Recession will Hit Some Teams Hard, Warns Dennis

Some Formula One teams will struggle to keep going this year as recession blows in but most will weather the storm, says McLaren boss Ron Dennis.

"The Grand Prix teams will be last in and last out of a recession," he told reporters attending the launch of the Mercedes-powered team's 2002 car at the weekend when asked about the financial climate. "This year and the beginning of next year, I think some teams are going to really suffer," he said, without mentioning any by name.

But Prost, one of 12 teams officially entered in the season which starts in Australia on March 3, have been in receivership since November. A French judge, currently examining rescue proposals, could announce as early as Monday whether they can be saved or must be wound up with debts of around $28 million and a 300-strong workforce to deal with.

"Are we going to see some attrition? Yes, I think we will," Dennis asked rhetorically. "But the one thing about being in Formula One is that it breeds survivors. There are some people who are going to be going through some hardship but I think...most of them will survive in one form or another. But there's going to be a few walking wounded, I'm absolutely sure."

Big Spenders

Minardi, who now have sponsorship from Malaysia, almost went to the wall last year before aviation millionaire Paul Stoddart stepped in and saved them. Other teams have lost important sponsors, typically on two year deals that have ended or are coming to a close, as the telecoms and hi-tech sectors contract.

Jordan, one of the most commercially-minded teams in the paddock with high brand recognition and an entrepreneurial boss, have yet to confirm their title sponsor for 2002. At the same time some of the teams owned by carmakers are spending more money than ever as the gap between 'haves' and 'have-nots' widens.

Newcomers Toyota have been sparing little expense as they prepare for their Grand Prix debut in Melbourne. The team spent a sum estimated at well into six figures for exclusive use of the A1-Ring in Austria last year to carry out a full race simulation over three days with full logistical support.

McLaren are also spending heavily on their relocation to Paragon, a purpose built headquarters at Woking near London, after saving and budgeting over a number of years.

"Our expenditure at the moment has never been higher in the history of the group. It is just phenomenal at the moment," said Dennis. "One of (managing director) Martin (Whitmarsh)'s biggest tasks this year has been to have a far more disciplined approach to things like budget preparation and mechanisms by which we can measure on a monthly basis whether the company is performing correctly or not.

"There is not a business in this world that has an appetite like Formula One for money," he added. "It will eat anything that you wish to throw at it from a monetary standpoint. It is remarkably like an animal in that the more you feed it the more it wants. And when you want it to slim down, it doesn't respond."