FIA respond to Ferrari threat

The FIA has released a statement in answer to the yesterday’s public statement made by the Ferrari Board of Directors.Ferrari flatly stated they would reconsider their involvement in F1 should the FIA continue on the road to using a standard engine. A shot heard round the eorld so to speak. This came just an hour after Toyota made a similar statement through the mouth of John howett, team Principle.

In all, one can read that the FIA is using their ‘spec engine’ tender process to press teams to select one of the options or deliver all new options that would satisfy the FIA’s desire to accommodate the smaller teams and avoid their departure from F1 due to unsustainable cost structures and a depressed world financial market.

On the surface, one can understand the FIA’s desire to protect the grid and teams and to ensure the veracity of the series and have a complete and more competitive field. Those are, of course, noble charges and should be the focus of current FOTA/FIA negotiations. What one may ask is; ‘why the chest-pounding and high-handed negotiation tactics?’. Max feels that the teams were given three option, spec engine beign one of them, and that the onus is on the teams to decide which of the three they would like or offer a solution that is yet to be put on the table. The second solution is the supply of engines for lesser teams for a cost of 5 million Euros. The last meeting centered around a engine supply agreement that would cost 10 million Euros.

So effectively this whole hair-pulling contest is down to 5 million Euros. McLaren were quick to announce their continued process of teaming with Force India(FI) and stated that as long as McLaren were made whole on their expenses, they would be willing to work directly with FI in a supplier or OEM position. No doubt this was viewed by many, including me, as a good option but it appears to be adrift of Max’s desire. It seems that it is not an option to just pass costs on to another team as McLaren’s costs are much higher than what FI could stomach. No, Max presumably thinks the McLaren/Force India deal is fine but would see the price tag at a locked-in 5 million Euros. The big question is, would that be a loss for McLaren and how will they feel about eating some of FI’s operations expenses on their P&L?

Max must reconcile that the big teams have much higher R&D costs, materials costs and expense associated with developing their machines. If Max is suggesting that these large teams provide engines and other materials to the small teams below cost, it would stand to reason that many of the manufacturer’s would not be jumping up and down in place to sign up. F1 is a business. The FOM and FIA are not in the business of losing money and running at a continued loss but neither are the manufacturer’s. Perhaps to keep the sport afloat, the FOM or FIA would be willing to bridge the gap totaling $20 million Euros for the small teams? Highly unlikely but that is exactly what you are asking the manufactuer’s to do. Offer services to Williams, STR, Red Bull Racing and Force India and cover an estimated 5 million Euros of cost. This assumes that 10 million Euros is a good number and the approximate cost each manufacturer spends on engines.

As a novelty, I place the FIA statement here for your perusal. Note the high-handed comments exposing Max’s bravado and posturing. To be honest, with this kind of sophomoric behavior, is it any wonder anything gets done with the FIA. Lording over your revenue generators is hardly a tact I would be using to seek harmony and stave off the financial crisis that Max so correctly warns of. Emphasis added by me:

“The FIA has noted the press statement issued by the Ferrari Board of Directors.

It seems the Ferrari Board were misinformed. The FIA has offered the teams three options, one of which is the so-called standard engine, and another that the manufacturers should jointly guarantee to supply power trains to the independent teams for less than €5m per season.

The FIA is delighted by Ferrari’s financial success and hopes this will be maintained. However a number of teams find themselves facing costs which greatly exceed income. This is not sustainable.

“It is now for the manufacturers to agree one of the three FIA options or themselves produce concrete proposals to reduce costs to a sustainable level.”

Although clearly hoping that the teams can come up with a proposal that satisfies it, the FIA has made it clear that it will take whatever action is necessary to ensure the survival of the all teams – even if it means a standard engine.

Referring to the consequences of the teams not agreeing on one of the two alternative options, the FIA said: “If neither happens. The FIA will take whatever measures prove necessary to preserve a credible world championship for both drivers and constructors.”

Max makes a grand assumption that ensuring the survival of all teams through a spec engine regulations actually will ensure the demise of F1.

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