31/10/2015
NEWS STORY
Ferrari boss Maurizio Arrivabene has defended his team's decision to veto plans to cost cap engine prices, a move revealed by the FIA earlier this week.
On Monday, the FIA revealed that at the last Strategy Group meeting, in association with FOM, it had suggested setting a maximum price for engine and gearboxes for client teams. While the proposal was "adopted with a large majority", Ferrari used its "right of veto long recognised under agreements governing F1" to kill the idea.
Opting not to mount a legal challenge the FIA is instead tendering for an independent customer engine for 2017, the cost of which will be "much lower than the current power unit".
Speaking in Mexico, Arrivabene defended his team's decision.
"It is quite easy," said the Italian. "We exercised our veto in compliance with our legitimate commercial right to do business as a powertrain manufacturer. There's nothing to add.
Asked to "morally" justify this position at a time teams are struggling, the Italian said: "I repeat it. I have to repeat again. The rules are done by the Federation and it's fine but we just exercise our commercial right as a powertrain manufacturer. This is the reason why.
"Why do we have to justify it more?" he continued. "Here we are talking about commercial right. We are not talking about budget, we are not talking about anything else.
"If somebody, they are asking you, they give you a specification to produce apple, OK you produce apple in line with the specification. That somebody, they're asking you, OK, we want to impose you the price of the apple', what are you going to do? This is the principle. It has nothing to do with the rest."
Asked for his opinion on the move, Mercedes Motorsport boss, Toto Wolff said: "This is obviously a very controversial topic and, as with many things, black and white is not the answer.
"There is a set of rules which were implemented in Formula One two years ago and we started developing those engines three, four, five years ago, based on that set of rules. As large corporations we work on long-term planning. It is part of the budget process. It is part of the R&D process. From that standpoint, part of it is a business case and you need to calculate how much you can charge for those engines, how much you can recover for those engines. Ferrari is a public company now, so it is difficult as a commercial entity to just be confronted with the situation where price is being imposed. It somehow takes away the commercial ability of refinancing.
"Now, you can say, for a large organisation it doesn't matter: a couple of millions don't matter - but they do. It's how we are being set up, the constant always trying to improve your result and optimise your organisation - which is why it's a discussion I think we should have behind closed doors.
"I think it is very important to understand the financial constraints of some of the smaller teams and we remain committed to cost reductions. It's not like the big teams are stubborn and say "well, we don't want to hear anything of that." This is a platform that functions with all of us. We are not just running fronting it and saying we don't care what happens behind us or aside of us. You need to balance that.
"I think Ferrari's first reaction - and excuse me Maurizio that I'm talking for you in that case - is the imposing ways are very difficult to cope for a commercially-oriented entity. I can understand Ferrari's standpoint and I can also understand it's a very controversial and difficult situation for some of the smaller teams, and of course how it's being brought forward, it doesn't look very neat - but there is a much more to it than just a sheer veto and saying "no, we don't want to have the discussion," because that's not how it was."
"My answer was only concerned to the reason we applied the veto," said Arrivabene. "For the rest I totally agree with veto. It is not a position against the other team. It is a decision that is defending a commercial principle.
"For the rest we are open to finding any other solution," he continued. "As Toto explained, you have in a public company, as we are now, but also in a company as Mercedes is, you have research and development costs that somehow you have to recover. I don't find any commercial entity all around the world that is giving their product out to the market for free - or at cost. So this is the principle."
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