FIA, FOTA say F1 costs will fall by 2009

Formula One sanctioning body the International Automobile Federation (FIA) and Formula One Teams Association (FOTA) issued two cryptic sentences Tuesday after meeting in Geneva to say they have agreed significant costs savings for 2009 and 2010,...

Formula One sanctioning body the International Automobile Federation (FIA) and Formula One Teams Association (FOTA) issued two cryptic sentences Tuesday after meeting in Geneva to say they have agreed significant costs savings for 2009 and 2010, and are working urgently on further proposals for 2010 and beyond.

The statement read in full: "Today's meeting in Geneva has produced significant cost savings for 2009 and 2010. FOTA are working urgently on further proposals for 2010 and thereafter."

The Associated Press reported that team members at the meeting indicated costs of engines made available to independent teams will be capped at $13.2 million. Red Bull (Renault), Scuderia Toro Rosso (Ferrari), Force India (Ferrari), and Williams (Toyota) currently use customer engines.

Amounts teams spend vary widely but average $160 million annually. Annual surveys usually put Ferrari at the top of the spending list at nearly $500 million each year. Ferrari is defending drivers' and constructors' titles. Toyota, reportedly spending $400 million a year, has yet to win a race. Heavily spending teams including Ferrari and McLaren Mercedes employ as many as 1,000 people to design, build and prepare two cars to race. Lower-spending teams employ far fewer people; Toro Rosso employ160 people and race on a much smaller annual budget. Independents such as Williams, Force India and the Red Bull entries, which are not backed by auto manufacturers, are the center of concern regarding costs. Among proposals mooted is one that would cap the number of employees teams hire.

FIA president Max Mosley has been seeking cost reductions in the sport for several months. He said in July the sport was becoming "unsustainable". His proposal to use a single engine supplier was roundly disparaged during the past weekend's Grand Prix of China. Mosley has said he wants to halve the cost of the sport to keep it viable. He told the BBC this month that losing three teams, that is, dropping the number of competitors to 14, would strip the sport of its credibility.

His proposals predate the current global financial crisis, which Mosley said worsens the situation but did not cause it. The money crisis has been felt within the sport. The promoter of the French Grand Prix, the FFSA (Federation Francaise du Sport) withdrew its support from the 2009 race last week. The Canadian Grand Prix also was dropped from the 2009 calendar this month, reportedly as a result of financial difficulties. The Royal Bank of Scotland, major sponsor of Williams F1, took a $33 billion bailout from and ceded control to the British government. Renault title sponsor ING was given a $13.4 billion bailout by the Dutch government Sunday.

Ferrari president and Fiat chairman Luca di Montezemelo heads FOTA, the body formed this season to represent the 10 teams in the sport. He and John Howett of Toyota represented teams in Geneva. Despite the vulnerability associated with independent teams, Adam Parr, chief executive for privateer Williams F1, told the BBC this month that a carmaker-backed team might have to drop out. He did not offer names. Williams reported a loss of $42 million in 2006.

Ferrari, BMW Sauber, Honda, Toyota, McLaren Mercedes and Renault are factory-backed teams. Red Bull and Scuderia Toro Rosso have the backing of drinks billionaire Deiter Mateschitz. Mateschitz announced his half of Toro Rosso was for sale after rules makers had a change of heart about customer cars -- first they were to be allowed then not -- although the Austrian has since reconsidered. That decision could change yet again. First-year team Force India has the backing of Indian billionaire Vijay Mallya, chairman of Kingfisher Airlines.and United Breweries Group. Super Aguri went out of business earlier this season when its main backer, Honda, withdrew support. Team principals expressed concern over dropping of the Canadian Grand Prix, which leaves North America, major market for most teams' sponsors, without a race.

FOTA and the FIA will meet again at the time of the season's final race, in Brazil the first weekend in November. The 2009 season is scheduled to begin March 29 in Australia.

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About this article
Series Formula 1
Drivers Adam Parr
Teams Ferrari , Mercedes , Sauber , McLaren , Force India , Toro Rosso , Williams