certainly eat road when you need them to, although Gianvito played his role as policeman and made sure that we did not break too many rules. We went from Murska Sobota in the east to Maribor in the valley of the Drava and then through the undulating Posavsko hills to the Sava River and the capital city of Slovenia, Ljubljana.

Set under an old medieval castle this is one of the undiscovered gems of Europe. As soon as we saw the city on our way to dinner that evening we all found ourselves asking the same question: why don’t we know about this place?

Ljubljana has an extraordinary mix of architectural styles, mainly because of major earthquakes in 1511 and 1895 when meant large scale rebuilding. And so the baroque meets art nouveau and it works. It is a spectacular and lively city which we all concluded was worth another visit. The evening was spent at the Valvas’Or restaurant in the old town where the owners were desperate that we try the local wines. A delightful way to end a busy day.

Mayra was keen to make sure that we were not too weary after a busy Grand Prix weekend and a day of heavy driving but we were all buzzing as we headed back to the chic A Hotel, on the southern edge of the city.

Day Two of our adventure was going to involve a lot of miles as well and so there was not much hanging about in the morning. We were soon on our way out of Ljubljana and on the road again.

The entertainment for the morning consisted of a quick blast down the motorway before we took to the back roads again and climbed through the hills to a place called Predjamski Grad, a medieval castle built on the front of a vast cave, halfway up a 123m cliff. This is not the kind of place that is captured overnight, unless you knew the secret way in through the network of caves behind the castle.

The home of a celebrated robber baron – a Slovenian version of Robin Hood – it survived all manner of adventures and was rebuilt several times over the centuries, ending up looking as though it should be used in adventure movies as a sinister headquarters for some Dr Evil or other. Now a museum, it provided a perfect backdrop for Lorenzo to go to work again and as we toured the castle he went off in the local countryside with each of us in turn so that we would all have pictures of us driving the cars.

Once the snapping was done it was time to move on. A stop for lunch was planned in Trieste, Italy, and that meant more motorway down to the border and then through the city to a restaurant overlooking the Habsburg Palace at Miramare. It was immediately obvious once we were in Italy that a Ferrari in the western world has little of the same impact as one in the east. The locals seemed unimpressed. Perhaps they have seen too many of them and have become blasé. Who knows? We did not really care. It felt good to arrive at a place like the Hotel Riviera & Maximilian’s, overlooking the Gulf of Trieste and the castle. Built for Archduke Ferdinand Maximilian Joseph of Austria the palace was finished in 1860 but it was largely wasted on its creator as he decided it would be a great idea to go to Mexico and become an emperor. The result of this was that he executed by firing squad in Mexico and his fabulous palace ended up as a summer residence for the rest of the family (several of whom would also be shot) until after World War I when it became a museum.

From there it was onwards in the afternoon to Lake Garda where we paused at water’s edge for a break before turning south to Maranello, arriving in time to reluctantly hand over the keys of the cars and check into the Planet Hotel, opposite the Ferrari factory, and dinner with Santa Claus at the celebrated Montana Restaurant, next to the Fiorano race track.

The following morning we would tour the factory… A process only interrupted by BMW’s sudden decision to quit F1, which sent us all rushing for our computers. After lunch we headed off to Bologna Airport, having enjoyed a magnificent adventure.

Little did we know that the rush to get us off the premises was not about catching our flights, but rather because Michael Schumacher would appear an hour or so later to discuss returning to the F1 cockpit in place of the injured Massa…

Breaking up with the Ferrari California was something of a sad moment. Our relationship was brief but enjoyable. Alas, this girl was out of my league… But that does not stop you dreaming, does it?

Christmas is coming… Time to write to Santa.

A Formula 1 whodunnit?

The Ferrari team has made an idiosyncractic comment on the announcement from Toyota, suggesting that the ongoing departures from the sport are similar to the Agatha Christie whodunnit “Ten Little Indians” in which 10 people are found dead on an island – but no-one can work out who killed whom and why.

The implication is that someone is F1 is killing off teams and that the new operations are not the answer as they are weak and may not be on the grid at the start of next year or may not make it to the end of the 2010 season.

“In reality the steady trickle of desertion is more the result of a war against the big car manufacturers by those who managed the sport, than the effects of the economical that affected Formula 1 over the last years,” Ferrari says. “In Christie’s detective novel the guilty person is only discovered when everybody else is dead, one after the other.

“Do we want to wait until this happens or should we write Formula 1’s book with a different closing chapter?”

In the original story the murderer plans his own death to look like an accident, having exacted his revenge on all the other characters.

Ferrari seems to thinks that the F1 “murderer” is not intending to die with the others.

Whodunnit?

Is Formula 1 dying?

I have seen on the Internet today people suggesting that Formula 1 is dying because of the departure of the car manufacturers. This is alarmist tosh. The sport has long been affected by boom and bust cycles: manufacturers come and go depending on the economic situation at any given time and on how each car maker is doing on the race track. Losers do not stay losers for long: they either improve or they get out. Formula 1 in recent years has become so big that the image of innovation and technology has reflected on all those involved, whether they are winning or not. And the global coverage is such that it has remained attractive. However, when a car company really makes a mess of things: as Ford did with Jaguar Racing or Peugeot did as an engine supplier, then their commitment quickly withers and dies.

Manufacturers never really consider what is best for a championship. They do not care. They use the sport and depart when it is no longer useful to them. They are solely interested in what is best for them. Their involvement generally escalates costs and increases pressure on the teams to perform. The additional money flowing around the sport attracts people who not really racing people and the result is that dealings become more ruthless and thus there are more scandals. However the current economic crisis is on such a scale that it is impossible for the unsuccessful to go on justifying their involvement.

Formula 1 is going going through the bust phase of the cycle as manufacturers that are not doing well or cannot really afford the sport get out. Not everyone can be successful and, generally, manufacturer involvement at such times drops to one or two companies. This creates new opportunities for others and so the process of rebuilding starts again: new manufacturers arrive, or teams become manufacturers, and costs start to rise again. Attempts have been made to keep manufacturers by restricting development (the NASCAR model is the best example of this) and it will be interesting to see whether the Americans will be able to hold on to the four manufacturers involved: Ford, GM, Chrysler and Toyota. All have problems but at the moment are hanging on in there.

The most dangerous part of the boom-and-bust cycle is not actually the bust phase, but rather when the manufacturers are escalating the costs. That is when the pressure is intense on the smaller private teams, which find it tough to compete. The recession of 1991 wiped out many of the small F1 teams that had entered the sport in 1989 when the rules were changed. However the Concorde Agreement gave the successful teams stability and they all grew. As the costs went up so manufacturers began to buy into teams to protect their investment. That was when F1 was at its most vulnerable. We have seen that phase typified by the fortunes of the Williams team. Without manufacturer support the team has struggled to win. The FIA’s cost-cutting strategies and its encouragement for small new teams means that despite the manufacturers getting out, there are still 13 teams on the grid (at the moment).

Costs are going to come down, if only because they must.

It is not just Formula 1 that has suffered from these boom and bust cycles: the same has happened in sports cars and in touring cars and to a lesser extent in rallying as well. And it is not just as international level. It happens too in national competition such as the British Touring Car Championship. With F1 it is a balancing act between keeping the high technology image and high levels of coverage while also keeping the costs under control.

In the final analysis, Formula 1 is fine. Losing a few manufacturers is not the end of the world. If the teams are smart they will understand that unity between themselves is the key to power. If they allow themselves to be divided then they will be conquered. If they stay united then ultimately they will be able to force the promoters to share more of the profits generated and thus will be able to build a more stable long-term future. The manufacturers have showed that they cannot be relied upon in these matters…

Renault ponders, FIA concerned

Renault is understood to have called a meeting today to discuss its future in Formula 1, following the decision that Toyota is withdrawing from the sport with immediate effect. Renault has more of a history in the sport than Toyota and is keen to make an impression in markets where F1 is growing. However this year’s scandal has made it tough for the French company to find sponsorship for next year. However to pull out now would require the payment of penalties to the other signatories of the Concorde Agreement and it makes little sense to pay out large sums and achieve nothing rather than staying on and perhaps selling shares in the team in order to raise a budget for 2010. Renault’s position as an engine supplier is even stronger as Red Bull Racing has done a terrific job this year and is likely to be strong again next year so sticking with the team would be a logical move. The engine programme is not enormously expensive these days. Renault’s financial situation is not as bad as Toyota with the company announcing that it has revenues of $12bn in the third quarter, down 11% on last year. Sales have actually risen because of the scrappage schemes that the French government has funded and smaller less expensive cars are selling well.

The FIA has put out a statement this evening saying that the withdrawal of Toyota and Bridgestone are “of concern”. The FIA says that it is seeking “urgent clarification” about the Toyota team’s legal position as it will have a direct bearing on the 13th entry.

The federation says that it will now work “to ensure that Toyota’s departure is managed in the best interests of the championship and will continue to encourage the F1 teams to undertake the necessary cost-cutting measures for the good of the sport”.

FOTA disappointed by Toyota (aren’t we all…)

The Formula One Teams Association has expressed sadness at the unexpected decision by Toyota to withdraw from Formula 1, saying that the Japanese company “made a significant contribution to the success of Formula 1 for the past eight seasons”.

FOTA said that “the particular financial pressures within the car manufacturing industry – together with a period of uncertainty and unnecessary confrontation in F1 – that is now finally over – created conditions which have made it difficult for Toyota to stay in the sport”.

FOTA added that “every effort must be made by the sport’s management to ensure that the 2010 season is as successful as we all hope. These efforts should include ensuring that the 2010 grid remains fully subscribed – and we should remember that there are still more teams entered than in any year since 1995 – that our sport remains a focus for technological innovation and competitive racing”.

FOTA also noted and thanked John Howett for his efforts on behalf of the team organization, of which he the vice-chairman.

Why?

Toyota signed a contract a few months ago to stay in Formula 1 until the end of 2012. The decision made to quit F1 immediately underlines the fundamental reality that no automobile manufacturer can be trusted to abide by any commitments made in the sport, as it is a sideshow and if their core business requires a change of direction they will walk away at the drop of a hat. It is the second time in three months that this has happened as BMW made a similar decision having sworn blind up until the last minute that there was no intention of leaving the sport. In the case of BMW the company did not make the commitment to the Concorde Agreement and then renege on it, but instead put the F1 team into a state of limbo by refusing to make any commitment. The good news is that one manufacturer’s whim has helped to solve the problems created by another. That will not help the people in Cologne, some of whom have been with the company since Ove Andersson set it up back in 1979. Andersson died in a road accident in the summer of 2008 and in many ways it is a blessing that he is not around to see what has happened to his team.

I believe that if the team had been left in his hands things might have improved, but he was forced to retire because of Toyota company regulations and those who took over from him were not of the same calibre. Ove’s one fault was to give his engineering staff too much freedom: this caught the team out in the 1990s when it was caught cheating in the WRC; and happened again in 2004 when it was found that Ferrari data had been used in Cologne.

The story of the F1 programme dates back to the late 1990s when Toyota announced a plan to enter F1 in 2001. This had to be delayed but the first race came in 2002 with Mika Salo and Allan McNish driving. Things kicked off well with Salo scoring a point on the team’s debut in Australia, but the season ended with only two points scored and 10th place in the Constructors’ Championship. Salo and McNish were replaced in 2003 by Olivier Panis and Cristiano da Matta and they collected points on seven occasions (the best finish being fifth place) and the team finished eighth overall. That performance was repeated in 2004, although the second year was spoiled by the espionage claims that the TF104 looked rather too like the Ferrari F2003-GA for comfort.

Andersson had by that point decided that the way forward was to use an aggressive F1 designer rather than using the traditional Toyota methods of committee meetings and non-confrontation. Unfortunately Andersson retired and Gascoyne was unprotected when he ruffled too many feathers. The results, however, improved in 2005 with Jarno Trulli collecting two second places an a third and Ralf Schumacher two thirds. As a result the team ended up fourth in the Constructors’ Championship. With Gascoyne pushed out of the team early in 2006 the success waned with one podium that year and sixth in the Constructors’ race, and 2007 resulted in the same overall result but no podium finishes. There was a rethink in 2008 with Timo Glock replacing Schumacher. Jarno was third in France and Timo second in Hungary and the team finished the year fifth overall, an achievement which was matched this year, largely due to the double diffuser which helped the team score well in the early races before the rival teams caught up.

Why has Toyota quit? It seems to be that the numbers are the key. In the 2008 fiscal year Toyota lost $4.74bn, its first operating loss since 1937. This year the company is predicting a loss of $8.3bn. The F1 team has achieved little in terms of results, perhaps it has helped the image of Toyota but there are now more important things to worry about.

End of story.