Dear Luca

Cost Cutting

Following Charlie's email of 3 January, I feel it may be useful to set out the current position as we see it.

A few general points

First, even before the current crisis, Formula One was not viable. Costs have been so high that we have had vacancies in the Championship for some time. Secondly, it is impossible to cut costs substantially without significant change. Inevitably, cherished projects, facilities and sadly even people have to go. Thirdly, the fact of having recently invested in an expensive facility is not an argument for retaining it. That money has been spent. It's gone. What we have to avoid is forcing others to spend the same money in order to keep up. Fourthly, there is no rational argument to support the continued use in Formula One of expensive technologies which have no relevance outside the sport and are unknown (and thus of no interest) to the general public.

Specifics

2009

The changes to the 2009 Regulations agreed at the December 10 meeting will help a lot. We need detailed proposals on some aspects, particularly the 8 hour/5 day restriction on wind tunnel use (which we understand was agreed among the teams) if we are to enforce this as a regulation, but much is already in place.

We are ready to agree further cost-saving measures for 2009 if these have the agreement of all the teams.

2010

The really big changes come in 2010.

Engine

The rev limit will be reduced to 17,000 for 2010 and thereafter

Retuning will be limited to, at most, trumpets and injectors (position only), except that Cosworth, having missed out on the last retune, will be allowed to make general changes within a limited budget

Engines remain completely frozen until 2013, as already agreed

Testing will be limited to 15,000km per year, Friday testing included

On this basis, Cosworth will be able to supply competitive engines from 2010 for well under €5m per season per team, including all on-track support, provided they have firm orders to supply at least three teams within the next week or two;

The present regulations will remain in force, so there will be no interference with any existing arrangement for the supply of engines. Furthermore, the reduction to 17,000 rpm will allow additional cost savings for current engine suppliers.

Transmission

We intend to make it a condition of entry to the 2010 Championship that a team has made an arrangement with XR for the supply of the standard gearbox in accordance with XR's tender. We appreciate that some teams would like to continue with their current arrangements and/or use standard internals, but the fully standard gearbox is an obvious way to save very significant sums without affecting any useful aspect of Formula One. In order to eliminate the difficulties of the interaction of the casing with the underbody, we will also require a standard underbody. Again, this will have no impact on the spectacle but will save even more money and eliminate certain scrutineering problems.

Chassis

We will shortly produce a list of chassis parts and systems which, from 2010 onwards, will be the only elements of the chassis which can be developed. All remaining chassis elements will be either standard or frozen. We wish to develop this list in consultation with FOTA but it must be understood that it will involve a radical curtailment of R&D in respect of the chassis and hence a very significant reduction in costs. If carefully thought through, it should also reduce the need for the use of wind tunnels, CFD and simulators.

Race Weekend

We should like FOTA to make proposals to reduce further the costs of the race weekend, always on the basis that priority should be given to cost savings in areas which are invisible to the public and have no safety implications.