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Analysis: Kaltenborn remains at the helm as Sauber secures F1 future with new backers

Analysis: Kaltenborn remains at the helm as Sauber secures F1 future with new backers
Jul 20, 2016, 2:57 PM

The Sauber Formula 1 team has been bought by financial investment firm Longbow Finance S.

The Sauber Formula 1 team has been bought by financial investment firm Longbow Finance S.A, it was announced today.

The deal means that Peter Sauber, who founded the team back in the 1970s before entering it entered F1 in 1993, will retire and Longbow Finance’s President and CEO, Pascal Picci, will replace him as chairman. Significantly Monisha Kaltenborn, who was also a shareholder, will continue in her roles as CEO and team principal.

Peter Sauber

The new deal follows years of speculation about the future of the Swiss squad, which has been in financial trouble that resulted in salary payments being paid late to team members.

In a statement unveiling the new arrangement, Longbow Finance said it would, “stabilise the group and create the basis for a competitive and successful future.”

Kaltenborn, who has been working on a deal to secure the team’s presence in F1 in recent months, explained that Sauber, which will stay as the company and racing team’s name, was grateful to Longbow Finance’s for its investment.

She said: “We are very pleased that by reaching an agreement with Longbow Finance S.A., we can secure the future of Sauber at the pinnacle of motorsport. We are convinced that Longbow Finance S.A. is the perfect partner to again make the team competitive and successful in Formula 1.

Monisha Kaltenborn

“At the same time the new structure will allow us to finally further expand our third party business in which we commercialise our know-how. This solution is in the best interest of our employees, partners, loyal suppliers, the base in Hinwil and for the Swiss motorsport.

“We are very grateful that Longbow Finance S.A. believes in the competences, efficiency and capabilities of Sauber Group, and we look forward to a new exciting future.”

Peter Sauber sold the majority of the team’s shares to BMW in 2005, before buying the squad back at the end of 2009 after the German manufacturer pulled out of F1.

Speaking about the new deal, he said: “Monisha Kaltenborn and I yesterday signed an agreement which secures the future of the Formula 1 Team and the Sauber Group.

Felipe Nasr

“I am very happy that my courageous investment to buy the team back, which I made six years ago, with the intention to secure the base in Hinwil and the place in Formula 1 has proved to be correct.”

Picci added: “As a Swiss company, we are very pleased with having secured the future of a Swiss presence in a highly specialized and innovative industry.”

Sauber has endured a difficult first half to the 2016 F1 season. The team has zero points from ten races and it has struggled to escape Q1 for much of the year, as there have been few updates to the C35.

Felipe Nasr

The low point of Sauber’s season so far came at the Monaco Grand Prix when its drivers Marcus Ericsson and Felipe Nasr crashed into each other shortly after team orders had been issued for the pair to swap places.

James Allen's analysis: There have been plenty of potential buyers who have kicked the tyres on the Sauber team since it was rescued by its founder following the BMW withdrawal. These include wealthy individuals like Lawrence Stroll as well as companies like FIAT Chrysler Automobile, whose ambitious chairman Sergio Marchionne wanted to turn the team into Alfa Romeo. One of the sticking points in some cases was believed to be Kaltenborn's position, as she wanted to remain involved.

Another of the main handicaps to a deal was the cost of operating an F1 team in that part of Switzerland, close to Zurich, where wages are amongst the highest in the world. Also the difficulty of attracting the best engineers and technicians to live in Switzerland, far from the UK's F1 silicon valley of the M4/M40 corridor.

At the start of 2015 the team ended up in court when Giedo van der Garde claimed he was owed a drive, with backers interested in the team, while in the background Colin Kolles was also waiting to see if he could gain control of the team.

This year has been a huge struggle financially, with relatively modest prize money of around €60m from F1 Management and sponsorship income from Marcus Ericsson and Felipe Nasr in the region of €30m. A recent injection of cash, believed to be from one of Ericsson's backers, settled some debts and paid the salaries and kept the team going until the Longbow deal could be done.

One of Sauber's strengths is the wind tunnel it owns in Hinwil, which is rented by clients including Audi. It is a 100% wind tunnel which operates at 60% for F1 purposes as per the rules, but which is large enough to fit two transit vans one in front of the other. The exploitation of this and other automotive services is part of what Longbow sees as the potential of the business.

But the first order priority will be to score some points as the team trails in 11th place in the Constructor's Championship after Pascal Wehrlein's single point for Manor in Austria. If Sauber are outside the top ten at the end of the season it will have significant financial repercussions.

What do you make of the news Sauber has been bought by Longbow Finance? Leave your thoughts in the comment section below or head over to the JAonF1 Facebook page for more discussion.
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Series Formula 1
Drivers Marcus Ericsson
Teams Sauber
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