Gene Haas and Formula 1

Gene Haas is known as “a NASCAR team boss”, but that is only part of the story and one needs to look at his history to understand why he is now looking to running a team in Formula 1. The primary motivation is not necessarily sporting. Haas is not exactly struggling when it comes to money. The 61-year-old started a machine shop business in California in 1978 but soon realised that the equipment he was using was not very good and started designing his own CNC machines. Today that business turns over $1 billion a year and is expanding globally, particularly in Asia, where F1 is strong. Haas Automation has, therefore, a good business case for being involved in the sport. This is important in an age when F1 is wildly expensive. Being an F1 team is not enough.

When you look closely at the details of the plan that we have now, you might conclude that this has been Haas’s ambition for a while. He was lurking in the background when the stillborn USF1 team was on the cards. He supplied the team with equipment and knew team boss Ken Anderson well. If you dig around a bit, you discover that the Haas Racing Developments company was not established last week, but rather back in March 2010, just as USF1 was falling to pieces. The conclusion is that Haas was probably considering jumping in and taking over the USF1 operation before it became clear that there was nothing to take over.

The company has been dormant these last years, while Haas has enjoyed sporting success in NASCAR, in league with Tony Stewart. They won the Sprint Cup title in 2011 and today run one of the strongest teams in the sport with the 2014 line-up featuring Stewart (back from a broken leg in 2013 and hopefully still competitive), Kurt Busch, Kevin Harvick and Danica Patrick. Some don’t think Danica has what it takes, but the other three certainly do and Danica is a money-making machine. People do not criticise Rick Hendrick was keeping Dale Earnhardt Jr because he is popular, why then do they attack Stewart Haas Racing for having Danica onboard?

A little digging around also reveals that there is a lot of digging going on at the team’s workshops in Concord, North Carolina, a major construction project that will double the size of the factory to 24,000 sq m. If the team is running just four cars in the Sprint Cup then that is one and a half acres of workshop space per car… Room for expansion. Haas is also the owner of an F1-scale wind tunnel just around the corner from the workshops (Yes, really!). The Windshear facility opened in 2008 and is a 180-mph 100 perecnt rolling-road wind tunnel, the first of its kind in North America, and only the third rolling road wind tunnel of its scale in existence. Several F1 teams have been over to try it before the cost limitations began. It is a world-class facility.

People may ask why someone with all of this would do a deal to have Dallara build him a chassis. The answer is probably very simple. Speed is essential in order to get hold of one of the precious F1 entries and after that has been achieved the team can be rolled out over a period of time, allowing an organisation to come together in a more sensible fashion. It is a lot cheaper than buying an existing franchise that is worth having.

The team would obviously still need a European base of some kind, as eight of the 19 races can still be done with transporters, rather than using air freight. Using Gunther Steiner is not a bad idea as he knows not only the composite markets of Charlotte but also has a grasp of what F1 is all about and why it is different to other racing championships. That is important because too many new team owners fail because they do not listen to people who know what they are talking about, or listen to the wrong people.

It would be great to see a proper American F1 team in operation and if anyone can do it, it is Haas.

76 thoughts on “Gene Haas and Formula 1

      1. What about Briatore, Couglan and Stepney? Should they come back? Im not saying they shouldnt by the way, just wondering what everyone thinks 🙂

        On a related note Joe do you think Haas would really help make F1 better known in the US? All its got at the minute is Austin. New Jersey isnt a good advert and Rush didnt even get a single Oscar nom. Doesnt say much about there being much love for F1 in America. I thought Rush was waaaaaay too formulaic but I expected voters to like that 🙂

          1. They are the most high profile voice. Oh and a spent conviction is a spent conviction whether it is for assault with glass or shady accounting.

      2. No it isn’t, that’s why we have criminal records not just a current register of who’s in prison or who owes fines.

          1. Too right Joe! I know I’d much rather have a guy who did some shady accounting round my house than someone who attacked someone with a shard of glass! He’s not the first nor the last to probably take some bad decisions and/or advice in the minefield that is taxation!

            Very excited about this entry, looks like a serious serious effort at F1. Not since Toyota have we seen a team entering with that sort of facility from day 0.

        1. I’d like to see who here making the comments who have never falsified their tax return ever. People can be amazingly short sighted when it comes to themselves.

  1. “… People do not criticise Rick Hendrick was keeping Dale Earnhardt Jr because he is popular, why then do they attack Stewart Haas Racing for having Danica onboard?”

    I couldn’t agree more. While she’s yet to win one, she’s certainly shown herself to be a competent mid-pack runner deserving of her seat. And, as you noted, she’s a money machine. And imagine if she ever does win one … well, North Carolina might explode.

  2. Hi Joe, I just wanted to say that this post is exactly why I and so many others read your blog – to get really insightful comment and analysis of F1 news. I really appreciate it!

  3. I suppose Lola is the only alternative to Dallara but I don’t know how much of their design facilities were left after the insolvency and reconstitution. To be blunt neither Dallara nor Lola have a good recent track record in F1. It would be easy for any new organisation to lose all credibility by turning up with a hopeless dog of a car.

    Wilson

    1. If Dallara is properly paid, and given good designs to work from, I see no reason why they can’t produce a good chassis.

  4. Of course, there are people walking around in NASCAR who have opinions that are counter.

    First, yes, Haas makes a helluva CNC machine. Yes, Haas has been around NASCAR for a while, and with Tony Stewart, has seen success.

    However, some of us remember the Haas team back when they were low-budget, hiring low-budget drivers and scant crews (one of his crew chiefs remarked to me, “Hendrick has more engineers than I’ve got crew members!”).

    As is well documented, Gene had an “aha” moment in prison (a few weeks for tax matters) and decided to go for broke. His first gambit was to give Tony Stewart half of the company, which addressed two issues — he gained 2 good driver (Ryan Newman came along), and was no longer seen as a NASCAR outsider. AS it also turned out, Tony is a fine businessman too.

    So, if what you say about lavish facilities and grand dreams is true — and I don’t doubt you — then my quibble is about who is responsible, since Tony Stewart has been half of the operation since those dark days I mentioned. The second is to suggest, nicely, that F1 pointy-nose guys realize that while the NASCAR vehicles are tube-frame deals, there is an incredible amount of tech, and not inconsequential brainpower, used to massage those things. And third, to suggest that a Dallara relationship might suggest a return of Tony to Indy. Recall that Tony’s hero is AJ Foyt, who has been a team owner now for some years.

    If F1 is in their future, Tony Stewart is certainly part of that decision, and will be key to its success. I hope that Americans will eventually break into F1, but let’s face it — between failed drivers, failed teams, and failed venues, not to mention continued low fan numbers (low by comparison to any number of other sports, not to mention South American/European standards) and the refusal of most governments to pay tax money to F1 — it might not happen in our lifetimes.

      1. That’s a good question. Stewart was reportedly blindsided by the hiring of Busch. Stewart seems similarly blindsided, and not a bit on board with these F1 plans.

        It’s hard to believe Stewart is currently a co-equal partner.

      2. I’m pretty sure it’s a 50/50 deal. And 24,000 sqm is fairly normal for a NASCAR team. NASCAR teams run different cars each week (compared to F1 teams that use the same car and move it around) so a four car team has probably 60-80 cars, when you consider all of the testing. It is more like a factory, with new cars continuously being built. It needs a lot of room.

    1. So, your argument is that Haas achieved success quickly? “Some of us remember the Haas team back when they were low-budget, hiring low-budget drivers and scant crews…”

      That did not last long did it? Debut in 2009. Championship in 2011? Sounds like a man who knows how to get stuff done.

      1. Strangely, I recall standing outside the Haas hauler long before 2009. Strangely, I recall talking with the NASCAR gossips about how Haas didn’t put the money into this operation to be competitive long before 2009. I recall being there. ‘Cause Haas got into the game in 2002. 2002-2009 would’ve been some of the years I was there.

        But hey, by trusting my fading memory of where I’ve been and what I’ve done I might be humiliated by posters online…

        1. Sorry, for some reason I was thinking that we were discussing Haas-Stewart (since your post ended with the bit about Stewart).

          In any case, you got to start at the bottom to work your way to the top. Clearly, your gripe about him not running a professional race team is not quite relevant in 2014. 2002 is history, which was my overall point.

  5. It looks like Gene Hass is serious about an F1 attempt. He seems to be starting his operation from scratch. I believed the advantage of taking over an existing F1 team was its staff and existing infrastructure along with the entry.

    Anybody who has taken over an existing operation has usually got up to speed faster than those have not. Besides the three new teams that entered a few years ago, another example was BAR as all they used of the Tyrrell operation was the name.

  6. I long have, and still believe that Rodger Penske is only American who could successfully launch and run a modern F1 team. But wisely, he mostly races with other peoples money which is a pretty thin wallet to draw from in the USA.

    Other than age, and his love for the Indy 500, I think the only reason he hasn’t given it another shot is that he is completely aware of what it would take to be successful in F1.

    1. Agreed.

      This only makes sense if Haas has a deep pocketed title sponsor.

      Funding an F1 team with one’s own corporate profits is fine for car companies and a singular drinks company. It would not seem sustainable for a CNC company, even one with 800 million in annual revenue.

      The title sponsors of each of the top teams have more net income than Haas Automation firm has gross revenue. Haas’ firm is big, but it’s not “F1 big”.

    2. Outstanding job Joe ! Thank you ! Many have tried with very little success. Perhaps Mr. Haas know a thing or two his predecessors didn’t. There lies a more positive hope for the future for Americans in F1.

    3. If he is aware of what it would take and chooses not to do it, then he is not the American we need. Besides resources, it takes determination and willingness to do it. I’d say that puts Haas above Penske, since he is the one who declared his interest to the FIA. Let’s be realistic, Penske would need to find folks outside of North Carolina to bring on board… so why does he have the advantage exactly? Haas will be the one who winds up hiring those individuals.

  7. Joe, the fact that Haas did nothing after the USF1 debacle is likely because there was no one to pay the bills. If a big sponsor had been in place and all that was wrong with USF1 was a lack of a finished pair of cars and management I would say he would have leapt. USF1 ran out of time and money. They never had a bib title sponsor in place.

    I suggest a title sponsor was found in the meantime and they are now ready to roll. Given the sheer level of facilities available to this team one can see why buying an existing F1 team is not considered a good move.

    If this is a build it and they will come “Field of Dreams” attempt for a title sponsor then it is extremely brave. If it relies on two or more USGP’s it is again brave… I suggest that it is an existing or new sponsor from the tech world, with a global ambition, that is footing the bills, so that the possible lack of more races in N. Am is not an issue, but if Atlantic City and west coast races happen, that is gravy for the deal but not a make or break.

    Existing relationships are always the most promising and GoDaddy fits the bill…… see http://www.godaddy.com/news/article/godaddy-targets-european-expansion-hires-emea-vice-president.aspx

    Expanding to Europe and globally out of North Am…. Could mean a season for Danica in F1! Especially now that low body mass is a key requirement with 2014 rules. If she could mind meld with Hulkenberg it might just work!

      1. The rule was reintroduced in 2011. Since then 32 drivers have found themselves in the position of not making the 107 percent limit. Only four were not allowed to race. The others were all allowed to compete.

        1. Good point. And if Danica were in an F1 car (which I doubt), she would be allowed to race no matter what her qualifying time.

  8. Joe, 1.5 acres per car is funny. One car operations in the lower series’ have 1.5 acres of shop too. NASCAR doesn’t limit you to cars used per season. Some teams can have as many as 10 cars per driver, a 4 driver team then has 40 cars sitting there in various stages of building. Stewart Haas Racing HAD to expand considering they want to be more in-house all the way around and added a 4 team this upcoming season.

  9. Joe, wasn’t it barely a month ago that you said any plans for a new team made no sense when so many existing teams were available for purchase?

    I agree with the Joe of a month ago more than the Joe of today. Lotus, Force India, Sauber, and not a few others could be had for less than Haas would likely need to invest in a home grown team.

    For me, this only makes sense if Haas has a deep pocketed title sponsor. Perhaps he does. But if he has a title sponsor, wouldn’t buying one of the existing teams make even more sense?

    1. If the equipment exists already then buying a team does not make sense. I am not convinced that it is logical to do it from scratch if you don’t have factory, wind tunnel and access to a racing cluster of expertise.

      1. A huge chunk of a modern F1 budget is CFD work. Perhaps the NASCAR teams have some limited CFD skills, but given their limits on aero modifications, it’s hard to see why it would be a core competence.

        As you point out, a European headquarters is still almost required. It may not be worth paying Sauber, Force India or Lotus money just to acquire a European HQ. But Caterham or Marussia money?

        1. Or Enstone. Or Toro Rosso…

          All that matters is that they can find a couple of hundred million consistently every year to fund it. Then a European (ideally British) base can be procured and top engineering people enticed. *IF* the money is there, everything else is possible with good direction and hard work.

          Previous entities have usually gone under due to total lack of funding, closely followed by poor decision makers in key roles.

          The difficult bit is not so much building the team, but having the money to do it and spending it wisely (ie not doing a Toyota and setting up in Cologne).

          It never ceases to amaze me though how daft smart people can be in underestimating the scale of F1 investment and running costs.

        2. The fact that NASCAR teams can make very small changes to the shapes of their cars means that they have to be very good at assessing the effects of those changes and at dreaming up ways of maximizing performance within the rules so CFD is important to NASCAR success.

  10. Joe, your reputation suggests that there is usually some truth to this story. However, given the state of the F1 teams at the moment, why would an entrepreneur not just buy a stake (or 100%) in a proven team? Lotus would be a prime candidate. The current junior teams have shown that starting from scratch is a difficult proposition. You have also frequently suggested that not being based in UK’s motorsport district makes it hard to attract talent.

  11. So much excitement and so many possibilities: an American team; a budget cap; new technical regulations; Ecclestone in court; more BRICA races; Dennis back (sort of); a new McLaren team principle and new title sponsor; two roosters in the Ferrari hen house; …
    I can’t remember a season starting with so much promise, and I hope that at least some of these events are realised and have an actual and positive effect on the sport.

    1. Hi Joe… It seems I’m gonna be in Melbourne for 13-17 March, will there be an evening with Joe at the first race of the season?

  12. i dont think Haas CNC machines are as well thought of in the business as his success may imply. from what ive read the reason they sell well is the price. as far as speed and quality it’s better to buy a higher end machine if you can afford it. the asians produce cheap machinery of low quality so im sure Haas is better than their in country machinery.i have a chinese lathe and mill and while it works it wont as long and as well as US built equipment, IE Bridgeport.and Southbend.

  13. So, he’s going into F1 to market his CNC machines in Asia? Seems hella expensive and ineffective way to advertise to me, but wth do I know.

    Call me crazy, but I don’t think a successful businessman would double their shop space for an F1 project before having even gained entry into F1. There has to be another explanation. Kinda like how the pit garages and paddock in Port Imperial are actually a parking ramp and private garages for rich folks taking the ferry. 😆

    IIRC, no 100% scale tunnel use is allowed, apart from 4 hours, in exchange for the straight line tests. Kinda makes the Windshear tunnel overkill for 60% testing, if it’s even/capable of being set up for that. I honestly don’t know if there’s a difference.

    If being HRT fast is needed to gain entry, then I think they can do better than Dallara, especially as there’s no tie in for Haas with using them.
    Besides, aren’t you the one who poo-pooed HRT for being based so far from England? Spain is a hell of a lot closer to England than the USA is. Just sayin…

    So they’re doubling their shop size here, in order to build F1 cars in the future, after having Dallara build them cars, provided they gain entry in F1… Plus they’d be buying/leasing space in Europe, buying transporters, plus I presume hiring European staff. Sounds expensive. Call me crazy, but if that’s his plan, then I think he’s listening to the wrong people.

    I agree that it would be great to see a REAL US effort in F1. There’s a lot of people here besides Haas that are capable of doing it. I just don’t think that it makes any sense to anyone. Maybe that’ll change in the future, if the powers that be in F1 decide to make it attractive to such an effort.

    I’d love to see a Ford powered Chassis from Charlotte. No Gov Motors, and no Fiat Chrysler please. Oh, and no Indy people either. They done wrecked enough… 😛

    Just my 2¢

      1. Joe —

        Negativity never build anything. Realism, tho, has saved embarrassment and more than a little money.

        My apologies, I now see that about every racing outlet has picked up this story. I bow to greatness. There is a reason I read your stuff.

        So let me list the reasons why this might not happen:

        1. Americans have been run out of F1 pretty consistently since Mario was a big deal. And Mario kinda sorta was Italian or something, so he passed the sniff test. And then there are the failed American F1 venues. Beyond that… Phil Hill? Let’s face it — more than a little ink on Yanks given the bum’s rush in my lifetime.

        2. Money. My imagination says that it takes an order of magnitude more money to run F1 than NASCAR. As in, Tony Stewart’s NASCAR team’s annual budget is roughly the catering budget at Ferrari (slight exaggeration perhaps). As I pointed out, prior to 2009, Haas was a low-budget team in NASCAR, and now I’m supposed to believe that he wants to spend, what, at least $US50 million or so to put his first car on the grid as a back marker, and the $US200 million or so to chase Red Bull? Haas is wealthy, but 3 years of F1 racing would leave his check book gasping for breath. (insert jokes about putting teddy bears on the cars here)

        3. Conflict of interest. My observation is that bad mojo happens when owners fund a race effort out of their own pocket while another car/team is funded by a sponsor. All goes well so long as the sponsored car does well, but let that fall off and what would be said by the paddock AND sponsors? “Well, he’s spending all of the money on them pointy-nosed cars!” I can see it coming, and with this group of chronically premenstrual NASCAR drivers, you can bet on it happening.

        1. It is going to be an upward battle for Haas. Luckily, he has witnessed quite closely the failure of a US attempt at F1. He should be well aware of what NOT to do, and what it takes. If you are aware of the mammoth costs, then so is he. The optimist counterpoints to your arguments:

          1. I’ll be fair; the USF1 project did not do us any huge favors… but F1 seems to be taking a greater interest in the US lately. They are hot for us right now, and they are trying to get American eyeballs on the TV sets. They know that we need something more than a single race in Austin. A car, and a driver would give the US a reason to watch more than just our home race. This is what is likely to give Haas the nod from the FIA over the other two entries. This is what the FIA NEEDS in order to leverage the US market in the way they would probably like. A driver would be even better… but if a constructer is knocking, they should probably answer.

          2.It is my understanding that Lord Hesketh was more in it for the fun (hence the teddy bears), and did not have a whole lot to get sponsors on the bandwagon. I could be way off since I did not have the pleasure of living that era, but that is just my understanding of Alexander’s racing motives. I doubt Haas would walk into this project thinking F1 is hardly more expensive than NASCAR. I also imagine he has a bit more going for him when it comes to landing sponsors. We shall see. Indeed, he did start out as a low budget NASCAR team pre-2009, which is something I overlooked on your post from yesterday. I do think he is in a bit of a better position now… and 2002 is 12 years ago.

          3. This is your assumption that he will be paying all on his own, out of his pocket, with no sponsors or partners. If this was the case, he would indeed be foolish… but I doubt that is the case.

          You make good points, but the optimist in me refuses to accept them. Not because I think you are wrong, but because I hope you are wrong.

  14. An American F1 Team based in America would – IMHO – generate traction and patriotic media coverage like never before. That 100 percent rolling road wind-tunnel is a huge investment – and must have been built with an eye to the future that might be just around the corner….science is science and the same the world over.

  15. Unless Haas has found a sponsor willing to put up at least $30m for 3 years, 18 months of which will be a ramp-up period, I cannot believe that this is a serious proposition. Setting up from scratch to create a remotely competitive team is going to consume at least $100m of cash before a wheel is turned. Not saying that the money is not there, but USF1 sure as hell could not get much of it…

    1. He is not really setting up completely from scratch though. I think he is serious. He is at least going to need to spend $130,000 to apply to even have the FIA consider it. Not much in the grand scheme of things, but certainly enough to make it serious.

  16. This sure is a long, roundabout way for Kyle Busch to finally get his F1 test 🙂

    Seriously… very exciting news. Haas has the chops to bring this team to the starting grid, properly financed, and not cutting thousands of corners. Maybe a US team finally stands a chance of success!

    Fingers crossed…

  17. “expanding globally, particularly in Asia, where F1 is strong”
    So strong, in fact, that both India and Korea got chopped from this year’s calendar?

        1. If you went to Shanghai and saw the number of people in the stands you would not make such ignorant comments. The circuit is built for something like 250,000 people and so there are bound to be seats that are not yet used. However the crowd in recent years has been impressive.

  18. “That is important because too many new team owners fail because they do not listen to people who know what they are talking about, or listen to the wrong people.”

    never a truer word said Sir 🙂

  19. Joe, for what it’s worth… I believe that Stewart Haas Racing continues to buy its engines and chassis from Hendrick Racing. They don’t build their own cars. I realize they plan to purchase a Dallara to start with but the path to building their own cars is going to be quite a challenge. I sincerely wish them luck.

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