F1 can't take Haas's presence for granted

Amid all the talk of Formula 1 rules changes for 2021 it's easy to overlook one very important fact. As there is no new Concorde Agreement, or whatever its future replacement might be called, none of the teams are formally committed to the championship beyond the end of next season - and so there's no guarantee that there will still be 20 cars on the grid.

Whether the decision to ultimately sign up for 2021 is made by an unsentimental board of directors with an eye on the bottom line or a mega wealthy individual who is involved largely because of personal enthusiasm, any call on remaining in F1 has to make financial sense.

A decade ago Honda, Toyota and BMW all pulled the plug when the economic tide turned, while the likes of Tony Fernandes and Vijay Mallya, who pumped millions into F1 essentially because they were fans, are no longer around.

One man who has to make a call in the coming months on his future participation in F1 is Gene Haas - and Liberty Media has to be careful, because there's no guarantee that he will decide to extend his involvement beyond next season.

The American machine tool maker entered F1 in 2016 with a unique strategy of using as much Ferrari technology as the rules allow, while employing the minimum number of full-time staff.

His eponymous team has experienced something of a rollercoaster ride, and a difficult 2019 season is giving him food for thought as we head towards the new era of 2021 and beyond.

"I think we just have to kind of look at all the facts going forward," he says. "Is this a viable business model? Ultimately you don't run a business to lose money. If we can't get the proper funding, from F1 or sponsors, it can have a negative impact.

"I wouldn't say that's the problem today, but who knows down the road? At some point businesses do need to make money."

A title winner in the highly competitive world of NASCAR, Haas didn't enter F1 just to make up the numbers. He did it to gain global exposure for his brand, while demonstrating a competitive performance on track, and doing it at a sensible cost.

"The sponsorship thing was a major distraction. But it looks like it's smoothing out, so hopefully that will be put behind us" Gene Haas

On the positive side, the first three years featured continual progress.

After finishing eighth in the constructors' championship and earning 29 points in its debut season in 2016, his team claimed 47 points in '17, albeit with the same position in the standings.

Last year produced a jump to 93 points and fifth place, although the result was artificially boosted one spot in the final rankings by Force India forfeiting its score from the first half of the season.

In 2019 Haas has lost that upward momentum. So far it has scored just 26 points, compared with 66 at the same stage last season, and it lies ninth in the world championship - ahead of only Williams.

To be fair, one good result could lead to Haas leapfrogging Racing Point and Alfa Romeo in the tight midfield battle, so all is not lost. Nevertheless, fighting for seventh and eighth is not where its owner wants to be, especially with the ongoing saga of title sponsor Rich Energy having a negative impact.

"The sponsorship thing was a major distraction," Haas admits. "But it looks like it's smoothing out, so hopefully that will be put behind us.

"The bigger problem is just getting the performance out of the car.

"We've tried a lot of different things, working with suspension, ride heights, all the mechanical stuff, and it doesn't seem to make that big a difference. It really fundamentally comes down to the aero.

"And then when we started doing this test between the beginning set-up and the upgrade one, we didn't really find much difference. It's kind of like saying the direction we're going in aero as far as adding little bits and pieces doesn't seem to have any real effect on the performance of the car.

"The tyres are so unpredictable. One day you get a certain performance out of them, and the next day it changes a few degrees, and the tyre characteristics between the medium, soft and hard just completely reverse themselves.

"We're not able to predict that, and it's just very frustrating. It seems like some teams have been better at it than others.

"We suffer a lot, but even our provider at Ferrari, they're having a hard time too. Even if we were as fast as Ferrari we'd still be a second off the leaders [in Hungary]."

That Ferrari reference is significant. It's perhaps no surprise that Haas's performance is index-linked to that of its partner, given that so much Maranello technology is shared. In 2018 the red cars were regular pacesetters, and that form trickled down to Haas. This year, Ferrari has fallen away from its targets and so has Haas.

Tension between drivers Romain Grosjean and Kevin Magnussen has provided another headache for Haas and, with Grosjean heading out of contract, there have been questions about the future line-up.

"There's a lot of publicity about that, obviously," says Haas. "At Silverstone they took each other out, that wasn't good.

"It's kind of funny, everybody else when they bump tyres, and the tyres are rotating at the same speed, they just bounce off each other.

"Romain's made some bad calls, some mistakes. He gets yelled at for it! So he's got that as a negative.

"The problem fundamentally is the car is not right. At the end of the day both of our drivers typically are right next to each other, so it's kind of telling you that it's not necessarily the drivers, it's got to be something in the car.

"The variables with the car, and with the tyres, that's what's causing the problem. I wouldn't sit there and say one driver is significantly better or worse than the other at the moment, because we can't tell. The car is too unpredictable.

"The point is when we're out on the track, we're not going forward. We're trying to hold on. We make any mistakes, we lose positions. Some of the better teams are always out there gaining spots. We get a good qualifying spot and we're afraid of losing those positions as races progress."

Haas really does have to consider if staying in F1 still makes sense

On track results are tied directly to financial performance, in that they determine next year's prize fund income from the F1 organisation.

Haas had to complete an apprenticeship in order to earn a decent slice of the pie. The problem is that the cost of remaining competitive has continued to rise and, even with more prize money income, and an outside title sponsor, the team owner has continued to pump money in just to keep up. Not surprisingly he has kept a close eye on what the future regulations will mean.

"I guess the concern with 2021 is whatever changes they come up with, how much is that going to cost us? Every time they make changes it costs $20m, $30m, $40m to implement those changes. They keep saying that they want to save us money, and yet they seem to be very swayed to make changes, 'Let's have refuelling, let's make the races more interesting.'

"If the changes cost each team $25m, that doesn't bother Ferrari or Mercedes, but it will bother us. So that's an issue. And the problem is that the guys at the back, we don't have the clout that the guys at the front have, so we have to figure out how to make this all work.

"If it becomes too much of a financial burden I guess we just go out of existence."

That's a clear confirmation that Haas really does have to consider if staying in F1 still makes sense.

"In the United States companies are expected to make money, if they don't make money they're not considered companies," he says. "That's something that we've got to be aware of, you can't just run a business at a loss forever.

"Our initial goal was to give ourselves five years, and see can we make this a profitable business. And part of that is revenue from F1 and sponsorships, and contributions for advertising by Haas."

In other words if Haas has to put in $50m of his company's money each year to supplement any prize money and outside sponsorship, he has to see a return in terms of exposure and marketing benefits that justifies that figure.

"Yes, and it's a little more complicated that that," he admits. "If I was just to give money to another team that I didn't own that's different than owning a team, so we have to even be more strict with ourselves with the value of advertising.

"So put all that together, does that give us a bottom line that makes sense? That's what we do in NASCAR, that's what we do here. I think we have to look at those numbers and see how far off we are.

"Businesses do need to make money, I'm not going to deny that, and that was one of our goals in this business of F1, to prove that with our business model, and not having all our own plant and equipment, that we could make a reasonable profit at this."

So has being involved in F1 worked for his brand so far?

"From a personal standpoint it's raised the awareness of Haas Automation. I had some reporter from Brussels come out and say we knew you had a building out there, and we see Haas on it, we never knew who you were, now we know who you are.

"So it does work, it does give us a lot of recognition. Our sales are up and down, but the machine tool business is a difficult business, as most businesses are.

"The difficult one is trying to put value on it, and saying how much value does it add?

"I think it adds a lot of value, it also creates a certain mystique to our machine tool business. We have customers coming wearing the Haas logo, we bring new customers - it works for our business.

"Does that justify it from a financial standpoint? That is a problem."

"F1's biggest problem is that if a new entrant comes in, how do they start a team? It's like trying to grow an oak tree without a seed. It's very difficult" Gene Haas

Can Liberty and the FIA do enough to convince Haas that staying on for 2021 is a no-brainer? A fairer system of income distribution will help, but the overall equation still has to add up.

"According to F1 it's going to be a better deal, we're going to have cost caps and this and that, but until the ink's on a bit of paper that you can read, we don't really know exactly what it's going to be.

"I certainly would like to be able to get something in writing, but I doubt very much if that will come until December. That's the way it's always been, at least since we've been here - they never make a decision until midnight before the next day."

If you follow the company family trees the second youngest team on the 2019 grid is Mercedes, which began life as BAR in 1999 - and even then the champion outfit is technically still operating under the original Tyrrell franchise, even if all that survived that transition was the actual entry.

All the other teams that started from scratch within the past two decades have either failed or had the plug pulled, as was the case with Toyota.

F1 CEO Chase Carey talks a lot about ensuring that the future rules appeal to new teams, while suggesting that he's in contact with potential candidates.

Is there really a potential replacement 10th team out there should Haas not be around after 2020?

"You know, I couldn't see anybody starting an F1 team anymore," says Haas. "It depends how much money you want to spend.

"But the bigger problem is the DNA of how these cars work is just not available, you can't go out and buy these bits and pieces on your own, and it's not like anybody can force you to buy it.

"F1's biggest problem is that if a new entrant comes in, how do they start a team? It's like trying to grow an oak tree without a seed. It's very difficult.

"And I think 2021 really does bring up some questions about how difficult is that going to be now."