Dodgy Business

Williams - between a rock and a hard place?

Events on track at Shanghai contrasted sharply with what was going on in the paddock. On the circuit, Lewis Hamilton was so supreme that nobody else had a look in. It was not one of the season's more entertaining Sundays.

But in the paddock, the political toing and froing outstripped anything some could recall for the past 30 years. I've often thought the balancing act of making Formula One viable for both big manufacturer teams and small independents, whose sole business is racing, is so hugely difficult as to be nigh on impossible.

The Formula One Teams' Association (FOTA) was preparing for its meeting with Max Mosley to discuss the future and, so determined were the teams not to be split by the detonation of standard engines and customer car grenades, that they decided to send only Luca di Montezemolo and John Howett to see Max, so that the rest couldn't start bickering.

The FOTA meeting in Shanghai © LAT

The team I feel sorry for in all this is Williams, who seem out on a limb in the composition of today's F1 paddock. McLaren Mercedes, Ferrari, BMW, Renault, Honda and Toyota are all both car manufacturers and F1 teams. Red Bull and Toro Rosso have a billionaire owner who makes his fortune through hugely profitable energy drinks. Force India's Vijay Mallya is another billionaire, one of India's richest men with a plethora of entrepreneurial interests, including a brewery and an airline. And then there's Frank Williams and Patrick Head, whose sole business enterprise depends on making a profit out of F1 - which, of late, they have not been doing.

Williams do not want customer cars in F1. The company is set up to be a constructor, which is exactly what the rules, as they are, say they must be. Understandably enough, the idea that someone is going to buy a McLaren and beat you with it, running it at a fraction of your costs, does not sit well.

"It's a bit difficult to follow the position of customer cars in F1," said Head in Shanghai. "I've been at a meeting when customer cars and what a good thing they are, has been talked about. But the last meeting I was involved with was all about, no, we don't want customer cars. And that was with all the teams, so the goal posts do seem to move."

"If Force India do run a McLaren it will be interesting to know whether it's actually a 2009 McLaren or a converted 08 car to next year's aero rules," Patrick mused. "Either way I think it would probably be quite a quick car."

He continued: "Obviously it wouldn't be a favoured direction for Williams. I was drawn into a conversation by Bernie at Valencia. Vijay Mallya was there, and Flavio (Briatore). Vijay was somewhat gutted to have seen that Sebastian Vettel was fastest in one of the practice sessions. This is a man (Mallya) who had taken over a situation from somebody else (Spyker) but had funded a legal action against other customer teams and I think won some damages."

Head was referring to a settlement Force India received, thought to be in the order of $4 million, to allow customer cars from Super Aguri and Toro Rosso to participate in F1 against the provisions of the Concorde Agreement which governs it.

"But," Patrick went on, "in this conversation, Vijay was saying that he was now in support of customer teams because he has spent an enormous amount of money, has got three wind tunnel programmes going and yet is still being made to look a fool by someone gaining their car from another team. So, if that was the way, he had to hold up his head in the pit lane, do an about face and take that route.

"Bernie was saying, 'Don't worry, I'll make this happen.' Well, Bernie's the promoter, although we are all operating, as far as our understanding goes, under the document we signed towards the end of 2005. It actually stated that if there was no replacement Concorde Agreement by 2008, then we would be under the conditions of the previous 1998 agreement from 2008-2012." In other words, you need to be a constructor.

Kazuki Nakajima (Williams) and Giancarlo Fisichella (Force India) during the Hungarian Grand Prix © XPB

Force India employ around 250 staff. Williams' roster is about 520. There are two wind tunnels at Grove and around 300,000 square feet of factory space. Frank's business plan is based around needing that level of resource to compete in F1 until the end of 2012. He's not in a position to do a Mallya, change his mind and go buy a Ferrari. Ask Head if Williams will weaken their position on customer cars and he grimaces.

"I can't really make a statement about that," he says. "We set ourselves up and acquired a facility appropriate to designing, building and operating our own cars. If the ground rules change completely it puts us in quite a difficult position. To suddenly turn it into a racing team suitable for operating somebody else's cars, you could say we're ever so slightly over-resourced."

Now add in the recent formation of the Formula One Teams' Association (FOTA) and its desire to present a united front in the best interests of the teams. Let's say they all decide that customer cars are okay. What does Frank do? He depends on one of them for his engine for a start. Williams is stuck between a rock and a hard place.

Yes, if you want to, you can say that Frank hasn't moved with the times. You can look at the McLaren model, where Ron Dennis has taken on Mercedes Benz as a partner at the same time as effectively retaining control of his business. You can ask why Frank didn't go the same route when he had the opportunity with BMW. Like Peter Sauber did. You can say that times change and business changes with it. But that doesn't alter the fact that Frank finds himself in this position because he is playing by the rules. Expecting him to agree to customer cars is a bit like expecting him to volunteer for bankruptcy.

To balance his books, Frank has to make sure his expenditure does not exceed his income from sponsorship and from Formula One Management (FOM). He cannot rely on a handout from a parent company regarding his activity as part of their marketing budget. Or on the largess of a billionaire selling sundry drinks. The figures have to add up. If they don't, his life's work is down the pan.

And even if there are arrangements made so that his prize money is not reduced by finishing behind a customer car, it still affects his sponsorship income. A racing car is a mobile advertising hoarding and although sponsorship sophistication has increased, the number of minutes you are in front of the TV cameras still impacts on income. The fact is that the further back you are, the less sponsor income you generate.

The irony, of course, is that Frank has never wanted the biggest yacht in the harbour and the team have never been spendthrifts. They have always spent their money on engineering, which is why they are second only to Ferrari (15) in the number of constructors titles (9) they have won, and in half the time, although admittedly it's a good while since the last one.

Listen to technical director Sam Michael talking about this year's longer life gearbox rule: "The four-race rule has been fantastic for us. You hear people say it's more expensive or has made little difference but that's just so wrong. Our spend on internals for gear ratios and things has come down by about 65% - it's massive. It has saved us numbers of millions of pounds, not a hundred grand here and there. We're getting grief from Peter Digby at Xtrac for not buying enough ratios! I love rules like that because it doesn't detract from trying to do things stiffer and lighter and package them nicely."

Williams gearbox detail © XPB

If you were going to do a case study of what F1 should sensibly cost, I'd suggest that Williams' budget would be a pretty good starting point. If I was Frank I'd be deeply pissed off. And I would want compensating. I'd tell my lawyer that I'd established a business around existing rules that were now displaying all the stability of a vibrating blancmange.

Let's do some simple maths. Suppose you are faced with losing 250 staff to run a customer car and stay in business. I've no idea what the average salary of a Williams employee might be, but let's say it's 75 grand. To pay 250 of them for a year would cost £18.75m. And to pay them up to the end of 2012, the date until which you supposedly needed to be a constructor, would cost £75m. I'd want at least that before I agreed not to go legal about customer cars.

Would that be fair, I asked Head in Shanghai without mentioning figures?

"I think it would be a pretty short answer if we said that!" Patrick smiled, "but these are difficult times and we have to steer our way through it. Necessity means that sometimes things that are written in documents get changed."

So much of what Max Mosley and the FIA are trying to do to cut costs in F1 makes total sense. He's right. It shouldn't be a spending contest. And if the rules require you to be a constructor, then it should not be prohibitively expensive to be one when all you are trying to do is put two racing cars on a track 18 times a year.

Whether customer cars are a good idea or not is debatable. If I was Toyota or Honda and had geared up to do a job, I would hate the idea of a small bunch of competent specialists being able to buy the fastest car on the grid and take me on. But then, logically, should I hate it? Because in the end, if I'm going to win I've got to beat the two best cars anyway, so I'll just have to beat four of them.

One argument against the customer car route is that eventually it will distill down to just one or two different chassis in F1. And there are plenty of motor racing classes like that. F1 needs to be different. But, would it go that way? There are six manufacturers in F1. You won't find Renault buying a Ferrari, or Mercedes a BMW, for marketing reasons, so you should be guaranteed as many chassis as there are manufacturers in F1.

Max has said that historically manufacturers have flitted in and out of F1 when it suits them and you have to protect the sport by making it viable for independents. Today though, they have all made a major commitment and you can't separate out manufacturers from teams.

Cars in parc ferme after qualifying © LAT

They are not simply engine providers anymore, each manufacturer has a team. What would be sensible would be a rule limiting the supply of a customer car/engine to one team only.

Another objection is that F1 would become merely a split of manufacturer A and B teams, organised tactically to help the A team. Maybe so, but would that necessarily be a disaster?

The biggest thing wrong with F1 is that you don't know who the best drivers are because generally there are only two ultimately competitive teams and hence only four drivers with a realistic chance of winning a race. So if this year, McLaren and Ferrari had customer teams, you'd at least have four teams and eight drivers in with a chance.

For the show, I don't think that would be bad. But if you are going to change the rules mid game, it shouldn't be at the expense of one stalwart team in the mire because it is playing by the rules. I don't want to sound overly romantic or naive but for me F1 has both a moral and a legal obligation to look after Williams. They should be squared away, as they say.