McLaren Coup – Dennis issued an ultimatum by shareholders go or be pushed

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Ron Dennis will be told by shareholders today that he must resign or he will be will be removed by them. Dennis has been told that he must give up his position as chairman and chief executive of the McLaren Group.

Dennis has said he is categorically not standing down and last week failed in his bid to get a ruling from the  High Court bid last week to prevent McLaren putting him on ‘gardening leave’ – but is likely to be left with no choice.

The exact nature of his departure is to be decided in talks with shareholders. Dennis owns 25% of the team along with business partner Mansour Ojjeh with the majority shareholder being the Bahraini investment fund Mumtalakat. Mumtalakat and Ojjeh have been trying to oust Dennis following a fall out.

Dennis’s departure would be the biggest coup in modern F1, as he has been a key figure in the team for thirty five years. Under Dennis there has been many domination periods by the team, including the tension between Alain Prost and Ayrton Senna.

Including Prost and Senna the team has taken ten drivers titles with Niki Lauda, Mika Hakkinen and Lewis Hamilton and seven constructors’ championships. But recent years have seen a dip even before their decision to switch to Honda there decline was long, with the team failing to win in the last four years.

Dennis has failed to find a title sponsor since 2013, leaving the team looking to Honda for significant financial contribution over and above the provision of free power units. This has also lead to fears that he is unable to procure major sponsorship contracts in the digital age.

The downfall of the team co-insides with the departures of there ‘lead driver’ Lewis Hamilton after twenty years and Paddy Lowe who both left for engine supplier Mercedes. This has seen them win three constructors and see Hamilton have a slim chance of his fourth title in just under a fortnight’s time.

BBC News understands that Zak Brown a leading figure in F1 is likely to replace him. But he has been linked to a Liberty Media job who are taking over the sports commercial rights next year. Sources close to Brown say he more likely at this stage to accept the McLaren offer but has not made a final decision.

Should Dennis go it would also cast doubts over the future of new CEO Jost Capito who joined officially in September.

Dennis’s long career

Dennis has been in Motorsports since the late 60’s first under F1 CEO Berine Ecclestone. Many off these people Charlie Whiting and Herbie Blash have gone onto work in the management of the sport. He left F1 for a few seasons joining Mclaren in 1981.

Within eighteen months he had done a ‘reverse takeover’ and gained a controlling stake in the group. Ojjeh joined Dennis as a McLaren shareholder in 1984 and has been his business partner ever since.

That year the team took both the drivers and constructors championship with Nik Lauda, who is now the Mercedes non-executive director. Then a dominate period marked with civil war between Ayrton Senna and Alian Prost, saw multiple championships.

Followed by a seven year wait until Mika Hakkien, took two titles at the turn of the century. This market there last constructors championship to date.

It wasn’t until 2007 until they would come close to the constructors, but were disqualified in the Spygate scandal where the team were thrown out of the championship and fined £49.2m for using information leaked from title rivals Ferrari.

Hamilton took the drivers title the year after for the team. Before another scandal emerged, at the Australian Grand Prix where Hamilton was instructed to lie to the stewards about the events on the last lap. Liegate cost the job of Dave Ryan and the resignation of Dennis from the day to day running of the team.

Dennis returned after staging a coup to topple Martin Whitmarsh is in January 2013 which saw his eventually departure from the group. Ironically the coup while successful, failed to deliver a change in the form and started years of tensions within the board room.

A statement from Dennis read “mandated me to write an exciting new chapter in the story of McLaren, beginning by improving our on-track and off-track performance”.

“Over the coming weeks, I intend to undertake a thorough and objective review of each of our businesses with the intention of optimising every aspect of our existing operations, while identifying new areas of growth that capitalise on our technologies, and where appropriate further investing in them.”

He added “During February, I will articulate a new Group strategy and implement the organisational structure best suited to achieving it.”
There has been no change in the shareholding of the team.

Jack

Jack is responsible for the day-to-day running of Formula One Vault. He brings you all the brilliant content. Has an obsession with all things Formula One and anything with an engine.

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