I hear that the F1 Strategy Group meeting managed to get through a few points on their agenda yesterday, leaving about 20 undiscussed. It is good to see that the new streamlined decision-making body is working as well as the old system used to… I am of the opinion that this whole new system is fundamentally flawed and that before too long it will all fall apart, if only because the smart F1 teams will all now be asking serious European Commission-level lawyers whether or not the arrangements that exist are within the boundaries of the European Union competition law. If they are told that they are in trouble I would not be surprised if there was a race to get to Commission first because the competition people operate a very clever system under which the first member of an alleged cartel to confess gets to go unpunished, a system that is designed to rip unfair competition apart.
I may be wrong but I’ll bet there is a lot of legal advice being taken on the matter at the moment.
In the meantime it has come to light in company paperwork in Jersey that Ferrari and three other teams have the opportunity to get a shareholding in Formula One group in the future. The Delta Topco Ltd company (95136) agreed a special resolution a year ago that allowed for the creation of two new classes of redeemable ordinary shares known as LST Shares and Team Shares. LST (which means longest serving team) basically means Ferrari and there are three similar shares for other teams, in addition to the FIA’s share of the business. It is all there on paper, albeit hidden away in the back of beyond in St Helier.
The team principals the other day gave some hints about there being financial penalties if the members of the Strategy Group decided to quit the sport before 2020 but – inevitably – no-one was willing to say anything out loud. All the teams are committed to the championship but some are bound with financial penalties, which they believe give them more rights. The shares seem to be the rights they wanted.
What is clear amongst all this skullduggery is that no-one gives a toss about the small teams. This is not a smart approach because small teams can stir up all manner of trouble and, at the end of the day, the big teams need small teams to compete against if they want their achievements to look good. The teams should really know better, because several of them were small teams not so long ago and were simply fortunate that someone was able to pour endless streams of money into them which allowed them to be made successful. Money, of course, is not the only answer but if it is used sensibly then a team should be able to become a challenger if it does the right things. Williams is showing how it is done right now…
So what can be done? If the teams will not accept a cost cap and the FIA will not/cannot impose one, the best thing to do (apart from changing the FIA) is to find a way to slash the costs that are hurting the small teams. The manufacturers whinge and whine about it not being fair that they should foot the bills – even if they neglect to say that F1 budgets are nothing much in the overall scheme of things.
Well, here’s an idea to solve that problem. The big players in F1 are all sharing platforms with other automobile companies in order to cut R&D costs. It is the thing in the industry these days and they do not care because they believe the customer does not know. Mercedes, for example, has AMG and is sharing a platform with Infiniti and with Aston Martin. Renault has a string of brands that use the same platforms and technologies: Nissan, Infiniti, Dacia, Samsung and Nismo. Ferrari is part of the Fiat group and that means that it is linked to Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati, Ram Trucks, and SRT. Honda also has the Acura brand and uses Mugen too.
So if we need cheaper F1 engines what is wrong with these companies passing on their engines to their sister brands and allowing them to kick in some cash to buy their way into F1. In that way we could have a Red Bull-Nismo, a Williams-Astin Martin or a Sauber-Maserati competing against a Haas-Chrysler and a Lotus-AMG. Let’s be honest, here, how many members of the general public know which car company is owned by another car company? How many know that Porsche and Skoda are in the same group? Or that GM owns Cadillac? So F1 could very quickly expand in terms of manufacturers even without any new engines being built and each company could kick in moderate funding to be involved. That way the investment made could be spread between the car companies and they would still have cash to put into the teams to improve their performance. The law of diminishing returns means that the engines will, in any case, close up in terms of performance in the course of the next couple of years. The hard work is done. Such activities are absolutely in line with what the industry is doing at the moment.
An even more radical solution would be to what Tesla has recently done in the electric car industry and make all their technology open-source in order to spread the existing knowledge and allow other car manufacturers to join the development race – and in doing so strengthen the industry as a whole.
If only one of the F1 manufacturers was to make its engine technology available to all it would save newcomers having to go around buying up the people who know how to do it and thus get more people involved. The original players would still have the advantage, but the sport would be better off.
The latest wittering from some about changing the whole engine formula is plain stupid, as this would simply mean going back to engines that are not good any longer, or would add to the costs. F1 exists to highlight automotive technology and it could do that much more effectively than it already does. And that would benefit the entire industry, while leaving those with the in-depth knowledge with the advantage. Others could save money catching up but getting ahead would be tough.