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BMW pulls out, but team should survive

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BMW pulls out, but team should survive
Jul 29, 2009, 11:16 AM

BMW today became the second major manufacturer to quit Formula 1 in eight months.

BMW today became the second major manufacturer to quit Formula 1 in eight months. I never much liked the way they went about their racing, being too focussed on corporate targets and not enough on racing. But I see no reason why the team, based in Hinwil should not be on the grid next year in a new guise.

BMW

The timing of the BMW board's decision was motivated by the imminent need for a signature on the new Concorde Agreement. It has been agreed between all parties and was simply awaiting main board approval from two manufacturers, one of whom was BMW.

That approval was not forthcoming and so they have been forced to withdraw now rather than commit themselves to the sport until the end of 2012. It remains to be seen if another manufacturer will feel unable to make such a commitment. Toyota moved this evening to make it clear that they will not follow in BMW's wake, "Through cost reduction we will continue our Formula 1 activities. Our situation remains unchanged, " said a statement.

In some ways it is a shock in other ways not. BMW, along with Toyota and Renault, were frequently cited as manufacturers whose long term commitment to the sport was questionable. FIA president Max Mosley has been warning for some time that the sport could not be allowed to live at the whim of manufacturers who come and go as it suits them and needs new teams to ensure its stability.

The obvious answer as to how to achieve this was to cut the costs of competing dramatically. His chosen route of an enforced budget cap, almost brought about the destruction of the sport with a walkout from eight teams, but in the end a compromise has been reached with a legally binding agreement between teams to keep costs at around £80 million next year and £40 million the year after.

With commercial revenues from the sport and from sponsors far exceeding this figure, teams are set to become profit centres rather than cost centres and so one has to look at the decisions to withdraw today as not being primarily about economics. It's about damage to the BMW brand from performing so poorly this year and possibly some disillusionment about the way the sport has been managed.

Results played a significant part in it; the team was on an impressive upward curve in 2006- 2008, but I always thought that they bottled it last year, choosing to work on the 2009 car once they had achieved their 2008 targets of a first win and third in the constructors' championship, rather than throw the kitchen sink at trying to win the title with Kubica. They had the chance; Ferrari and McLaren were making lots of mistakes.

That was not the decision of a racer, rather of a corporate entity too focussed on 'targets' and now with the results frankly embarrassing, they have pulled the plug.

"It only took us three years to establish ourselves as a top team," said Klaus Draeger, one of the BMW board members. "Unfortunately, we were unable to meet expectations in the current season."

This outcome is a huge personal failure for Mario Theissen, the team principal, who steered BMW away from an engine supply deal with Williams and into running its own team. It shows the pressure he must have been under from the board to get results and why he played it so cautiously over the last few years, focussing on targets all the time,

"Of course, we, the employees in Hinwil and Munich, would all have liked to continue this ambitious campaign and show that this season was just a hiccup following three successful years," he said. "But I can understand why this decision was made from a corporate perspective. We will now focus sharply on the remaining races and demonstrate our fighting spirit and put in a good result as we bid farewell to Formula 1 racing."

Peter Sauber is the man who must be hurting the most. I interviewed him in the early 2000s and he said that his main objective was to secure the future for his employees. He chose BMW because he believed in their stability and long term commitment.

I always wondered why the team remained "BMW Sauber" and he retained his shareholding, and now I wonder whether he might 'do a Ross Brawn' and take over the team for one Euro with a budget for 2010 to get them going. The sport would retain an important team and Sauber would be able to operate on £40 million a year going forward. The circumstances for such a move are far less risky now than they were for Brawn over the winter, with far more certainty of what F1 will cost.

Sauber is not a young man and BMW is likely to be able to sell the team to a new investor, once the Concorde Agreement is signed, it looks like a good business opportunity. But if it doesn't go that route, that in my view it owes it to the sport to set Sauber up in the same way as Honda set Brawn up and let the racing continue.

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