Williams considers selling team
Williams is considering selling its Formula One team and group entire company group after posting a £13m loss last year. The decision marks a major change in policy for a company whose founder, Sir Frank Williams, had always insisted on retaining control.
Deputy team principal Claire Williams told BBC News, “Frank has always ensured he puts the team, business and our people first, and that’s what we’re doing now.” Ms Williams, who runs the team on a daily basis, says the teams her father is aware of the decision and is supportive.
She added, “He wants to ensure the future success of his team and understands and agrees this is the right time to seek inward investment to achieve that.”
The statement said there were “various strategic options” not limited to raising new capital for the group, including divestments “of a minority stake in Williams Grand Prix Holdings, or divestment of a majority stake in WGPH including a potential sale of the whole company”.
It said the company was “not in receipt of any approaches at the time of this announcement” but said it was “in preliminary discussions with a small number of parties regarding a potential investment”.
Ms Williams says that the move will be completed in the next four months stressing that the team remains funded for the rest of the year. The move comes in the wake of Williams finishing last in the constructors’ championship for the second year in succession in 2019, leading to a significant drop in income.
She said she believed the introduction of a budget cap from 2021 and new regulations aimed at levelling the field from 2022 made the team an attractive opportunity. Ms Williams insisted that there was
Adding she was “very confident about this team’s future and our ability to succeed in our sport again because the environment in which we can compete is changing.”
F1 is facing a significant loss of income as a result of the lack of racing this year, with all major revenue streams under threat.
Dutch GP organisers confirm cancellation
Organisers of the Dutch Grand Prix have announced this year’s race has been cancelled and its return to the calendar has been postponed until 2021.
The race was returning to the calendar for the first time in thirty-five years on 01 – 03 May, which made it one of the first to be postponed due to the Coronavirus. There is no surprise after the race didn’t appear on the revised provisional calendar.
Organisers confirmed on Thursday morning that it was “no longer possible to hold a race with fans present this year”. The race is returning to the calendar for the first time since 1985.
Jan Lammers, the race’s sports director and former F1 driver, said “We were completely ready for this first race and we still are. An unbelievable achievement has been made thanks to all the fans, the companies and the governments involved.”
“We and Formula 1 have investigated the potential to hold a rescheduled race this year without spectators, but we would like to celebrate this moment, the return of Formula 1 in Zandvoort, together with our racing fans in the Netherlands.”
Coronavirus hits McLaren’s Q1 results
McLaren Group’s quarterly results have taken a hit even though the full effects of the coronavirus are yet to be felt. The Q1 results saw the group’s revenue drop from £284m to £109m in the first three months of 2020, with a loss of £81m in the same period last year.
Most of the drop in income was due to reduced sales at Automotive, with sales down from 953 cars to 307. However, there is a current order book of 993, with around 50% representing limited series models with higher margins.
McLaren Racing’s revenue was down by £4.4m for a period that saw the Australian and Bahrain Grand Prix’s postponed, and F1’s revenue’s badly hit, which in turn meant reduced payments to teams.
However, the team’s income was boosted by selling three heritage cars for £5.1m, an event that was not repeated this year. However, some of the revenue loss was offset by £4.1m of increased sponsorship. The Applied division was £5.8m down, because “two large non-recurring projects” were completed in 2019.
These figures don’t include the period when it was forced to close its dealerships and shutdown of F1.
McLaren remains bullish about the future, noting that it “has rapidly put in place cost-saving measures to reduce labour cost and reduce operating leverage. Other cost rationalisation measures include reduction in marketing and events spend, motorsports and travel”.
Last week it announced plans to dramatically cut staffing levels, with the racing team expected to be trimmed by seventy.
The company has made no secret of its search for new funding, noting that it “is currently looking at a number of potential financing alternatives, secured and unsecured, of up to £275m equivalent to strengthen its liquidity position. An update will be provided as soon as reasonably practicable”.
Mercedes intends to remain in F1 under Wolff
Mercedes have made it clear they remain fully committed to Formula One as a ‘works team’ and will continue with Toto Wolff as CEO and team principal beyond the end of this season.
Reports in Germany earlier this week suggested that the car giant r was about to wind down its official involvement and sell shares to Aston Martin. The stories also suggested that Wolff had decided to step down from his role as team principal after 2020 and take a non-executive role, similar to that previously held by Niki Lauda.
Daimler, Mercedes parent company, has dismissed the reports saying that they intend to remain in F1 under Wolff. Although, according to Motorsport.com, Wolff hasn’t decided what position he would want to take in the future.
Options could include continuing running the team like now, taking a more senior position and handing over to someone else, or beginning a transition phase to find a replacement. While no decision on Wolff’s exact role hasn’t been finalised, but he will retain a senior executive position at the F1 team.
A statement from Mercedes said, “Speculation regarding a potential withdrawal from Formula One continues to be unfounded and irresponsible. The sport has taken the right measures to address the consequences of the COVID-19 pandemic and its future financial sustainability, and we welcome these steps.”
“It is our clear intention to continue competing in Formula One as a Mercedes-Benz works team in the years to come, and to do so with our managing partner Toto Wolff.” Wolff’s contract with the team is due to expire at the end of the year.
Those talks to renew his contract has been put on hold, as the team and manufacturer navigate its way through the coronavirus pandemic.
One possibility is for Wolff to remain as team principal but step back from such an intense schedule by not attending all races. Wolff missed his first race in six years when he did not attend last year’s Brazilian Grand Prix. His on-the-ground duties were taken over by technical director James Allison.
The news backs up the claims made last month by Mercedes that despite a personal investment in Aston Martin, Wolff remains committed to the F1 team and its motorsport division.
The German manufacturer also supplies engines to the Racing Point and Williams teams and will bring McLaren on board as a third customer team from 2021.
Renault remain committed despite cuts to core business
Renault has announced it remains committed to its future in Formula One despite making cuts in its core business. The global car industry has been hit hard by the slowdown in sales caused by the Coronavirus, with it making 15,000 job cuts worldwide, including 4,600, as part of an effort to save €2bn over the next three years.
The review comes at a difficult time for Renault, with the continuing fallout of the scandal involving its former CEO Carlos Ghosn and the ousting of his replacement Thierry Bollore. This put focus on the F1 team, which along with the rest of the company has been subject to a review over recent months.
The timing of the end of the current Concorde Agreement this year allowed Renault to reconsider its future, while the lack of any engine customers for 2021 also made it potentially easier for a withdrawal decision to be made.
The 2022 regulation changes and new financial regulations next year, followed by reductions in the following three years has made its decision easier. Acting CEO and chief financial officer Clotilde Delbos has made it clear that the changes are crucial to the company’s decision.
she said in a phone call with analysts on Friday, “We have said publicly and we confirm that we remain committed to Formula One. The announcement of new regulations on spending limits is very good for us because we will have to invest less in this discipline than some of our competitors who spend a lot of money.”
Renault’s F1 managing director and team principal Cyril Abiteboul has made it clear that racing is a key part of the brand. He says “That’s why we believe in it, just like we believe in several marketing activities, except that it’s sport, except that it’s been a core of technology.”
“That’s racing, that’s emotion also, and Renault stands for emotion. So all of that means a lot. And that’s why we’ve been in this for decades and we intend to do so for very long.”
Handicap development curbs to close the gap
Formula One will introduce its first handicap system for aerodynamic development from next year after the FIA signed off on an extensive package of cost-cutting and sporting rules announced by the FIA for forthcoming years.
The move is designed to accelerate by the onset of the coronavirus crisis, this is a significant change to the way F1 regulates development work carried out by teams. For the first time in the sport’s history the bigger teams will have limits on development depending on the success of the team.
The change centres on the amount of time teams will have to develop cars and parts in wind tunnels and on Computational Fluid Dynamics (CFD) systems at their factories. CDF is one of the biggest costs for the teams, as they produce models to test ideas in wind tunnels, twenty-four hours a day.
Already the postponed 2021 regulation changes had cut the amount of wind tunnel, with the teams receiving an amount of time-based on their championship position.
The allocation for the first six months of the year will be based on the results of the previous season’s Constructors’ Championship, while the second half will be formed on where teams stand as of June 30 of that season.
For an example of the regulations were in place this year, Mercedes would run at ninety per cent of its base level (36 runs a week) while Williams who finished last would run at a hundred and twelve per cent (45 runs a week.)
From 2022, the gap between front and back increases, with increments of five per cent. So whereas the first-placed team would be allowed 28 runs per week, the 10th team would have 46.
Essentially, the teams further down the grid will have more time to spend working on designs in the wind tunnel to try and close the competitive gap.
Ricciardo reveals on-off Ferrari talks
Daniel Ricciardo has revealed he has held on-off talks with Ferrari about a race drive for several years but insists he is not dwelling on being overlooked by the Italian team for 2021.
The Australian appeared to be a natural fit to replace Sebastian Vettel when the four-time world champion announced he would leave the team at the end of the year, but by that stage, Ferrari was already closing a deal to sign McLaren’s Carlos Sainz.
Ricciardo then agreed to leave Renault and replace Sainz at McLaren, and within a matter of days, both drivers were announced at their new teams for 2021. Speaking to CNN he revealed that there had been several years about a move but remained vague on why a deal had not come off.
He said “There have been discussions already from a few years back,” he said. “And that continued all the way through to now. So yeah, I won’t deny that. But obviously, it’s never really come to fruition.”
Asked why the talks had not gone further, Ricciardo added: “I don’t know actually and I’ve never really chosen to dive too deep into it. Everyone says it would be a good fit, obviously, with my name and all the background stuff, but yeah, I try not to get emotionally caught up in any kind of situation.”
He says he saw how Sainz fitted into the team, which made him think ‘why not me?’. Ricciardo’s move away from Renault delivered a blow to the manufacturer, having joined at the start of last season, but that he had been in advanced talks with McLaren even before he signed for Renault in 2019.
Adding, “I guess no decision is ever black and white and I can’t actually give you a black and white answer. There wasn’t any moment, which was like a light bulb and said, ‘Yes, that’s what I need to do.’”
“Equally, there wasn’t something I saw in McLaren, which created that or there wasn’t something in Renault, which created the moment of ‘I have to move on.’”