26/03/2005
FEATURE BY MIKE LAWRENCE
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Minardi was able to make the race in Melbourne having gone through a rigmarole involving back of pit disputes and the ruling of a High Court judge. What a great story it was, with little Paul Stoddart representing the ordinary airline owner, the small nabob, the average plutocrat in the street, and Bernie mocking him for being the boy in the class with the threadbare blazer,
There was much mileage in the story, but I wonder if everything was as it seemed. The future of Formula One is up for grabs. We have Bernie on one side and the GPWC on the other. It reminds me of the FISA/FOCA 'War' of 1979 82. In that affray, the major manufacturers, like Fiat/Ferrari and Renault went with FISA and the likes of McLaren and Williams sided with FOCA (Bernie). That was all about money and how it should be shared while current issue is, er, all about money and how it should be shared.
A curious thing happened during the 'FISA/FOCA War', Ken Tyrrell went bananas. Ken had been in racing for nearly thirty years, as a driver, a team manager and then a team owner and nobody had heard a peep from him. He was affable Uncle Ken, diamond geezer. I wouldn't have wanted to have got on the wrong side of him, but he threw his wobblies behind closed doors. Suddenly Ken was slapping in protests and they tended to be generic. Ken became Protester General for FOCA.
Ken had been going through a lean time financially. He had little sponsorship, but Bernie did not want him to go under because he was a loyal member of FOCA. I am told by one of Ken's friends that he owed Bernie £13 million when it was suggested that he sell his team to British American Tobacco and so Team Tyrrell became BAR.
I was reminded of Ken Tyrrell when I saw what Paul Stoddart was up to in Melbourne. Didn't Bernie put money Minardi's way a couple of years ago? You cannot have 18 cars on the grid, that's in the contract, and nobody wants a couple of teams supplying a third car even if it can't score points. A car can affect the outcome of a race simply by being on the track. Jacques Villeneuve can affect a race just by being in it. Bernie needs Minardi like he once needed Tyrrell, not because it is a major force in the sport, but because Minardi's vote is as good as anyone's.
It seems that Fiat/Ferrari is now firmly behind Bernie, money having passed hands. That means the GPWC is down to BMW, DaimlerChrysler and Renault, though Honda and Toyota are believed to be included on the GPWC side in principle. On the other hand, BMW and DaimlerChrysler do not own racing teams.
Fiat is known to be in deep financial trouble. General Motors, which owns a quarter of the shares has just paid $1.2 billion so it does not have to buy the rest. One of Fiat's options is to sell shares in Ferrari.
That idea has been floated before, but the timing was not right, and it has even been suggested that Fiat would sell shares in a group comprising Alfa Romeo, Ferrari and Maserati.
Until recently, Ferrari owned Maserati, then Fiat bought it. That did not change the everyday running of the two marques, where co-operation is close, the Maserati M12 is almost an open topped Ferrari Enzo with a different body, but it did open the way to selling them separately.
As with many high market brands, Ferrari cars are hugely over priced. The Honda NSX, Porsche 911 Carrera, Noble M12, and others, will all deliver more bangs for your buck. Ferrari production is suppressed in order to maintain exclusivity and the customer pays over the odds to purchase rarity and the prancing horse on the bonnet.
Maserati is, relatively, the mass seller and has been doing a pretty good job. There is, however, a small snag. Maserati currently loses more than £19,000 on every car it sells. There has been massive investment in new plant and machinery but, until those costs are ameliorated, Ferrari/Maserati does not look a great investment. There is also the problem that the traditional philosophy of Ferrari is that road cars are made in order to fund the racing.
Scuderia Ferrari was founded in 1929 as a race car preparation outfit. The first Ferrari car appeared in 1947 and the first serious attempt at a production model came about ten years later with the 250 GT. There had been the odd road car which sold in tiny numbers, and the 250 GT was introduced in 1954, but 1957/8 was the time when the project became serious. Motor racing always been synonymous with Ferrari which leads to a dilemma should shares be sold.
One can imagine many Ferrari owners wanting to buy a few shares in the company' like they might buy a Ferrari watch, but the reality is that most shares will end up in the hands of financial institutions who may question the F1 team's budget. You may be able to argue that F1 is a great way to sell BMWs, but BMW is a very profitable company with no upper limit on its sales. Ferrari production is pegged at around 3,500 cars a year because it is selling not just metal, but exclusivity.
A company like BMW can hope to shift so many thousand more road cars if it is successful in F1. Ferrari has dominated the last five seasons and production has not increased. Maserati outsells Ferrari 5:2, and growing, yet the last time a Maserati car appeared in F1 was in 1960. Financial institutions which find themselves holding Ferrari shares may wonder whether the Scuderia needs to be bleeding money from the company. Bankers, remember, are more likely to own a Porsche than a Ferrari.
In Ferrari, Bernie has signed the best brand in Formula One. Ferrari has a special glamour and the myth has grown up that Formula One is unthinkable without it. That is nonsense. Ferrari was present at Sepang, but Rubens and Michael took no real part in the race. It was a Formula One race without Ferrari and the sky did not fall in. If we look at the history of Ferrari, it has known periods of dominance, but they have been few and far between.
The Scuderia's recent form is really due to the fact that it was able to entice key personnel of the 1990s Benetton team to Italy. Even that came about as result of a one off circumstance. Shell, which has been with Ferrari since 1930, wanted to sink one of its oil rigs in the North Sea. There were protests from people like Greenpeace and Shell's sales slumped, especially in Germany, even though the eco weenies were shown to be wrong and Shell was proved correct.
Shell pumped in massive money to secure Michael Schumacher, Ross Brawn and Rory Byrne and it was money well spent. In many countries everyone working in a Shell filling station wears Ferrari team clothing. One question to ponder, however, is whether Shell will maintain its level of commitment when Michael retires and with him, perhaps, Ross and Rory.
There is no club, team, or individual so big that that they are bigger than the game. If any sport should know that, it is motor racing given the number of drivers who have been killed at the height of their powers. If every driver in F1 announced his retirement tomorrow, we'd be rocked on our heels for, oh, maybe an hour or two, then we'd want to know who was driving what for the rest of the season. Actually, that would arouse more interest and excitement than we poor F1 fans have ever known.
If every current team and engine maker was barred from the beginning of 2006, there would still be a World Championship. In the 1930s Mercedes Benz and Auto Union took Grand Prix racing to new levels. In 1945 motor racing began again with elderly cars that hadn't turned a wheel in six years and with none of the Silver Arrows or any German driver. The sport went ahead because it is bigger than any individual.
Ferrari has always needed motor racing, motor racing has never needed Ferrari or any other team. There was a time when Lotus ruled the roost, but we have just begun the eleventh season without Lotus. BRM had its moments, so did Alfa Romeo, Auto Union, Brabham, Bugatti, Delage, Delahaye, Lancia, Ligier, Maserati, how long do you want the list to be?
Renault came in, Renault left, Renault returned as an engine supplier and now has its own team, and the same is true of Honda. Renault and Honda have both made a difference when they have been in, but the sport has survived their withdrawing.
Ferrari is synonymous with motor racing, but motor racing has never been synonymous with Ferrari, or Lotus, or any team. Having said that, it is a shrewd move by Bernie to sign Ferrari to the Formula One World Championship, mainly because it is the most recognisable brand and sponsorship is sold to the sort of people who believe that brand is important above all else.
When it comes to marketing, they are right and now that Bernie is up against the GPWC, he has a marketing exercise on his hands.
I believe that what we saw in Melbourne with Paul Stoddart, the People's Pauper, may have been part of a conflict which will be part of the coming season, F1 versus GPWC. It will be fought with an intensity which will rival the FISA/FOCA 'War', 1979 82. We probably will not have the public clashes, as when the 1980 Spanish GP lost its World Championship status when the FISA teams arrived only to withdraw from the race, but the politicking behind the scenes will be every bit as intense. This time the numbers are many times higher.
You read it here first. There is going to be blood on the walls before the end of the season. There will be press releases galore, but look for other details and remember that the votes of Minardi, Jordan/Midland and Red Bull have equal weight to Ferrari, McLaren and Williams.
The FISA/FOCA 'War' was about money and how it is distributed. The upcoming conflict is about money and how it is distributed. Follow the money, always follow the money.
To check out previous features from Mike, click here