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Mosley's response to Montezemolo

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Mosley's response to Montezemolo
May 1, 2009, 10:10 AM

In response to the letter Ferrari president Luca di Montezemolo wrote on April 28th to the FIA president expressing concern about having two classe...

In response to the letter Ferrari president Luca di Montezemolo wrote on April 28th to the FIA president expressing concern about having two classes of F1 car and about a possible legal challenge to the budget cap, Max Mosley wrote back the following day.

He quotes FIAT boss Sergio Marchionne, with whom Montezemolo works closely and his belief that in an economic crisis such as we are in at the moment, only an extreme response will do,

"We are just going to slam the brakes on, cut everything back to essentials. It may be painful, it may be ugly. But if we want to do the right thing for this industry let's do it now. Today my gut instinct is to be truly Draconian." These are Marchionne's words.

Mosley's letter to Ferrari

Mosley points out that the car industry is in serious difficulty and that F1, as an extension of it, is extremely vulnerable. Honda's departure was a wake up call and another manufacturer could leave at any moment.

"If we are to reduce the risk of the Formula 1 world championship collapsing, we have to allow new teams in. We also have to reduce costs drastically. The matter is therefore extremely urgent."

Responding to Montezemolo's legal threat over rights that have not been respected Mosley writes,

"The only radical elements are those needed to close the gap that would otherwise exist between a low-budget team and other competitors. Thus if Ferrari chooses to continue with an unrestricted budget, the new regulations will not deprive Ferrari of any rights...I do not accept that these proposed regulation compromise any commitment that has been given to Ferrari in the past, unless Ferrari would somehow argue that it is entitled to prevent new competitors from emerging at a time when the sport itself is in danger."

He ends with a flourish, "We are confident (as are our accountants and lawyers) that a budget cap will be enforceable. The cleverest team will win and we would eliminate the need for depressing restrictions on technology, which the existing teams are discussing with a view to reducing costs. I hope Ferrari will take the lead in agreeing the cost cap mechanism, thus freeing its engineers to work and preserving its shareholders' money."

Mosley has always wanted three things; to see the playing field levelled so small teams can compete with big teams, to have full grids and he has always felt that the costs were out of control, long before the credit crunch hit the global economy.

What he has done here, along with his technical strategy guru Tony Purnell, is to take advantage of the car industry's troubles to create a window for killing those three birds with one stone. The two class F1 is not ideal for anyone, but Mosley is calculating that no manufacturer will go for the uncapped option it because it would be unjustifiable to shareholders.

Meanwhile the five independent teams, Williams, Red Bull, Toro Rosso, Brawn and Force India all welcome the budget cap at the £40 million level because to them it means survival, profit and the chance to compete against the big boys. It's Christmas for them.

The teams formed their association, FOTA, to represent their rights, but here FOTA is in big trouble because the five independents are on a collision course with the manufacturers, so Max has also achieved a fourth aim, to undermine FOTA.

Many people dislike his methods, but think about it this way, if F1 didn't exist and you were Ferrari or any other manufacturer and someone came to you and said, "I've got a great idea for a racing series; we'll have 17 races in key markets around the world, great TV package giving your brand a media value in the hundreds of millions per year and it will cost £40 million and it capped, so you can innovate within that figure and beat the others."

I'm sure if you started with a clean sheet of paper, in other words, you might well go for it on that basis. But it's hard to see the Mosley/Purnell vision for F1 because we come from an era of £200 million budgets. But why does it need to cost £200 million to win?

Shouldn't Ferrari continue to win races? If you have something very good and you distill it to its core strengths, you end up with something sensational. So surely the 350 best people at Ferrari must be the equal or better of the 350 at any of the other teams?

One of my readers, Martin Samm, made this very valid point today,

"What I (as a member of Joe Public) want is a series of interesting/exciting races - I dont care if they spent 40 million or 200 million, as I’m sure they’ll be as cutting edge as ever regardless; engineers tend to be cunning like that!"

Martin also points out this is all happening at a time when races are being won by two independent teams, Brawn and Red Bull. Most people find this very refreshing and a good thing for F1.

It's really hard to know which way to go on this one, because it represents a huge cultural shift in F1. You can see Ferrari's point and they believe that they have right - and the law - on their side.

The way is clear for a summer of messy legal challenges, which would throw 2010 into chaos. Ferrari will not go quietly on this one and they have gathered the other manufacturers around them for a council of war. They make the engines, of course, so the independents are dependent on them.

That is why Cosworth is sitting on the sidelines, waiting.
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