Mercedes to take 75% stake in Brawn – but what does that mean for McLaren?

The Brawn cars could carry Mercedes logos soon

The Brawn cars could carry Mercedes logos soon

Back in April, when Brawn were striding to victory wherever they showed up, I had a conversation with one of Mercedes’ product managers. Why, I asked, weren’t Mercedes rushing to get their logos on the BGP001s, as it looked like they were going to romp to the championship?

He explained that because Brawn only had a customer deal with Mercedes, the engine manufacturer didn’t get to put its name on the car. Mercedes’ exclusive deal with McLaren meant that only the silver cars bore the three-pointed star.

I later wrote a piece titled ‘Mercedes should put a sticker on this car‘ above a picture of a Brawn. And now that looks likely to happen as a report in the German press today claims Mercedes will take a 75% stake in Brawn by 2011. What does this mean for Brawn – and McLaren?

A boost for Brawn

The story in Auto Motor und Sport claims that because of Mercedes’ deal with McLaren its investment in Brawn will be held by Abu Dhabi state-linked company Aabar in the meantime.

Aabar bought a 9.1% stake in Mercedes owner Daimler in March, injecting ??1.95bn into the company. Aabar has previously invested $380m in Virgin Galactic, the space tourism company run by Brawn’s sponsor, but that is probably not related to the deal as Virgin is transferring its sponsorship to the new Manor Motorsport F1 team in 2010.

The development will be welcome news for Brawn, which has needed to secure long-term funding since becoming an independent outfit following Honda’s departure from F1. It gives the team security, allowing it to plan for the long-term and boost its attractiveness to potential sponsors.

Mercedes has not previously insisted on having a German driver at McLaren. But was this out of a lack of desire, or simply because they did not have a majority stake to demand it? If so, we could see one of Brawn’s drivers replaced with one of F1′s many German drivers next year.

A potential target could be Nico Rosberg, who has been tipped to leave Williams and who drove for the Mercedes-Benz/McLaren kart team in 2000 alongside Lewis Hamilton.

What about McLaren?

Mercedes’ stake in Brawn does not automatically mean it will have to surrender its 40% stake in McLaren – after all, Red Bull own two Formula 1 teams. However there has been a discernible loosening of the ties between Mercedes and McLaren in recent years.

Earlier today the new McLaren MP4-12C sports car was revealed and tomorrow Mercedes will publish official details of its rival sports car, the SLS – having taken care not to coincide its announcement with McLaren’s.

The two companies previously collaborated on the Mercedes SLR McLaren, the last examples of which were recently completed at the McLaren Technology Centre. McLaren has built its own V8 engine for the MP4-12C – does it plan to produce its own F1 engines in the future too?

Another change coming McLaren’s way in the near future is the widely-expected loss of major sponsor Santander. Ferrari is expected to announce a deal with the Spanish bank tomorrow, which may include confirmation that Fernando Alonso, who joined McLaren with Santander in 2007, will be a Ferrari driver in 2010. It remains to be seen who McLaren will replace them with.

Regardless, McLaren is forging ahead with its road car development programme which anticipates 1,000 sales by 2011 and the development of future models. In July Woking Borough Council approved its request to extend its production facilities.

Perhaps this is not just a case of Mercedes seeking an alternative to McLaren, but also McLaren forging an independent path for the future?

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79 comments on Mercedes to take 75% stake in Brawn – but what does that mean for McLaren?

  1. Steph90 said on 9th September 2009, 20:59

    Excellent article Keith.
    Brawn the new mclaren? Big money and the mercedes badge?
    I can see Mercedes just wanting to invest more in other areas of F1 than solely Mclaren so naturally shifting interests rather than deliberatly preparing the ground to sever all ties.
    This also adds to sill season…Rosberg to Brawn, Kimi to Mclaren. Whatever happens interesting grid next season.

    • Keith Collantine (@keithcollantine) said on 9th September 2009, 21:52

      Thankyou! Like you say, it’s not hard to see Mercedes running with this and creating their own entire team, as they did back in the fifties. Would rather rub BMW’s nose in it, wouldn’t it?

      • How about Kimi to Brawn then? Will we be seeing FOUR silver cars on the grid next year, 2 with red highlights, 2 with lime green?

  2. Patrickl said on 9th September 2009, 21:04

    Mercedes (Haug) has always been pretty clear he wants a German WDC in the Mercedes powered car. So I guess that would mean that he want’s Hamilton out. Maybe they can pursuade Rosberg to move to Brawn and make a German WDC there.

    From McLaren’s point of view, perhaps engines are not that important anymore (since they all offer basically the same performance) and McLaren feel that they can do without Mercedes?

    I’d say it would be bad news for McLaren if Mercedes left. They will probably need a new engine for 2013 again.

  3. Robert said on 9th September 2009, 21:12

    While part of me is glad to see Brawn receive support from a big company like Mercedes, another part of me likes that Brawn is an independent team.

    While Mercedes-Benz seems to be the car manufacturer most committed to F1, is there any reason to believe we won’t see a tale like BMW Sauber? The situation is eerily familiar. BMW has a partnership with Williams, but then leaves to buy Sauber. After a couple of years, BMW decides to stop competing in F1, leaving a team to struggle to find a buyer. If that happened with Brawn/Mercedes, would they let Ross buy the team again?

    All that aside though, cars painted in Mercedes silver with touches of Brawn green could look pretty good.

    • Boston F1 Fan said on 9th September 2009, 21:20

      - While Brawn is independent you’re forgetting that Brawn received HUGE financial support from Honda. They are far from the team of plucky Brits the media has made them out to be. They have very few logos on their cars yet are able to maintain a high rate of technical progress, indicating an abundance of funds.
      - The true independent team is Williams; there is a reason that their cars have dozens of logos plastered all over them.

      • Mike "the bike" Schumacher said on 9th September 2009, 21:34

        Brawn’s current success is just a product of Honda, they have downsized massively since, next year would have been the first year that they would have been true independents probably struggling to keep pace but with Merc it’s a different story.

    • Keith Collantine (@keithcollantine) said on 9th September 2009, 21:53

      I see your point, Robert, but Mercedes have been pretty committed. It took a horrible crash to drive them out in 1955, and since their return they’ve not looked like leaving.

    • actually, I would argue that Ferrari represent the most committed car manufacturer to F1 and, unless you foresee another global financial meltdown the likes of which we have experienced over the last three years, then the situation is not so eerily familiar.

      • But Ferrari were a race team first, who moved into producing road cars (A bit like McLaren now). Thats the difference

  4. Boston F1 Fan said on 9th September 2009, 21:16

    I don’t see Mercedes abandoning Mclaren for Brawn. Brawn’s performance this season was due to a huge developmental advantage at the beginning rather than intrinsic team talent. There is no doubt in the strategic abilities of Ross Brawn but I fully expect McMerc to be back at the front come 2010.

    The only issue I see is Mclaren’s ability to mire itself in controversies and bad publicity. If anything, Mercedes should take a bigger stake in Mclaren and kick them around a little bit as if to say “stop being stupid or we’ll pull out”.

  5. Mike "the bike" Schumacher said on 9th September 2009, 21:23

    Well I hope this doesn’t mean that Brawn are going to be called Mercedes, and I hope McLaren will be able to be as competitive and survive without them.

  6. Bartholomew said on 9th September 2009, 21:24

    I think that both Brawn and Mclaren will do well. Seems that McLaren is changing direction towards a different future, both in F1 racing and in production cars.
    What a pity that the SLR will not be made anymore. I think that McLaren should not make all its new production cars rear – engined and radical looking. There would be a lot of good business in making some models that have a front engine and looks that are as elegant and evocative as the SLR and the Sterling Moss Replica.
    All kinds of good things can come out of the fact that the energies of Ron are not dissipated by the aggravations coming from Bernie, Max, Lou , Flav, Todt “Newman” and all that rabble. Now he can work in peace and sleep in his own bed at night.

  7. HounslowBusGarage said on 9th September 2009, 21:28

    Keith, great article. So far none of the major news sites have got this story. Although The Grauniad did report the first inklings on 7 September here http://www.guardian.co.uk/sport/2009/sep/07/formula-one-mclaren-mercedes Scoop!
    All the others are still reporting Williams and Force India’s invitation back to rejoin FOTA. http://www.telegraph.co.uk/sport/motorsport/formulaone/f1news/6164220/Williams-and-Force-India-readmitted-to-Formula-One-Teams-Association.html

  8. Rikadyn said on 9th September 2009, 21:37

    Now imagine this scenario:

    Mercedes quits supplying engines for McLaren, and McLaren isn’t up to producing their own, so has to buy engines, and the only ones to offer them are Ferrari.

    /twilight zone

    • HounslowBusGarage said on 9th September 2009, 22:01

      Lol!

    • mp4-19b said on 9th September 2009, 22:26

      McLaren would rather pull out of F1 than buy crappy engines from that riff-raff company.

      I really am hoping for mclaren to terminate their engine deal with merc.

      McLaren have taken a very bold decision to make engines on their own for their mp4-12c supercar. I wouldn’t be surprised at all if mclaren do the same in f1 too. I think its the correct way forward.

      Merc are a bunch of traitors. Never knew some of their personnel include some of the dumbest brains on the planet. The ONLY reason Brawn are doing so well is cuz Honda invested everything it had to offer back in 07. The brawn probably is the most expensive car ever made in f1 history. It is said that honda were running 5 wind tunnels 24X7 for over 2 years. Are merc so naive to be thinking this brawn domination will continue forever??

      I really am hoping for brawn-Merc partnership to fail miserably. This is gross injustic!! They’ve been supplying mclaren, crappy engines for the past 15 years!! They’ve used mclaren as some sort of a Guinea pig for sorting out their reliability problems. merc cost them the 2000,2003,2004,2005 championships.

      Merc haven’t learnt from past experiences. look what happened to Honda & BMW. At least Honda was man enough to secure its furure, but BMW..

      Moral of the story:-

      Never trust Germans, especially automakers.

      But what else can you expect from a German automaker that was once backed by the Führer himself ;)

      • HounslowBusGarage said on 9th September 2009, 23:46

        But what else can you expect from a German automaker that was once backed by the Führer himself

        Unecessary and irrelevant. And not even funny.

        • manatcna said on 10th September 2009, 2:18

          Spot on Garage man

        • Harv's said on 10th September 2009, 2:33

          come on mp4! thats a bit over the top, anyway that mercedes engine has developed into an absolute power house! the engine that they produce is way better than the ferrari or any other engine on the grid.

          i dont know why merc are so interested in such a small team, it will be interesting to see how dreadful brawns car will be next year.

          Also with Norbert, on autosport’s website yesterday he said that mclaren have been talking to williams to try buy hulkemburg to replace keikki next year, so could we see another rookie in mclaren next year?

        • mp4-19b said on 10th September 2009, 4:25

          Unecessary and irrelevant. And not even funny.

          http://www.youtube.com/watch?v=sIbPCwXP9A0

      • Martin said on 10th September 2009, 3:00

        Man.. you need to lay off the scotch..or ganga, whichever it is. F1 is a fickle fraternity of people who have never shown loyalty to anyone. Those who did got screwed over. Look at Honda and what they did to Williams, and your beloved Mclaren was the beneficiary. Honda has left so many teams hanging I wouldnt ever trust them.
        Actually to stay with 1 team for the last 15 yrs is pretty good and shows a great deal of loyalty.
        If Mclaren can come up with their own engine and dominate the f1 scene, that would be a great thing. I would applaude that.
        As far as them using those engine from that riff-raff company, I bet if the deal come down and it is to both companies advantage it wouold happen. It would be a far better result than when they ran Peugeot engines those couple of years.

      • Sour grapes!!!

        • btw, my comment above is for mp4-19b.

        • mp4-19b said on 10th September 2009, 4:31

          Not at all!! I’m very happy that mclaren are finally getting rid Mercedes. They’ve had enough engine failures for a life time.

          http://www.youtube.com/watch?v=oiKXCjMwamM

          • Jay Menon said on 10th September 2009, 6:10

            MP4-19B

            You need to lighten up a little. Mclaren have won 3 WDC and come close over the tenure of Merc engines, thats a pretty good return if you ask me.

            There is no loyalty in sport man, its a business. The company will always do whats in it best interest, it goes along with its vision. If Merc believes that investing in 75% Brawn is the way to go, who are you, me and all of us to argue this? I personally believe Maclaren aren’t exactly a steady ship since the departure of Ron Dennis, I also get the feeling that Hamilton’s (Sr and Jr) influence on the team may be a little overpowering for the very patriotic Haug.

            If Merc want to see a German WDC in their car, so be it, thats their company goal. Maybe they feel that Brawn would be a better platform for this. I mean seriously, who better than Ross Brawn to win you multiple championships? It would also be great to see Nico Rosberg or Sebastien Vettel in Brawn!!

      • merc cost them the 2000,2003,2004,2005 championships.

        This part is actually true. It’s only now that Merc seem to have a fast and reliable engine.
        I feel bad for Kimi who had the pace to become a WDC during his time at Mac but was let down by his fragile engines.

      • man, lighten up. THis is a good thing. It shows Mercedes are committed to F1, a good thing given the world economy of late. It has also been widely acknowledged that it is far easier for a manufacture to supply a good engine, than a whole package. So if Brawn and Mclaren have the same package, it is up to Mclaren to use their nouse, expertise resources and experience to beat Brawn. If they can’t… well good on brawn.

        I really am hoping for brawn-Merc partnership to fail miserably. This is gross injustic!!

        . Don’t wish failure on someone, it is not nice. Rather, maybe wish Mclaren greater success than Brawn whist using the same package?

    • McLaren-Cosworth, anyone? ;)

  9. Alistair said on 9th September 2009, 22:02

    I don’t want to believe this story; and I won’t, until it’s confirmed. It just looks like speculation at the moment. McLaren is, for Merc, by far their best choice. Brawn have done very well this year, of course. But a lot of people seem to forget that they’ve been focusing their entire collective efforts on this particular car for two years! (And they had all the Honda money.) McLaren have far better infrastructure than Brawn; and Merc can’t simply acquire something equivalent at all quickly, cheaply, or with any ease. McLaren have Lewis Hamilton (the best F1 driver, as Alonso witnessed, first-hand) contractually tied-down for years. And, with Big Ron gone, the antagonism with the FIA has clearly diminished (and hopefully evaporated). I don’t buy the claim that Merc are going to buy Brawn to get a German driver: McLaren have announced that they’re negotiating with Rosberg already, who looks set to join them next year, anyway.

  10. McLaren I’m sure are forming and or checking on the viability of their plan B scenario for when Mercedes bail out…

  11. Bigbadderboom said on 9th September 2009, 22:19

    What we do know about McLaren is they have the ability and resources to build an entire package if they have to, it would require a change in their F1 business model in the way that resources are allocated, but if we are to really see spending levels return to 1990′s levels then it may well be viable for McLaren to return to full independence.
    http://en.f1-live.com/f1/en/headlines/news/detail/090909162021.shtml

    Rosberg at Brawn, Hamilton McLaren, Alonso Ferrari, Vettel Red Bull, is next season going to be a Golden Era in F1, I hope so. For Sure ;)

    • Charlie said on 16th September 2009, 15:28

      And of course, Mercedes don’t actually build their engines, it’s the Merc-funded Ilmor facility.

      Though as they own Ilmor now Merc can do with it what they please.

  12. Thanks for that update Keith, it helps me makes sense of the whole situation.

    Regardless, McLaren is forging ahead with its road car development programme which anticipates 1,000 sales by 2011 and the development of future models. In July Woking Borough Council approved its request to extend its production facilities.

    When you do the maths here, 1000 cars @£160k each is £160m. That’s a bloody lot of money if they’re really confident in the car they’ve built – and they seem to be. The really super-rich will always be able to buy these cars if they want to, so this end of the market might not be hit quite as hard as road cars… how many Smart cars would M-B have to sell to raise £160m? :)

    I think, TBH, that the McLaren Mercedes brand is well esbtalished, and that the two sides are both gaining a great deal from the situation as it is now.

    I ALSO think that McLaren don’t want to sell any more of the team to Mercedes because they want it to remain McLaren.

    So if Mercedes want a larger say in an F1 team, buying into Brawn, who have great marketability and a great technical base, is the way to go.

    I see it working out fine – McLaren Mercedes progressing as they are, with the excellent F1 engine from Mercedes, and the (usually) fine chassis from McLaren. The racing is managed mainly by Team McLaren, with Norbert (or similar) sitting there to oversee the engine side of that.

    Brawn Mercedes will be a team, I’m guessing, with much more direct Mercedes input into the running of it at a high level (drivers and other personnel), but again with the chassis of course from Brawn and the engine from Mercedes. And when the Brawn team do well, with the lower budget, Mercedes walks away with lovely actual money as a result. :)

    Sounds extremely sensible to me. Don’t they say that the people who make money in recessions are those who buy the assets that others (in this case Honda) sell at knock-down prices? And since in this case Brawn bought the team for $1, whatever Mercedes pay for the team is pure profit.

    Winners all around. Except Honda, whose bad timing has made them look soooo silly.

    EXCEPT!!!!
    ======
    (was that emphatic enough?)
    The strong situation that Brawn has found itself in is all credit to Honda, and the way that they managed the process of leaving F1. They handed the team over to the management and gave them a starting budget. They behaved extremely honourably, and into the deal they probably forked out less than they would have in redundancy packages.

    Now look at what BMW did. They failed to sign the Concord agreement, and as Joe Saward and others have pointed out, wiped about $80 off the value of their asset, and made it much harder to sell as a going concern. Even if they now sell it to Peter Sauber for €1 (and the word is they are looking for €65m) he has all the hassle of trying to get an entry again for next year.

    So BMW have shown us how NOT to leave F1. They’ll probably end up paying more in redundancies than they would have lost by selling to PS for whatever he was offering the night before the Concorde cut-off date.

    No wonder BMW are not very popular.

    Sorry, I went off in a tangent there a bit, but I’m still frustrated that we may lose a good team from F1 due to corporate mismanagement.

    Back to the main subject – I see McLaren Mercedes and Brawn Mercedes competing against each other successfully just like Williams Renault and Benetton Renault did in the 90s, and McLaren Honda and Lotus Honda did in the late 80s.

    People forget that things change, and then they change back. :)

    Sorry for going on a bit.

    The Brawn deal,

    • HounslowBusGarage said on 9th September 2009, 23:50

      Good post; I appreciate your argument.

      • Danke schoen. Nah just kidding I’m Irish .. We seem to have had quite a few new people here the last couple of weeks don’t we? A different tone. :) Nice to see the familiar face! Name, Nick, whatever!

    • Bartholomew said on 10th September 2009, 0:16

      Good insights bro! next year will be a good one! Just a question? are they going to mantain those wheel covers or get rid of them ?
      I would get rid of them so that wheels can be painted in all kinds of beautiful colours and finishes

      • It’s sis :) I believe the spinners have been banned for next year, and I wouldn’t be a bit surprised to see them gone this year in fact. With current sensitivities about bits flying off cars, they’d be an obvious target, and provided everyone loses them at the same time, everyone should lose similar amounts of performance. I heard Ian Phillips say they are worth 3-4 tenths, but he also said they should be banned straight away.

      • I love those wheel covers!!

    • Martin said on 10th September 2009, 3:04

      That is very true, me and the misses were looking at an M3 the other day and even she said she didnt want to drive a BMW after the way they walked out of F1.(Yes she enjoys racing as much as I do). Now we are looking at a E55 or and E63 instead.

  13. Eek. Wish I could edit that and close the ‘em’ tag. :)

  14. Prisoner Monkeys said on 10th September 2009, 0:22

    I don’t really know what to make of this.

    I honestly cannot see Mercedes jumping the McLaren ship entirely. It seems to presumptuous; they have an establishd track record with Woking, whereas Brawn are in their maiden season. A lot of people expect this to be Brackley’s only success for a long while. It just seems foolish on the part of Mercedes, and I don’t think Norbert Haug is the sort to make decisions too quickly. After all, Mercedes was supposed to unveil their 2010 engine plans at Monza, but Haug said there is no rush.

    If it’s true that Mercedes are buying 75% percent of the team, I hope they at least keep the Brawn name and allow them to run the yellow and black in some way. With their lack of sponsors, the team colours have forged an identity for the team, and one that I don’t think should be given up.

    • Johnnie Siggie said on 10th September 2009, 1:05

      Mercedes wants to be more dominant in F1 and Mclaren is standing in their way. Mclaren is not supportive of MBs plan to supply a fourth team (red bull) in 2010. IMHO the big picture is that MB is sensing a kill of (Toyota and Renault) which leaves only 3 engine suppliers (MB, Ferrari and Cosworth). From a business perspective if you are gonna be in F1 you might as well supply 4 or 5 teams instead of 3.

  15. Bartholomew said on 10th September 2009, 0:51

    This could be of interest to F1 fans that life close by, or even a little further :

    Both Mercedes-Illmor and Cosworth make their engines in Northamptonshire. In the city of Northampton they make the best Goodyear – welted mens shoes in the world : John Lobb, Edward Green, Crockett and Jones, Churches, Grenson, Alfred Sargent, Loake, etc. They make dress and dress casual, modern classics and also trendy styles executed with a lot of flair.
    They must have factory outlets for defectives, production overruns, sample sizes, etc.— all drop-dead gorgeous and at a big discount. That might be where Mosley gets those stylish shoes of his.

    So! How about a few mates going up there for an engine plant visit, and also to stock up on shoes. With those fabulous new shoes, the ladies will just melt.
    please keep me posted about the visit.
    Next time lets notice the shoes that Norbert Haug is wearing : he has no excuse – if he wears Mephisto instead of Crockett and Jones he gets a drive-through and 50.000$ fine.
    Cheers !

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