Austerity comes to Formula One

Just arrived in a rainy and chilly Monaco for what will be a momentous couple of days for the sport.

It's weirdly appropriate that this humbling of F1, the death knell of the era of decadence and excess, should happen in Monaco, which has long symbolised the wealth and glamour, with which F1 is synonymous.

This will be a strange journey for all of us, coming to terms with the new 'austerity F1', but here are a few notes at this early stage.

The teams are presenting their cost cutting ideas to the FIA and on Friday the FIA World Council will vote through some big things which could change F1 forever. Honda's withdrawal has focussed the minds and today's meeting of team principals and Max Mosley was described as amongst the most productive any of the key figures can remember.

The Cosworth engine, which is being proposed as the standard engine, is the 2.4 litre V8 unit Williams used in 2006, which was a pretty good engine. It will have to be adaped to last for three races instead of one.

There are three options the teams can choose from; use the Cosworth, make your own motor based on the Cosworth design, or make your own engine, but have it regulated for power by the FIA/Cosworth.

The problem for Ferrari especially, but for Mercedes and BMW and the rest is then one of image, how important is it to have a Ferrari engine in a Ferrari? To me, with Ferrari in particular, it's very important indeed and a red car with a customer engine in it might be too far away from the Ferrari brand, as it is known and loved, for many people to accept. Enzo Ferrari, who put the engine above all other parts of the car in importance, would go spare.

But if they go for the option where they build their own engine and win lots of races, then things in F1 being as they are, there would be dark mutterings that the FIA has not been equalising their engine enough and the playing field will be skewed. No-one needs that.

Maybe, if this plan goes through, they will go for the middle ground, build an engine to a set design and badge it a Ferrari.

One other interesting aspect of this is what will the teams do with the hundreds of employees in their engine factories? Brixworth for example, near Northampton, is home to Mercedes High Performance Engines, formerly Ilmor. If McLaren use a Cosworth then Mercedes will have to lay off the 400 odd workers there and the expertise will be lost. So does that mean F1 will use a standard engine forever, or might Mercedes need those people in the future?

But if you are going to keep people on and make your own engine and it costs, say £20 million a year to do that, you have to be sure you can justify that expense when you could have a Cosworth for less than £5 million a year. It's quite hard to justify that spend, when there is no chance of getting a performance advantage from the engine for your £15 million spend. You'd be doing it because of your brand, but that money could be used to make the car go faster in other areas.