Champ Car World Series Press Conference Transcript Concerning The Status of Cosworth Racing
THE MODERATOR: Good afternoon, Ladies and Gentlemen. I'd like to welcome you to the media call. I think probably by now you will have caught up with the news that has been announced earlier today over here in Europe. What we'd like to do on this call is to run through that news again. I'm joined by Richard Perry-Jones, who is the group vice president, chief technical officer, and has overall responsibility for Motorsport at Ford. Also joined by Kevin Kalkhoven who has been confirmed as the new owner of Cosworth today, and Tim Routsis, who is the managing director of Cosworth. The format today is we will just make a few short remarks from the speakers, then we'll hand it over very much to you and take the Q&A over the telephone line.
I'm going to turn it over to Richard Parry-Jones who is going to make a few remarks.
RICHARD PARRY-JONES: Good morning, good afternoon, wherever you are, Ladies and Gentlemen.
This is probably old news by now, but for the avoidance of doubt, I'm going to reiterate the main points of the announcement we made today, that is that Cosworth was purchased by Kevin Kalkhoven and Gerald Forsythe, who as many of you know are co-owners of the Champ Car World Series and PKV and Forsythe Championship Race Car Teams respectively. I personally am absolutely delighted that Kevin and Gerald have bought Cosworth. Many of you will know that since we made the announcement to sell our Formula 1 businesses in September, we've received tremendous support from the management and the employees at Cosworth. We've been working very hard to secure a sale to a reputable buyer.
Kevin and Gerry are very successful businessmen; they have long history in Motorsport and a clear vision of how they want to take Cosworth forward. You can imagine how pleased I am that we've arrived at this outcome.
Of course, separately today we've also announced the sale of our Jaguar racing team to Red Bull. As part of that decision, we've announced that we're very pleased that Red Bull will be racing with the Cosworth Formula 1 engine next year in their car.
From our point of view at Ford, of course, it's a day mixed with sadness and joy. A sadness that we're in the passing of an era after 35 years in Formula 1 with a partnership with Cosworth. Deciding to exit was a very tough decision. But during that time, we should rejoice in the fact that Ford and Cosworth together have experienced the highs and lows of the sport and we've left a very rich legacy of victories and championships that have been won by some of the most famous drivers and teams in Motorsport history. Sadness and joy are mixed up in those emotions.
Just to remind ourselves as we reach this point in our history that this success would not have been possible without the contribution of all our employees. Our partners, our drivers, our sponsors, and last but most important of all, the fans. I'd like to thank them all. I reassure this famous racing name will go forward under the stewardship of Kevin Kalkhoven and Gerry Forsythe. We look forward to a positive relationship in the future with Cosworth and Ford.
Congratulations on your new acquisition.
KEVIN KALKHOVEN: Thank you, Richard.
Good afternoon or good morning, folks, it's Kevin Kalkhoven. When Gerry and I first talked about the situation, it's something that filled us with a great deal of excitement, partly of course because we're both motor racing nuts and also because we're businessmen.
Cosworth is one of the great Motorsports engineering companies in the world. Its legacy, as Richard has said, extends on both sides of the Atlantic to many, many championships and many, many victories.
When we started thinking about it and talking about it, we also began to realize the opportunities of the future because while Cosworth does have a significant heritage and legacy, what is of course as important is where we take it from here.
The first aspect of that was the Formula 1 side. Of course, I'm delighted that the Red Bull team will be on the grid for Formula 1 in 2005 with a Cosworth engine, as will Menardi. So Cosworth will continue to be represented on the Formula 1 grid, and it will continue to the development of Formula 1 capabilities in the engines.
The second pillar of what we wanted to be able to do was, of course, in North America, with the Champ Car World Series. CART, Champ Car, has used Ford-Cosworth for many, many years, incredibly successfully; some of the great victories in the series have been with Cosworth engines.
The Cosworth engine in the Champ Car World Series has proven to be an outstanding engine with significant horsepower, a lot of software capabilities have been built into the engine to allow flexibility in the race formats, and has been an engine that has provided incredibly close and competitive racing this year, which has led actually to an average increase per race in our fan attendance.
The engine has really done everything that we asked of it. We look forward with this pillar of Cosworth for the future for developing more racing engines for North America, including potentially those of our ladder series and also extending the capabilities of Cosworth into this very fast-growing sector called the tuner market, that generation of folks 16 and above, reaching to 60 in my case, but typically ending at about 30, of people who are dedicated fans of motor cars and wish to continue to improve them. While the brand of Cosworth is a wonderful platform to be able to provide tuner accessories for these folks, it is certainly something we will be extending.
So Cosworth is an icon of Motorsports. We're thrilled to be able to continue its development. We look forward to its next generation of technology, and we look forward to having Cosworth engines in the Champ Car series powered by Ford for a long time to come, together with a very successful relationship with Ford.
Thank you very much. I'm now going to hand it over to the managing director of Cosworth, a gentleman who has headed it up and will head it up in the future with the existing management team, Tim Routsis.
TIM ROUTSIS: Thank you very much, indeed.
Good morning, everybody. I thought you might appreciate a short overview of the sort of things that we're going to be doing with Cosworth in the near future now and new ownership.
Just before going into that, I did want to take a moment to express a vote of personal thanks to all of the Cosworth employees on both sides of the Atlantic.
The sale of a sort of nature that has been gone through has attracted a massive amount of interest and attention for all the sort of reasons that Kevin and Richard have touched on. And inevitably, that sort of a process is very distracting for an organization, and inevitably it involves some uncertainties and a degree of worry in the work force.
Given that sort of an environment, it would have been somewhat understandable if people had in any way sort of had slightly sloping shoulders, heads down a little bit. But I'm absolutely delighted to say that the performance and professionalism of the staff of Cosworth, as I say on both sides of the Atlantic, has been absolutely exemplary.
They've continued to do the job in a fabulously professional manner, in a way which I found both inspirational and I would say slightly humbling, because without doubt, today's successful outcome is in no small measure due to their ongoing level of commitment.
When we do these sorts of sales, it's inevitable that there's a great deal of emphasis placed on balance sheets and assets. But I think in this case Gerry and Kevin really have got a first-class off-balance sheet asset in the Cosworth folks, and they are absolutely excited to go now into the future under this new ownership.
So what sort of things are we going to be doing? First of all, as you've gathered, we are going to be very much maintaining and strengthening our position in all of the forms of Motorsport in which we're currently active. What you can expect from us in the not to far distant future will be ongoing announcements of the sort of developments we're planning on undertaking.
In parallel with that, we've got some expansion plans which will be moving Cosworth and the Cosworth brand, which has been acquired as part of this sale, into some symbiotic markets and, in particular, we're expecting to do a lot of activity through the Torrance branch into the North American market.
You will see us in areas such as marine, but above all, the key message with this is that Cosworth knows where its heritage is, we know what we're good at, and you are going to continue to see us in all aspects of Motorsport.
There's a little overview about where we're going to be going in the near term. I think we're heading for some quite exciting times, and I know there's a very talented group of men and women that are really now ready to show the world what they're capable of.
So with that, if I can hand it back now to Stewart, and we'll take some questions, I believe.
THE MODERATOR: Thank you, Tim.
We'll take the first question, please.
PAUL NEWMAN: I don't have a question, but a comment. I'm delighted that you guys have bought Cosworth. You are great competitors, you're savvy businessmen. I just am glad that you guaranteed that Newman/Haas won't be down on horsepower.
Also, I'm specifically delighted that we'll continue to guarantee a supply of engines from Champ Car, free from any outside interference, which I think is really important.
That's not a question, it's a comment.
KEVIN KALKHOVEN: We thank you and congratulate you on your championship season with Sebastien Bourdais.
Q: Kevin, as everyone knows, Cosworth still has a deal to badge engines for Chevrolet for one more season in the Indy Racing League. Is there going to be any interruption in that contract or will that deal go ahead through this season?
KEVIN KALKHOVEN: Absolutely no interruption at all. We are professional businessmen. This is a contract that is in place and will continue to be serviced to the best of Cosworth's ability in the 2005 season.
Q: Kevin, when you and Gerry and Paul first bought the assets of CART and became Champ Car, there was some discussion that somewhere down the not-too-distant road there would maybe be a switch to a normally aspirated V-10 engine. I know that's kind of the reverse where Formula 1 may be heading. What does this deal do for that possibility or is, indeed, that a possibility somewhere down the road for Champ Car?
KEVIN KALKHOVEN: First of all, we fully expect in the next season we will continue to use the Cosworth XFE engine, which has proven to be so reliable and competitive this year. Of course now with the ownership of Cosworth, we have also some opportunities for us in the future. I think where they will take a little bit of time for us to absorb the full capabilities of what Cosworth has got and feed them into our plans for the future.
But certainly for the 2005 season, the sound of those wonderfully turbocharged XFEs will be resounding through the streets of many North American cities.
Continued in part 2