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Analysis: Alfa Romeo a good F1 hedge as Marchionne ramps up Ferrari rhetoric

Sergio Marchionne was a proud man yesterday to announce the partnership that brings Alfa Romeo back into Formula 1 after 30 years.

Analysis: Alfa Romeo a good F1 hedge as Marchionne ramps up Ferrari rhetoric

Sergio Marchionne was a proud man yesterday to announce the partnership that brings Alfa Romeo back into Formula 1 after 30 years.

Initially he indicated it would be until 2020-21, and he reiterated his threat to pull Ferrari out of Formula 1 - and Sauber too - if Liberty Media and the FIA go down the wrong route with the sport's regulations. He did so very consciously with both F1's Chase Carey and FIA president Jean Todt sitting in the room.

Alfa back in the F1 game

The Alfa deal is good business for Marchionne; he first floated the idea of bringing the marque back into F1 in 2015 and subsequently had a good look at buying the Swiss team.

That co-incided with the flotation of Ferrari on the New York Stock Exchange and other important priorities and in the end Longbow Finance bought the team.

They have connections with Marcus Ericsson, which is why he retains his seat with the team alongside Charles Leclerc, who looks the most exciting driver to come through to F1 from F2 (formerly GP2) since Lewis Hamilton in 2007.

The deal that Marchionne has done with Sauber's owners is far less costly and involved for FIAT than buying the team and as well as the marketing benefits, it provides a hedge against several ways things could go politically in F1 with Ferrari and Liberty Media. The sphere of influence has grown to three Ferrari teams, just as Mercedes also influences three teams in F1. Sauber would benefit enormously from the kinds of changes Carey would like to make to F1, but it now has a strong man steering the ship and it is less likely to lead to the 'wrong' outcome for the big players.

It works very well for both sides and this team surely now is Ferrari's closest alliance, edging out Haas F1, which buys as much of its F1 technology from Ferrari as the rules allow, but which hasn't played ball on drivers.

Marchionne can paint the Saubers red and white and dominate the branding of the car, supply latest spec engines and other technology and place his most promising drivers, with 23 year old Antonio Giovinazzi lined up as reserve and Friday practice driver, likely to convert that to a race seat for 2019.

"We will find space for him," said Marchionne. Ericsson is on notice.

It's more economical than buying Sauber - title sponsorship of a team at that level is probably of the order of £10-20 million with the engine supply thrown in. For 2018 the engines will be badged Ferrari but after that it will be reviewed.

Also part of the deal are the gearboxes and elements of the rear end of the car, similar to Force India's deal with Mercedes.

What will be interesting will be what the media, commentators and fans will call the cars. Will they call them Saubers or Alfa Romeos? Benetton and more recently Red Bull were very clever with that, putting the consumer brand into the title of the cars so they get referred to constantly.

Either way, this makes perfect sense for FIAT and Ferrari and for Sauber.

Marchionne has done a lot lately to reinvent the Alfa Romeo brand on the road, with exciting models like the Giulia and the Stelvio and the F1 connection gives a youthful, sporty sheen to the brand.

Renewed threat to pull Ferrari out of F1

Marchionne underlined his threat about Ferrari quitting F1, after prospective engine regulations for post 2020 were announced a few weeks ago.

"The dialogue has started and will continue to evolve," Marchionne said. "We have time until 2020 to find a solution which benefits Ferrari. The threat of Ferrari leaving Formula One is serious. The agreement with Sauber expires in 2020-2021, right when Ferrari could leave.

"We have to find a solution which is good for the sport but we also have to be clear on the things we can't back down on."

Mercedes also has a route out of the sport on the same basis and it's not impossible to imagine one or both doing that.

The key for Chase Carey and Liberty Media is not to make Marchionne and his colleagues emotional about this situation. Carey has faced down many great captains of industry in the past and is underestimated by many in F1 who are still working out what he is made of.

Carey played the diplomatic card, standing in the Alfa museum and clearly getting the message, saying that he wants to simplify the competition, not to devalue it, with cheaper, noisier engines. The budget cap is another sticking point, which Marchionne considers impossible to police. And then there is Ferrari's free $100m bonus every season, which was negotiated between former Chairman Luca di Montezemolo and Bernie Ecclestone.

Montezemolo has been largely airbrushed out of Ferrari's history recently, but that was one deal that has a strong legacy.

What do you make of this Alfa Romeo story? How much of a boost is it for Sauber? Leave your comments in the section below
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