In the last few days there has been an explosion of news about the Mercedes F1 Team, with the suggestion being that there will be a complete shake-up of the top management and that perhaps even Ross Brawn and Nick Fry will be axed. Fry has been with the team since 2002 when it was called British American Racing and was being run by David Richards, following the departure of founder Craig Pollock. Fry was MD while also running Prodrive, but in 2004 Honda bought into the team, Richards departed and Fry took over. The Honda period was not a great success and it was decided in 2008 to bring in Ross Brawn as Team Principal. He, Fry and several others then became the owners of the team when Honda quit in 2009. Ironically the team then won the World Championship with Jenson Button and that led to Mercedes buying the organisation at the end of that year. This made the partners very wealthy, but they stayed on with Brawn as Team Principal and Fry as CEO. Three years on, the team may have grown a lot, but the results have been poor and as a result of this Mercedes-Benz motorsport boss Norbert Haug has been axed, indicating that the bosses in Germany are not happy with the way things have been going. The appointment of Niki Lauda as the non-executive chairman was seen as an odd move, as Lauda’s previous efforts running teams have not been very successful.
One should remember that the departure of Haug came after several months in which there were rumours that Mercedes might give up being a team-owner and return to being simply an engine supplier, as was the case between 1992 and 2010 (although the first couple of years saw the company hiding behind Ilmor and Sauber badges). This policy was pretty successful with McLaren-Mercedes winning several World Championships and being a consistent frontrunner. However, there was always the ambition to recreate the glory days of Mercedes in Grand Prix racing with the “Silver Arrows” and when the opportunity arose to buy Brawn, the board in Stuttgart agreed to jump in and set about unstitching its agreement with McLaren. That enthusiasm has waned as the team has gone backwards, dropping from 214 points in 2010, to 165 in 2011 and 142 in 2012. The Stuttgart company understands that F1 is very good for its image and marketing, but it wants to be winning. If that does not happen, the chances are that it will pull back, although it does not want to be seen to be departing in defeat. Thus, just as the firm entered the sport surreptitiously in the early 1990s, any exit would be best achieved in the same way.
It was interesting to note that last year the name of the team was changed from Mercedes GP Petronas F1 Team to Mercedes-AMG Petronas F1 Team. AMG is the high-performance vehicle-maker of the Mercedes group, which was acquired from its founder Hans-Werner Aufrecht in 1999. At that time it was agreed that AMG’s motor racing department would be transferred into a new company called HWA (Aufrecht’s initials). Aufrecht sold his remaining shares of AMG to Mercedes in 2005 and the following year he went to the stock exchange and floated 17 percent of HWA, while also bringing in outside investors, namely Qatar’s Nasser Bin Khaled (NBK) Holding, plus two private investment companies Dorflinger Privatstiftung (15 percent) and MarchSixteen Finance, the latter belonging to Toto Wolff (12 percent). Aufrecht kept 28 percent and so Wolff, Dorflinger and Aufrecht still controlled a majority of the business.
It should be remembered that there was some interest at HWA in creating an F1 team at that time, with the company looking at Buying Scuderia Toro Rosso, with the aim being to use customer McLarens. That did not happen, but Wolff’s F1 ambitions popped up again when he acquired a shareholding in Williams, as part of a plan to float the Grove team. There have long been rumours that Wolff was acting as a front man for Dorflinger and Aufrecht, although there is not much evidence to back this up.
The interesting thing about the deal for Wolff and Niki Lauda to buy “a significant minority interest” in Mercedes Grand Prix Ltd is that this has not actually occurred as all that has been announced is that a letter if intent has been signed. This means that there is an intention to complete the deal but no money has changed hands.
My gut feeling is that Mercedes is preparing the way for a possible departure as a team owner, if things do not improve. It is easier to slip the team into HWA ownership (seen as safe hands in Stuttgart) without it being seen as a retreat, as the company could probably justify this on the grounds of some convoluted form of compliance as a listed company. If the team is successful then Mercedes can take the glory. This prudent twin strategy will win Mercedes boss Dieter Zetsche friends in the company as he is still in the process of trying to make sure he gets reappointed to the top job until the end of 2018. There is a meeting to decide this on February 6.
Either way, he is now covered and the plan is to find a way to make the team competitive. Since Mercedes took over it has been hoovering up talent in F1 and at one point had five former technical directors on its books: Brawn, Bob Bell, Aldo Costa, Geoff Willis and Loic Bigois. Adding Paddy Lowe would be simply adding to the belief that the team has more cooks than it has bottle washers, and it would be logical to assume that some of those mentioned would be on their bikes. The real question, however, is whether the Lowe deal will go ahead.
And this is where things get interesting as the first approach by Toto Wolff to Lowe was in September when he was trying to lure Lowe to Williams, in his role as Executive Director of that team. Do not forget that Lowe began his career at Williams back in 1987. He stayed with the team until 1993 when he was poached by McLaren to be the team’s Head of Research and Development. That deal seems to have been agreed, but when Wolff moved to Mercedes he decided it might be better to take Lowe with him to Mercedes instead, thus knocking a few noses out of joint at Williams. It is not clear if any of these deals have actually been signed or whether Lowe will end up staying at McLaren. Unless Lowe’s contract has run out at Woking, he will need to spend six months on “gardening leave” before he can join either Williams or Mercedes.
At the moment no-one is confirming anything, perhaps because they are still trying to sort it all out…
joeblogsf1 
Great article, thanks Joe.
Joe, do you accept Schumacher’s reason for Merc’s failure as a funding shortfall?While all these fireworks are going off, are Toto and the board of one mind as to why the Brawn/Haug years were unsuccessful?
I would like to hear Ross’s own assessment, I don’t think he has spoken yet on that subject
No. I think the car was not great and the driver too old.
Would it be true to say that the car initially was pretty good but they made the mistake of then developing it around the individual (and somewhat unconventional) preferences of the wrong driver?
If we assume the board members took the same view as yourself, that would explain the slightly messy exit of MS, who did not want to leave just yet. They may also feel Ross was simply indulging his old friend, hence a plan for his exit also.
btw does Paddy speak German? A crash course in february might stand him in good stead for when the conversations take a ‘non-inclusive’ flavour
Can’t help thinking that like Lewis’s move it would be a mistake.
The way things are going Merc may end up with less good people if they are all hacked off by the plethora of new bosses all claiming to be in charge and not knowing the people in the team they are managing. Ross could perhaps tell them where to stick their job. I do wonder what Lewis’s contract says re the people he would be working with. Jensen must be having a quiet chuckle.
The way it’s going they may be calling it …McLaren!
What a great article! ironically it’s a little bit like the Eurozone where the creators don’t want to admit that they were wrong in the first place but at least in the case of MB they are looking for a way to quietly tiptoe away if the project doesn’t work. No pressure then Lewis or Ross.
With the exception of Ferrari (which is hardly a conventional motor manufacturer) none of the other manufacturer teams seem to have worked – and none of MB’s market rivals are involved in F1 at the moment.
Of course on the engine front it’s a completely different proposition – with most of the motor manufacturers (well that’s the name on the engine anyway) having done a brilliant job at times with MB, Renault, and Ferrari dominating currently – and in truth isn’t that the only bit of F1 that crosses over into their consumer operations anyway?
I guess the thing is the manufacturers have done what they’ve always done best – build a number of standard parts (in this case, an engine) in a reliable and (relatively) cost effective fashion.
Building a competitive F1 car is a totally different beast – it needs to be both radical and reactive to competitors, something leviathan corporate structures are usually not very good at doing. Ferrari are better than most because they’re small and geared around F1, but otherwise it all boils down to money and furthering the brand image – the corporate culture basically ‘wants’ to spend to win and hope it gets a bit of perpetual motion behind it (like Red Bull currently have).
Joe
If Paddy Lowe were to go to Williams, how would he fit in their structure? A replacement for Mark Gillan perhaps?
If Gillan knew, or thought he knew, that Lowe was on his way to Williams, could that be the real reason for his, i.e. Gillan’s, recent departure?
Martin
Mark Gillan and Paddy Lowe have hugely different skill sets.
Thanks RMM, that puts that theory to bed.
Martin
Martin Whitmarsh seems to be a little clumsy handling his teams’s personnel at the moment.
or maybe he’s been so good that a lot of people have grown to be as good as to outgrow the team!
McLaren can’t control if a team member gets a better offer elsewhere. It only gets messy if its proven that they’re improperly poached and its often mitigated with gardening leave.
You overlook non-poaching agreements that exist between teams.
wow, didn’t realize this sort of thing existes in F1!
The Wolff doesn’t appear to be making any friends with his rather inelegant handling of this affair.
Has Wolff actually done anything? It’s all media speculation at this point.
Yes. He has got a new job.
Would he have actively campaigned for this job or did the Merc board simply offer it to several including him and he won out?
Thanks for the back story Joe, I knew you had the nitty gritty and I was waiting for you to share it with us. We love you!
Thanks Joe, as always the depth of your knowledge and experience shine through while others just churn the same old rumours. As for Mercedes, I can’t imagine that appearing to be uncertain of their future involvement while massively changing their internal structure can be a solid foundation for 2013. I hope they don’t just end up with lots of people shouting at each other about how to make the car faster without actually managing to do so, that would be a shame.
Outstanding analysis. Thank you.
The BBC are reporting that Mercedes “initial contact with Lowe pre-dated Wolff’s involvement”, all sounds a bit complicated to me. The internecine world of F1 continues to fascinate though.
If Brawn is on his way out, what do you think he will do next Joe? It seems to me the options are; Fishing, a role with another team, or swap places with Toto at Williams. he has the cash..
And wouldn’t Ross at Williams be interesting…
Didn’t he start out at Williams way back when?
As a machinist, I think. He was a fast learner.
(Though I think his first motor racing job was at March).
You are talking Brawn.
Yes.
Wonder what Lewis is thinking about this???
Well either he knew in advance that some or all of it was going to happen, and is just waiting for the heap of bricks to settle (dust is too insubstantial here) before emerging into the setup he had expected:
OR he is wondering what the heck his people (XIX) have done to him and will the number of people in charge ever fall low enough for decisions to be made and a car built. Come to think of it, the car must be nearly ready now, so all these new people had nothing to do with it.
Then if the car is good, the team structure that built it will not be in charge of it.
Well best of luck Lewis, you are most certainly going to need it.
His job is no more difficult now than it was when he signed. He was and is still joining an uncompetitive team. The changes if anything offer a ray of hope.
He’s busy thinking about merchandising and building his franchise instead of racing. But if the young gun wants to take a shot at the Brass ring its his prerogative. If it pans out we’ll all be singing his praises and he will look very astute. Aren’t the young supposed to take chances?
Great article Joe. Maybe Mercedes and Mclaren could do a straight swap – Lowe for Brawn!
Hi Joe ,
did n’t Ross brawn make a comment when he sold brawn that he did not want to do a bernie and that he wanted retire at 60? If so could this just be a natural succession plan?
I was hoping someone would pick this up, I was sure that I heard in an interview with the BBC ablut him wanting to retire, as there has been questions on his commitment to the team well before the lewis story broke.
Great article as usual Joe, very interesting to hear a bit of Toto’s back story, it appears he has almost run out of fingers to stick into pies, possibly spreading himself too thinly?
Merc are becoming the Real Madrid of F1 buying in all the best players but in between the greats you need the grafters to do the lag work. These big names can’t do it alone, they need to be able to motivate their respected departments. It is easy to see Merc’s logic behind pretty much all the changes except 1, Niki Lauda! What does this guy bring to the table apart from a destabilizing effect and a loose mouth. Would be interested on your take about this issue Joe, as I’m at a loss.
Joe, off topic, but have you been following the David Piper vs Mark Hales legal issues? Any thoughts?
No I have not.
http://jalopnik.com/5977720/auto-journalist-sued-for-174000-for-blowing-a-porsche-engine?tag=car-crime
Interesting times, it all seems a little strange that these kind of big moves are happening towards the beggining of the season rather than the end of it. I would imagine that the timing of these appointments will diminish their effect on the 2013 car, at least on the fist half of the season, since the new siver arrow must be in the latter stages of development.
Again, more ammo to atack the 2014 season all guns blazing?
More than likely. They want any legal/gardening leave cleared in time to properly start work on the 2014 cars around summer.
They’re already going great guns on the 2014 project, as everyone is, so ti will be interesting to see if this has any effect. On a side note, I wonder how long it will be before Suzi Wolff is at the wheel of the Merc!
I have often said that a successful F1 team needs to be, essentially, a dictatorship with one man driving everything forward. Every car manufacturer of recent years (Toyota, Honda, Jaguar, Mercedes etc) has had a team that seems to be run by committee – the exception being the WCC winning Renault team that was, essentially, Bennetton under Flavio (did you know that since 1958 – yes, after Mercedes stopped racing – only two teams who manufactured cars before entering F1 have won anything, Renault and Matra)
Mercedes seem to have too many in charge, they are doomed to failure as constructors, which is a shame as they, like Renault, have built some great engines over the years. Lewis may grab a win or two but will never be WDC at Mercedes and they will never win WCC unless they change their approach to running an F1 team.
Isn’t that what they doing? Wolff is in charge and Lowe will be lead designer. That seems like it would be normal.
That depends a bit on what role Lauda ends up playing.
But the ambiguity of authority between Horner and Marko doesn’t seem to hurt too much (to my great surprise).,.
Excellent article as always. On a related note do you have any insight into the story / rumour that Horner has recently been to Maranello a couple of times for meetings with Ferrari.
I suspect these would be team meetings. I cannot imagine Red Bull splitting with Renault.
Two leading teams who cut an early, separate deal with Bernie?
Or Christian has finally got fed up of taking orders from Helmut and is punting for Stefano’s job. OK Joe, I’ll save you the trouble – tosh!
Well said.
Ross Brawn has made his career from maximising interpretation of new regulations. New regs for 2014 would be right up his path, maybe he is to focus on that for Mercedes
Fantastic post, thank you.
I had thought that Wolff had flatly denied any plan had existed to bring Lowe to Williams – at the same time he was ‘no commenting’ the Lowe to Merc story. So that’s wrong? Or he said something that sounded like that but wasn’t?
Still digesting this. Wow..
Hi Joe, first time commenter but, I hope you are getting paid for pushing an American product. ” hoovering up ”
Love your ‘blog’ btw and read it with relish.
Its clear that Mr Lowe is tired of playing second fiddle at McLaren and is looking for a position commensurate with his abilities. It would be easier all round if the less than ambitious, some would say ‘loser’ Mr Whitmarsh stepped aside and let Mr Lowe takeover and get the Mclaren show back on track.
That leaves Mr Brawn to stay put and sort out the mess that is Mercedes, sorted.
The pair have completely different roles and completely different skills. You cannot compare them.
The problem Mercedes is facing comes down to the fact that they seem to have expected (relatively) instant success. The days of the Silver Arrows are long gone and motor sport is a whole different world. When Tazio Nuevolari and Rudi Carraciola were dominating European Grand Prix events, the German teams benefited from having an enormous financial advantage over their opposition. For the most part, motor racing teams until the 60s operated with tiny budgets compared to what they are able to access today. When Mercedes first entered Grand Prix racing, they had backing from the German government whilst virtually all other teams were only able to spend what they could bring in from sales of their own vehicles. Their only substantial rival was Alfa Romeo, who never seemed to know if they were coming or going at the time. Even when they came into Formula One in 1954, they still had superior resources and information from what they had gathered in the 16 years since their last Grand Prix entry.
Jumping ahead to the present, Mercedes’s financial advantage has disappeared. Their engineering is nothing overwhelmingly different to their comp
etition and their rivals are aeons more professional and experienced. When you’re not winning in Formula One, it becomes a costly game to play and they’re feeling that right now.
What the directors in Stuttgart need is patience. Rarely do teams enter Formula One and immediate ly rise to the top. Most manufacturers eventually get their break – they just need to be prepared to act rationally and not make any knee-jerk reactions that will damage the confidence of the squad.
Of course the team, as opposed to the branding, isn’t really new at all. Technically it links back to the Tyrrell team (first entered F1 in 1968), but more realistically it started in 1999 as BAR. Mercedes bought a race-winning, world champion team…
+1
They were not however willing to fund it at a level sufficient for the consistent level of competitiveness that they demanded. And at the point they took over it had been starved of cash to the point it was shedding engineers to stay solvent.
I was not suggesting the skills sets were comparable, merely that Mr Lowe
appears to have ambitions beyond those he is able to achieve at Mclaren under the current set up. I see no logic in moving to Mercedes to take up the role he currenty holds at McLaren, unless of course it had something to do with team principal or whatever euphemism they eventually attach to his title,should he end up moving. You seem to be inferring that a technical director not capable of becoming principal.
Even if Whitmarsh were to step aside for Lowe to become Team Principal of McLaren they would still need to get a new Technical Director.
McLaren want Lowe as Technical Director, if he wants to become a Team Principal he would have to go elsewhere. And with him not being much younger than Whitmarsh he likely wouldn’t follow in the succession plan (which is where Sam Michael probably fits).
If the rumours of him considering a move are true I’d expect McLaren to strengthen their technical management team even if Lowe stays for now – to prepare for when the situation inevitably reoccurs.
McLaren will try and persuade him to stay (for now) and put plans in place for the future.
There are several ways to change one’s employment status. Get a better offer somewhere else. Get fired. Or make it too uncomfortable to stay. I wonder which category Brawn and Fry might fit in to?
You forgot retire…
Thanks for another great read Joe! So if Mr Lowe is indeed on his way out, who do you see as his replacement at McLaren?
As the “non Executive Chairman” what kind of power will Niki Lauda wield? Anything substantive, or will he just sit back and criticize-advise? Especially if he becomes a “substantial” minority share holder??
As you stated Joe, very odd.
“The appointment of Niki Lauda as the non-executive chairman was seen as an odd move, as Lauda’s previous efforts running teams have not been very successful.”
Great article, Joe. This Niki Lauder mention got my attention. I think Niki’s appointment was smart for a number of reasons;
– As a well respected figure in the world of F1 he can command attention in pretty much any quarter and is so well networked he can provide to management, especially in the absence of Norbert Haug, the detailed context in which the team is operating both in organizational and race performance terms.
– As a multiple F1 World Champion he can monitor and guide the relationships between driver and team in ways that would help address any future anomalies such as the recent one in which the prior winning combinations of Brawn and Schumacher failed so abysmally, alongside the demonstrated potential and consistency of the less experienced Nico Rosberg.
– Last but not least, Niki Lauder appears to call it like he sees it which is a quality not always seen in the higher echelons of F1.
In such ways, the “non-executive” part of his title makes perfect sense to me. Kudos to Mercedes management in making the selection!
Sorry Chris, my lasting memory of Lauda as a team adviser was at Jaguar where he stabbed Bobby Rahal in the back. Then went on to say with all of the driver’s aids a monkey could race a current F1 car; then went out in a Jag and spun out several times proving his less then simian capabilities.
The Rat was a great driver and a great champion with more cojones then most, but not one of my favs currently active in the sport.
I see him potentially causing more political tension within the team rather than solving problems. Waaaay too many chiefs in this current scenario.
Chris – you’re ignoring his past record as a manager in F1.
Mclaren will have Lowes departure covered.
Giorgio Ascanelli has similar skill set to Lowe and was pretty successful @ woking last time.
Didn’t GA quit at around the time Lowe was being courted by Totto (sept)?
I am not sure I see that happening.
But is a similar skill set to Paddy Lowe what McLaren need? (If they plan to keep a matrix management style of design. (A council of wise men* designing the car) are they going to catch the RB09?
* The cruel might call it a committee.
Fab article, Joe. I particularly liked the following exchange between you and one of the commentpersons:
Optimaximal:- Has Wolff actually done anything?
Mon Brave:- Yes. He has got a new job.
Brilliant article Joe. This demonstrates perfectly your point about proper F1 Journalists vs Internet trawlers.
Detailed article re Wolff but the title was a bit misleading. There is no more real story about Paddy Lowe here than in the BBC report.
Maybe that is because that is the real story and that is all there is.
so then this is the “real story of Toto Wolff” then. Don’t get me wrong because i like reading your blog but the title implies you can give more info re Lowe than other reports have but you don’t.
I don’t spend my life reading all the other websites. I leave that up to people who have time. If I had the same basic information as the BBC then Andrew B and I are on the same wavelength and have the same kind of sources. This is no great surprise as Andrew worked with me back in Autosport days, and I hope that I passed on good journalistic habits to him. I think he does a great job given the restraints that come with the BBC job. Obviously there are also advantages in his position, but that is true of all of our jobs, we all have to deal with things as best we can. What I wrote is the real story of what is happening – as best as I can discover it. Just because it was not as much as you wanted is not my problem.
Great article. As a colleague, who now lives in Shanghai, I was surprised to see that the sites that get blocked her are:Facebook, a lot of Google stuff and you.
Unless reouted via VPN, you can’t be read here…. What did you do to the p…. these people off?
Keep up the good work, Eltjo
I have noticed that in the past. Oh well, it all helps build business for the VPN companies.
Haha, nice pitch for Astrill: “Imagine the horror of being stuck in Shanghai without Facebook òr Joe Saward.”
Great article Joe – you always provide a great breakdown and insight into the current news stories