Max Mosley and FOTA meet for crunch talks on F1 costs in Geneva

Posted on | Author Keith Collantine

Standard engines, shorter races and customer components are being considered
Standard engines, shorter races and customer components are being considered

Max Mosley and the representatives of the Formula One Teams Association are meeting in Geneva today to discuss future rules that could transform the face of Formula 1.

It comes after several weeks of leaks, off-the-record briefings and the usual subterfuge that occurs whenever F1’s political tectonic plates start to shift.

Central to today’s discussion are radical changes to engines and chassis, forcing teams to use more common parts, and changes to the organisation of race weekends. Here’s a look at what the FIA is proposing, the teams’ reaction, and some thoughts on the questions at the heart of the matter.

The story so far

Max Mosley began his latest push to change F1’s technical regulations in May. At the time he was embroiled in the notorious sadomasochist sex scandal and the teams declined to meet with him. In July he sent them a letter demanding they propose future F1 technical rules or he would do it for them. He set a three-month deadline, which has now been reached.

The teams responded by forming a group to represent their interests: the Formula One Teams’ Association. More on this here: Why have the teams formed their own group and what does it mean for F1?

Mosley’s agenda

Despite Ed Gorman’s pursuit of Mosley over the sex scandal, The Times apparently remains the FIA’s preferred destination for F1 leaks. On October 9th details of the FIA’s proposals began to emerge including the following contentious phrase:

Under the new proposals there will be one standard engine specification, which each team will be able to build, but it will be identical to those of their rivals. The only difference will be the manufacturer?s name on the block.

Six days later The Times had a copy of the draft agenda for the Geneva meeting. It proposed:

  • For 2010-2012, either a homologated engine produced by one supplier, or similar engines supplied at fixed and much lower costs, or a guarantee from FOTA to supply engines for ??5m/year.
  • From 2013, a new specification of engine, to include exhaust energy and heat recovery.
  • Introduction of common chassis parts including ‘corners’ of the car (wheel assemblies and suspension), underbodies and other parts.
  • Other changes to the rules of racing to reduce costs.

Inevitably the prospect of a standardised F1 engine attracted the most attention, as it potentially represents a change to the very essence of the sport. The outcry grew louder when, on October 17th, the FIA announced it had requested bids from companies that might be interested in supplying a standard F1 engine. A few hours later, it issued a ‘clarification’, stating that teams would still be able to assemble their engines.

FOTA’s response

The same day details about FOTA’s counter-proposal began to emerge. They included:

  • Making engines last three races
  • Reducing testing from 30,000km to 20,000km
  • One car per test (two in off-season)
  • Reducing race distances to 250km / 90 minutes (from 300km / 120 minutes)
  • Making fuel loads public knowledge after qualifying
  • Offering one championship point for the fastest driver in part two of qualifying
  • Driver autograph sessions and better interview opportunities at races

FOTA was considering pressing for a ban on refuelling, but backed down after Mosley’s provisional agenda noted, “We believe that priority should be given to things which the public cannot see (e.g. telemetry) rather than visible parts of “the show” (e.g. refuelling during the race).”

The key questions

Do FOTA’s proposals go far enough?

The FIA’s proposed changes are sweeping and radical. FOTA’s are incremental and modest.

Max Mosley is talking about cutting costs to the extent that “a team can race competitively for a budget at or very close to what it gets from [Formula One Management, Bernie Ecclestone’s company].” At present, Mosley claims:

one of the teams at the back of the grid cannot possibly hope to raise more than – including the money they get from Bernie (Ecclestone) – say 40 million Euro, let’s say ??30-35 million, which in the real world is a huge sum of money, but that’s the most they can raise. To compete today, they need two or three times that and even then they’re at the back of the grid.

FOTA seems to feel reductions of this scale are not necessary.

Is the need to cut costs exaggerated?

Not everyone agrees with Mosley’s zeal for cutting costs in F1, as Clive explains:

Cost cutting is given as the excuse, of course, but when it is considered that the document includes several proposals that will require the design and manufacture of new technology, as well as yet more changes to the regulations as early as 2009, one has to wonder whether there will be any saving on expenditure for the teams at all.

Clive has an excellent point: Mosley’s demand for greener technologies will force teams to spend money, so in a sense he is trying to have his cake and eat it.

Others simply disagree about the scale of the problem. And many of those people are to be found in FOTA.

Are FOTA united?

FOTA represents all ten of the teams, whether they are car manufacturers (Ferrari, Toyota, Honda, Renault), manufacturer-backed teams (McLaren-Mercedes, BMW-Sauber) or independents (the rest).

Their budgets are estimated at ranging from $120m (Force India) to $445m (Toyota). Inevitably, they don’t share the same opinion on cutting costs.

Toyota’s John Howett said:

If we get told this is the budget for competing in this year, next year we will compete and we will do the best available job that we can within that.

That might make sense if you could halve you team’s budget and still have almost twice as much money as Force India. But the Gerhard Bergers of the grid see it differently:

If you look at GP2, and don’t get me wrong – I never want to compare GP2 to F1, and I never like F1 too close to any other series because it has to be different – but it cannot be that F1 costs one hundred times what GP2 costs. And on Sunday, when you watch the races, you sometimes see a better show in GP2.

(By ‘sometimes’ I think he means ‘always’).

Mosley’s tactics: conquest or compromise?

Mosley knows well the divisions and differences within FOTA and he has already tried to exploit them. He practices tactics of conquest rather than compromise: distract, divide and rule.

The ‘distraction’ came in the form of an attempt to stop FOTA from referring to themselves as such because Formula One is a registered trademark.

His issuing of a tender for the standardised engine contract was the ‘divide and rule’ approach. The practice of designing and building an engine is essential to why the car manufacturers are in Formula 1 – but their customer teams care only about getting cheap, competitive engines.

But FOTA seem to be wise to this. They have agreed and written down their position and instead of meeting Mosley en masse have sent two representatives to speak for them. Interestingly, both are representatives of car manufacturers: Ferrari’s Luca di Montezemolo (also president of FOTA) and Howett.

Contradictions in the FIA’s position

If FOTA’s potential disunity is its weakness, the apparent contradictions in Mosley’s proposals undermine his case for cost cutting.

For 2013 his proposal reads:

The FIA would like to see a modern high technology power train in 2013. We envisage a down-sized DI engine with exhaust energy and heat recovery, coupled to an electrically actuated gearbox.

However, we are completely open to new ideas. The only preconditions are (i) that the costs of development, maintenance and unit production for the power train must be an order of magnitude lower than is currently the case.

Would developing a new engine with exhaust and heat energy recovery really be “an order of magnitude” cheaper than keeping the same engines for another year and extending them to last longer?

On top of that, having introduced a freeze on engine specifications the FIA is now requiring that engine performance is equalised because, as Mosley explains:

When the decision was taken to “freeze” the engines, certain teams asked for and got a period of time in which to address reliability problems and re-tune for 19,000 rpm. Some teams took advantage of this period to improve the power output of their engines. This was not intended. Other teams did not improve their engines, believing performance to have been “frozen”. This has produced unfair and inequitable differences in performance.

This makes little sense as the performance of the engines had not been equalised before they were frozen. Instead of blaming some of the teams, the FIA should blame itself for being naive enough to think they wouldn’t pursue every avenue available to them to improve the performance of their cars.

According to Ron Dennis, ‘unfreezing’ the engines to make these performance equalisations will drive costs up even further:

We are a little bit mystified. All that talk about the five-year stability rule, the initiative was driven by cost-reduction and we have taken that cost reduction.

The FOTA proposal, meanwhile, contains some suggestions that seem to have no bearing on cutting costs and are demonstrably bad ideas. Their proposal to award a point to the fastest driver in Q2 is just plain awful: who wants to see F1 titles decided on a Saturday, when only a fraction of the usual audience is watching?

Could some teams leave F1?

At the beginning of the year Red Bull boss Dietrich Mateschitz announced he wished to sell Toro Rosso. The team uses the same chassis as its sister Red Bull outfit but that practice is set to be outlawed. However the prospect of allowing further standard parts may encourage Mateschitz to change his mind (and Sebastian Vettel’s victory at Monza can’t have hurt).

Would standardised engines force the car makers to quit? BMW’s Mario Theissen doesn’t like it and nor does Honda’s Nick Fry:

If you are talking about a standard engine, as in one that is identical and made by another manufacturer and they are all the same, we are very much opposed to that.

Car manufacturers tend not to give much indication of their intentions in this situation: if they’re going, they just go, as the British Touring Car Championship found out last month when Seat announced it was pulling out.

What other solutions are there?

If the problem is that F1 has become too expensive, cutting costs is not necessarily the only solution. Perhaps the teams should receive more money from FOM in the first place?

Autosport’s Dieter Rencken argued in favour of that in his column last week (sub. req.):

Increase the percentage paid out to the teams from the 50 per cent (in itself double the absolutely laughable 23 per cent the teams received between 1997 and 2005) to ensure that the revenues work to the benefit of the sport and its participants. Mosley suggested 75 per cent in June; why should the teams now accept any less?

He went on to suggest that more could be done to exploit the sport’s revenue-generating potential. I’m sure the many fans who find themselves unable to watch many sessions live would agree.

Over to you

This is an enormous and complex subject which I’ve barely scratched the surface of in this brief overview.

What do you make of these questions? Are you convinced by the need to cut costs? Is F1 in danger of over-reacting to the recent market turmoil? Would standardising engines and chassis parts dilute your enjoyment of the sport? Share your thoughts and analysis in the comments.

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29 comments on “Max Mosley and FOTA meet for crunch talks on F1 costs in Geneva”

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  1. So, after all the debates and name calling at the beginning of the year, Max and Bernie do want to see ‘Customer Cars’, although of course they want everyone to be a ‘Customer’ and they will do the selling!
    I hope FOTA see sense and refuse any form of standardisation anywhere on the cars – and who is in line to make the standard parts? If FOTA give in, it will be obvious to me that Luca is leading them down a dark alley straight into Max and Bernies hands!
    Of course, FOM and the FIA could do some cost-cutting themselves by not charging so much for a team to enter F1, and the drivers to get superlicences. They could introduce lower fees for the smaller teams (after what happened to SuperAguri). They could cut back on the number of officials who have to travel to every race. They could cut back on the number of official vehicles and motorhomes.
    I don’t think the teams should do anything until they see that the FIA and FOM really mean to cut costs!

  2. Positive but vague signs from Geneva: “FIA and FOTA reach agreement

  3. I’m all for some of the FIA’s proposals, such as the new powertrain for 2013, as fuel efficiency is important, and the engine model does need an update.

    Personally, I think they should ban refuelling straight away, limit testing distances, and accept FOTA’s proposal to supply their engines for €5m/year.

    Then in the meantime, the teams should work together to develop a model for an advanced powertrain system. Maybe hydrogen-based? F1 should be the testbed of technology – keep it that way.

  4. A standard engine is not the way to maintain F1’s brand identity. I have no doubt the mfgs would drop F1 and spend their dollars in a series like the ALMS/LMS where brand identity is more relevent. A cost cap seems to me to be a self-defeating proposition. Teams will always find a way to skirt it. Much better to limit aero to equalize potential performance.

  5. Thanks Keith, excellent and insightful article as always. I think the manufactures of the cars will simply not agree because what is the points of have e.g. “Honda” car name with a Cosworth engine.

    I think if The FIA insisted on spec-engines. They will definitely drive car manufactures out of the sport. And maybe this is what Max wants. Maybe is trying to drive car manufacturers out the sport. because to be honest the problem comes from the smaller teams. You can not prevent big teams from spending their money the way they want, it is not going to work and it is ridiculous.

    Why not let teams group together. Every big team take a smaller team under its wing. Share the engine and chase. and I know this already what is going on right now. But the difference is to make the prices really cheap for the smaller teams. Even better why not make a rule, every car manufacturer in F1 has to have it is own team and an independent team to support this way we will even have more new teams.

    Ferrari and ToroRoso
    Mclaren and Force India
    BMW and a New Team
    Renault and Redbull
    Toyota and Williams
    Honda and a New Team.

    and I know this sound a bit foolish and optimistic but I hope the day will not come so see spec-engine in all cars.

  6. DG:

    “So, after all the debates and name calling at the beginning of the year, Max and Bernie do want to see ‘Customer Cars’, although of course they want everyone to be a ‘Customer’ and they will do the selling.”

    This pretty much covers my opinion of this idea, Max & Bernie see a new way of taking money off the teams so they’re going to go for it, all in the name of cost saving.

    The easiest way to keep the sport accessible to independent teams is to allow them to buy customer engines and/or chassis that they are then allowed to tune to their needs, all at a set maximum cost.
    All manufacturers would be obliged to supply at least one independent team, if the demand was there.

    Problem solved.

    Let’s be honest, the big teams will always find new ways to spend money and they will always spend the whole budget regardless of it’s size.
    Unless they limit the budget there will be no cost cutting.

    Even with a limit the big teams will just get around it by having the work done on one of their road car projects accounts.

  7. Three race engines, jaysus h. christ. Does that mean they’ll turn down the revs after the first pitstop instead of the second one?

    Oh, and if they shorten the races I will be fuming. If you’re going to build these expensive machines then you should be running them more to get your money’s worth!!

  8. I sincerely hope that the shorter races proposal is just a bargaining chip that FOTA are using.

    If anything races should be longer and/or more of them(within reason of course, but adding Canada back onto the calendar would help) and testing less.

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