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…