Ferrari: If F1 wants cheap engine, they can pay for it

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Things are getting a little dicey over the whole 2017 engine and regulations changes that are due later this month. The teams, along with the FIA and FOM (Formula One Management), agreed to table the concept of an alternative engine spec for the series and they were all to go away and brainstorm on ideas on how to reduce the cost of engine supplies.

They are due to reconvene this week and discuss their ideas. In the old days, Flavio would show up with a slide projector and treat them all to a 2-hour “what I did on winter vacation” show replete with mankini and naked women but those were the old days. Now, there’s work to be done and the teams are getting vocal in the press about how they feel regarding a second engine format or even the mandate that the World Motor Council gave Messrs. Ecclestone and Todt to make whatever changes they deemed needed to safeguard the sport. To quote Uncle Billy, there’s a squall in there and it’s shaping up to be a real storm…somebody better call the bank examiner.

The first thing you may have noticed is that new Ferrari CEO, Sergio Marchionne, isn’t afraid to poke anyone in the eye (heck, he fired Luca di Montezemolo for pete’s sake) and I get the impression he isn’t too worried about FOM boss Bernie Ecclestone either. That’s a bit like running with scissors or sniffing paint thinner in my book but then I’m not Sergio…the leader of Fiat Chrysler and Ferrari and all the little machinations, minions and off-shoots of those entities.

Sergio says that if F1 wants a low-cost competitive engine for small teams then they can go pay for it:

“If you go to Mercedes and you tell them ‘please give us a group of engineers to develop in a parallel mode a different engine, different to that of Mercedes that is compliant with the F1 rules and that costs a certain amount’ then I think FOM should cover that amount of money,”

Yikes. Now, on one hand I sense that’s a bit like tossing a champagne flute in the lap of a demure Bernie Ecclestone (not an Adrian Sutil throat cutting flute mind you). On the other hand, does he have a point? How onerous can the FIA regulations be for a team who happens to be a manufacturer? To mandate that they have to supply several teams at a loss leader is asking a lot of a company. In my mind, this simply means that if you’ve made the engines so complex that only the top manufacturers can make them, then you may have chosen poorly.

That’s easy to say though, isn’t it? It’s the high-tech engines that attract manufacturers so it’s dammed if you do, damned if you don’t…or is it? Somewhere in the back of my mind, I think throwing down a gauntlet like this is dangerous because Mr. E isn’t the sort of man to be trifled with. I could very well see him paying for a new engine spec, deducting it from the small teams prize money payout and making it a higher performing format than the current hybrid engines just to prove a point.

Like all threats and innuendos, we need to be careful here. Mr. E could broker a deal with Ford and Cosworth and bring back a V8 with KERS and kick everyone backside. Then again, he has folks to answer too as well so it is hard to know how this will play out.

As for capping the supply costs, Marchionnne doesn’t see that happening:

“Ferrari spends a lot of money in F1 and this has a great impact on the brands and development on a lot of our commercial activities that do not have a lot to do with F1,” he said. “It costs a lot of money.

“This is also expensive for Mercedes. It seems the only winner is Bernie.

“Those who are managing the commercial rights should take their responsibility.

“We also have a responsibility but it’s different.

“A change in the rules, imposing obligations on Ferrari or Mercedes, is absolutely inappropriate.”

I see his point and in the end, I think the FIA created the situation when the ushered in the manufacturer-luring V6 Hybrid engine that is so complex that only a select few can make it and have it competitive. That’s not to say that in time Renault and Honda can’t also make their competitive but it will take time and I’m not sure Mr. E is willing to wait.

Hat Tip: AUTOSPORT

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Paul KieferJr

First shot across the bow. Bernie could just as easily tack the cost onto the registration fee. Sergio wouldn’t have a leg to stand on. “It seems the only winner is Bernie.” If that’s what it takes, then I’m okay with that.

bobmendon

Bernie and the FIA brought this on by themselves by no recruiting new manufacturers into the sport. The other alternative is to go back to having Ford and others come back as suppliers. Of course they could not develop and sell an engine any cheaper than Mercedes or Ferrari or develop it fast enough to be competitive.

Seems to me the only fair answer is to do a bit of both. Attract new manufacturers but change the engine to something that suppliers could develop and field with out huge expense. Maybe use the same engine as the Indy cars.

Sakae

It is difficult to attract other manufacturers, because they all see what happen to Honda. (Restrictive development). Ford and GM already stated that they aren’t interested competing in the arena of hybrids. It takes long time to reach high level, it is not cheap, and one has to suffer humiliation, as Honda has. Injecting a new spec engine into a game some, right or wrong, see as mortal strategic error for F1.

Coji

If FIA built or paid for the engines, they would do so in a cost effective manner (Bernie likes to hold onto his money, but is also generous at the same time). In what world can you recruit or hire people, then tell them they have to pay for more than what was initially communicated after already making them spend a fortune to being with. That’s likely very oversimplified, but it’s okay. I think the point is followed at least partly. Teams aren’t like tracks; they can’t be expected to pay more (changing regulation or formats is introducing unrealized or… Read more »

Sakae

Cost cap cannot be enforced in western type of commerce. BTW, FiA is a regulator, not an engine supplier; there is conflict of interest somewhere, I am sure.

Coji

Engine platform X costs A dollars. If changing to an entirely new platform Y after years will result in B costs for development. If teams did not anticipate an entirely new platform so soon (yeah, regulations were set but it’s not reasonable to anticipate fully new/different platforms just because that agreement expired because look at how long the 8s and 10s were around) then it results in unforeseen costs, ones that were not discussed at the time. Do you think teams would have agreed to or invested this amount of money if they knew they would be so expensive, only… Read more »

Sakae

In F1 among other things we are dealing with business people, who should know something about cost of doing business. I have simply difficulty to believe, that no one would have asked in 2009/2010 questions of a kind, how does this switch to hybrids affects me, can I afford it, and develop strategies how to cope with it; what is the limit I can pay, etc. Due dilligence, and risk analysis are essential parts of it, and that should have prevented surprises down the line. There should have been letters received by FOM/FiA from Tier 2 group lawyers, stating, CA… Read more »

Sakae

If I read SM correctly, I think what he is suggesting (with tongue and cheek), is for CVC/FOM to purchase engines of engines manufacturers at current cost, and resell those cheap to Tier 2 group. Loss on the transaction could be considered as their contribution to the business.

CVC made a lot of money over the years, and what evidence we have how much they really invested..? In contrast, we do know how much others are contributing in specific areas.

MIE

I believe that when the new power unit regulations were written, the FIA thought that by limiting the number of PU used by each car per season they would control costs. This assumed that the manufacturers would carry out limited development (restricted by the token spend) so the cost to the customers would be affordable. What it didn’t take into account is the capacity for the manufacturers to spend money if they see the opportunity to gain an advantage over the opposition. As there is no restriction on dynamometer time, manufacturers can develop multiple different PU designs within their token… Read more »

Sakae

“Limiting the number of PU used” – what was that suppose to resolve? F1, to re-state obvious, is not only about catching up, but getting ahead, and this fundamental tenet in racing could be restricted without consequences? Moreover, implied demand for increased reliability requires extra efforts, especially when one takes into consideration penalties FiA decided to impose for those unfortunate. It is then hard for me to believe, that no one would have thought about conflicts within those rules, how they will be approached, and how cost of continuous improvement will rise due to alternative methodologies which had to be… Read more »

MIE

Much like restrictions on testing, wind tunnel time, DVD processing time and long life gearboxes, restrictions on the number of engines used (when F1 had V8’s) and later the number of power units was supposed to control costs. What these regulations fail to take account of is the business model of all the F1 teams (with the possible exception of Red Bull), and that is they will spend every penny they have on trying to go faster. If the regulations limit spend in one area (testing), they will find other less efficient avenues to spend that cash (simulators). Some teams… Read more »

Sakae

Going faster, and lasting longer then a guy next to you, is axiomatic to racing, thus I cannot blame Tier 1 for going full out. Ferrari will never be happy to boast on the Stock Exchange on Monday – we have defeated Manor (or Williams, RBR, etc.) on the weekend, but as long that could be said about Porsche or AMG, now we are talking! As long as this assertion holds water, than we have wrong rules, and series is badly out of balance. Spending money as described by small teams sounds like a textbook gambling case. Harsh reality however… Read more »

Sakae

For the record – from horses’s mouth – Arai:
“The token system is a good system to reduce the cost because the areas for development are limited. But if you have a big gap it is very difficult to catch up.”.

In other words, once you made a mistake, you are stuck with it for very long time.

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