Big team cost-cutting ideas are a ‘joke’

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FIA president Jean Todt unleashed a screed in which he was critical of the large teams and their proposals to cut costs in Formula 1. The concept was to offer some thoughts on how the teams could reduce the expense of running and F1 team from the current window of $100 million to $400 million. The teams offered a few ideas but Todt is nonplussed telling AUTOSPORT:

“What was proposed? It was a joke,”

Todt says that he has asked the small teams to offer their ideas—the teams who are not on the F1 strategy group—and it has yet to be revealed as to what concepts they have arrived at.

Todt says that the biggest area of cost-cutting is headcount. Staffed with 800 employees, the big teams are carrying significant overhead in salaries. If you consider 300 people at $40,000 per year, that’s a $12 million burden.

As always, when equity is sought for anything, headcount and human collateral damage is the first thing to go down the equilibrium spiral. There is little equitable about firing 300 or more people and while Todt’s concern is understood, the small teams aren’t employing those kinds of headcounts. If the large teams are, that’s their business but I thought the ideas was how to cut costs to keep the little teams in the sport.

Surely Sauber isn’t employing 800 people in which to cut? Caterham? Marussia?

The concept only works if you have more specification racing and that’s something no one wants. Lots of ideas have been proffered but it remains to be seen just how the FIA and teams will resolve the situation. Perhaps Todt feels that cutting headcount for all teams will reduce resources that can be applied to the program and this will have a leveling effect. Maybe but it’s a bit of a gamble.
Todt said:

“The proposals that they seem happy with are to reduce budgets by $2 million, which is ridiculous.

“When we speak about costs we must speak about reducing it by 30-40 per cent. Then we can feel comfortable.
“So what can we do? I have some ideas. I gave some input, and I want to see what the teams say.

“We will meet with all the people and hopefully they are sensible people and they come with some sensible suggestions.”

The debate continues and Todt has two issues to use at his disposal. The decision made prior to the end of June do not need unanimous consent by all the teams and if he isn’t getting the cuts he wants from the big teams, he can wait until after June to pressure the big teams by bringing in the small teams to force a showdown and quagmire over a vote of unanimity. That sounds cumbersome but then F1 is a cumbersome sport when that much money is on the line.

We’ve talked about this before but how could you get all teams on board with a cost-cutting concept that would radically reduce the cost? Is headcount the only way?

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