Uncontested success is a rookery for failure. Given sufficient duration in an insulated environment, privileged alpha types perpetuate hubris, bureaucracy, cronyism, and entropy. (The U.S. automobile industry in the 1970s is one of many examples.) Is such the state of Formula 1? Argue otherwise, but from the outside looking in, all signs point to eventual failure.
Formula 1 is certainly ruled by a concentrated privileged interest. Huge budgets set the agenda and garner full support of the FIA. Mercedes, Honda, Ferrari, and Renault foist “green-hybrid” technology on everyone; thus everyone outside the quad-hegemony is encumbered with “green-hybrid,” and bankrupting, technology.
Bankrupting for most, but good for the few. The powers that be at Maranello need only hint at the possibility of taking their $400, $500, $600 or whatever million-dollar budget elsewhere (even though there really is no “elsewhere” to go), and the FIA and Formula 1 Management Group rollover with paws outright scraping the air like puppies eager to please.
It's all too politically correct (as is most everything in Western Europe), which means it's all too bloody economically incorrect.
The latest incarnation of Formula 1 power plants are whiz-bang, Rube-Goldberg contraptions, to be sure. Not surprisingly, they are also expensive contraptions, running customer teams up to $30 million annually. Toss in another $5 million for gearboxes and hydraulics and we're talking real money for some teams. Manor Marussia, with $90 million to work with annually, could spend a third of its budget on motivation alone. (Though Manor is using year-old Ferrari engines, so it likely pays less, but the year-old engines solidify Manor's back-marker status.)
Hypocritically, the FIA pretends to be economical while being profligate. The engines and drive trains no private team or Formula 1 fan wants are limited to four per car per year. Need another engine or drive train? Then start at the back of the grid and try to DRS your way to the front. Drearily, the power plants (we can't call them engines in the true sense of the word) have been mandated toward higher mileage standards for no other reason than the FIA and its regulatory captures say so.
In this brave new Formula 1 world of imposed scarcity, a 1.6 liter V6 engine is turbo-charged to produce 600 brake horsepower at 15,000 rpm. To unnecessarily complicate matters and up the power output, a Kinetic Energy Recovery System (KERS) is attached to produce another 160 horsepower. It does so by converting mechanical and heat energy into electrical energy. The current power units are purported to produce as much power as the old 2.4-liter V8s, but consume 35% less energy. (Directly more efficient, but indirectly less efficient. The considerable energy – manpower, capital, and fossil fuel – required to produce such monstrosities is excluded from the efficiency calculus). No one outside of Paris and Brussels cares.
Of course, no one watches Formula 1 to calculate miles per gallon or kilometers per liter. Never mind that the cars themselves are nonentities in the grand scheme of Formula 1's enormous fossil-fuel consumption. Compared to the fuel burned to move teams and the rest of the circus country to county, continent to content, the fuel the cars consume is comparable to a thimble in a gallon. Now, toss in the fuel to ferry around the million or so fans who attend the races annually, and you're looking at the equivalent of the lone human peeing in the ocean. The paradigm wouldn't change if the cars got 100 miles per gallon.
That Formula 1 cars get closer to one mile per gallon than 100 raises their appeal. Formula 1 is a blip of an oasis in the mist of an expansive and arid plane of cretinous lobby-bought efficiency and faux sustainability. The more genuinely profligate Formula 1 is – that is, profligate in entertaining – the more appealing it becomes.
Innovation and technology is a putative selling point, though an illegitimate selling point. At best, Formula 1 is an R&D proving ground for corporatist manufacturers attempting to appeal to political imperatives. Honda, Mercedes, Renault, and Ferrari can develop components at considerable costs that may or may not work in production cars. Mercedes AMG Petronas lost $117 million in 2014, despite putting in an effort that produced a constructor's and driver's championship. The loss might have exceeded Manor's annual budget, but Mercedes AMG Petronas Executive Director Toto Wolff labeled the season an “unprecedented success.”
A constructor and a world driving championship is the pinnacle of auto-racing success, but it is only an “unprecedented success” if $117 million is a loss leader. If your real business is selling cars and Formula 1 is a marketing and R&D expense that produces more car sales, then Mercedes 2014 Formula 1 campaign can be labeled an “unprecedented success.” (Though I can't help but wonder if the Mercedes AMG safety car isn't a better promotional tool and R&D proving instrument than the actual race car.)
For everyone else, Formula 1 racing is the business. The idea is to turn a profit while turning a car around a track. The works teams – Red Bull, Mercedes, McLaren, and Ferrari – are all budgeted to spend in excess of $400 million. How much more is spent within other areas of the empire for these cars, and is thus buried in other accounts, is anyone's guess.
Williams Martini Racing is the largest, with a $200 million annual budget, of the non-works team. Its budget is nearly double that of the lesser customer teams. Still, four works teams spend twice what Williams spends, and more than four times what Manor spends. It's a miracle Williams finds itself occasionally on the podium. Manor on the grid is no less a miracle.
As it now stands, FIA rules force less-endowed teams to not only subsidize the works teams' R&D, but then to compete with the works teams using the works teams' R&D. This is analogous to asking David to lay down his slingshot and confront Goliath on Goliath's terms. It will end poorly for David; it will end poorly for the customer teams. Yes, a driver on a better-financed customer team will occasionally capture third on the podium, but the weather or a screw up by a works team likely played a part.
As for the Honda and McLaren disaster, does anyone not think that Honda is paying McLaren for the time to develop an engine? To be sure, it could be a Faustian bargain for McLaren; time will tell, but despite losing major sponsors in recent years, McLaren's budget still exceeds $400 million per anum.
We're told that if the rulebook were opened, costs would run roughshod. This is a red herring. A team will spend what it can spend, regardless what the rulebook says. Ferrari will spend $400 million annually; Manor will spend $90 million. An open or closed rulebook won't change that. The automobile business is one marked by unrelenting competition, but no one spends more than what he can afford, at least not for long.
Stasis is the worst aspect of the rules.If you are Ferrari, Mercedes, McLaren, and Red Bull this is good news. Knowing you'll always garner the prize money and the sponsorship, the manufacturers lobby for the technology they want, and then demand everyone else abide. This is crony capitalist exemplified.
The rules also serve as an effective barrier to entry. When a company with as rich a racing heritage and with resources as vast as Honda struggles mightily to break through the velvet rope, what are the odds others will follow? Will Toyota, Volkswagen, or Ford spend a billion dollars to develop an engine that can motivate a car no higher than tenth place? What's a niche engine company like Cosworth to do? Mercedes and Ferrari couldn't have devised rules better able to solidify their position atop the totem if they had written them themselves. Perhaps they did.
Formula 1 is show business first. I've attended a number of grand prix. Visceral stimulation was, and had been, the attraction. After all, senses should be fully alighted when paying $1,000 for a weekend pass. And they used to be.
Before this new generation of power units, Formula 1 cars oozed an aura of awe infused with titillation. The smell of high-octane fuel, the sight of gleaming aerodynamic marvels, the pure opulence pricked every nerve and aroused every follicle.
But the sound, more than anything, put it all over the top. To hear a normally aspirated Formula 1 V-8, V-10, or V-12 fired up for the first time is to reach nirvana. Never have pleasure and pain been so exquisitely mixed. The sound -- akin to 150-decibal banshee wail -- intimidated nearly everyone within earshot (and earshot can be miles away). The sound ensured that no one but the most courageous professional driver could muster the chutzpah to handle a Formula 1 car; no amateur dare try. That's all gone away thanks to the somnolent electric hum of the the new generation of hybrids.
The pretense of economy further despoils the spectacle. Mandating that race engines emulate tractor engines violates the very ethos of racing. Every effort should be concentrated on that race, and that race weekend only. The equipment and the personnel should give their all to those three days. With the equipment mandated to last multiple race weekends, everyone always has an eye toward the next race weekend. The future impedes on the present.
What's a driver to do when racing in a strong sixth position and is in striking distance of fifth? If fifth position is the sole agenda, he'll push for fifth. But fifth can't be the sole agenda with today's rules. The driver could push with every fiber of his being and capture fifth, but what if the power plant has been so stressed that it won't survive race five? A driver and his team could give it all in the current race and capture one more position only to give it all back and more the following race. Being forced to always have an eye on the next race compromises the current race for the team, and more importantly, it compromises the experience for the spectators.
The realty is that Formula 1 has been regulation into a spec series, albeit with a veneer of the bespoken. To improve the spectacle, to promote innovation, to generate interest, to improve competition, to better enable teams to generate return on investment, to possibly even save the sport, the rules must be liberalized.
The FIA's say should be limited to safety – cars and tracks – and with officiating races. Regulation should be limited to a car's size, dimensions, weight, safety cell, and fuel cell (set a maximum capacity, but allow refueling). The rules should ensure a Formula 1 car meets expectations – single cockpit, open wheels, open cockpit. Write the rules so that components need only last the race weekend. Penalties apply only to failures on that weekend. There is no carryover. This ensures that that weekend is the only weekend everyone focuses on.
Set maximum brake horsepower – this is key – then open the rulebook. How you reach the maximum is up to you: turbo-charged, supercharged, normally aspirated, you make the call. Four, six, eight, 10, or 12 cylinders, whatever you can secure. The same goes for fuel: gasoline, diesel, methanol, ethanol, use what you think best powers the engine. Electric or hybrid is also within your discretion. Two- or four-cycle engine? Whatever you think works best. It's wide open if safety isn't compromised, competitor performance isn't impeded (e.g., trust from a turbine engine), and maximum horsepower isn't exceeded.
Perhaps Manor could source normally aspirated engines from Cosworth for a third of the price it pays to Ferrari. That leaves more money to develop the car, test the car, and to hire more capable personnel. It leaves more money to innovate and develop.
The opportunity to actually secure sponsorship and move up the grid also improves. Manor is no longer competing with Mercedes, Red Bull, and Ferrari on the latters' terms. Much like David did against Goliath, the smaller teams can innovate, and are likely to gain more on the margin for their R&D dollar compared to the bigger works teams. A good engineer can do with a dollar what any idiot can do with a hundred, as former FIA chief Max Mosley astutely noted. The less endowed teams have a chance to make a legitimate business; they have a chance to compete.
Egalitarianism is neither the issue, nor the goal. If a team wishes to spend $400 million, $800 million, $1 billion annually, so be it. But don't force teams that spend considerably less to compete in the same way with the same materials. If $200 million must compete with $400 million on $400 million's terms, $400 million wins.
Of course, there are no guarantees. Back markers and mid-field teams will continue to fail, but then again front runners could suffer the same fate. Tyrrell, Lotus, Brabham once ruled the roost. Is turnover really so bad? Not if the sport continues to improve the spectacle. I dare say that a liberalized Formula 1 would improve the spectacle, and improve it to the point it could even survive the demise of Ferrari.
Formula 1 is certainly ruled by a concentrated privileged interest. Huge budgets set the agenda and garner full support of the FIA. Mercedes, Honda, Ferrari, and Renault foist “green-hybrid” technology on everyone; thus everyone outside the quad-hegemony is encumbered with “green-hybrid,” and bankrupting, technology.
Bankrupting for most, but good for the few. The powers that be at Maranello need only hint at the possibility of taking their $400, $500, $600 or whatever million-dollar budget elsewhere (even though there really is no “elsewhere” to go), and the FIA and Formula 1 Management Group rollover with paws outright scraping the air like puppies eager to please.
It's all too politically correct (as is most everything in Western Europe), which means it's all too bloody economically incorrect.
The latest incarnation of Formula 1 power plants are whiz-bang, Rube-Goldberg contraptions, to be sure. Not surprisingly, they are also expensive contraptions, running customer teams up to $30 million annually. Toss in another $5 million for gearboxes and hydraulics and we're talking real money for some teams. Manor Marussia, with $90 million to work with annually, could spend a third of its budget on motivation alone. (Though Manor is using year-old Ferrari engines, so it likely pays less, but the year-old engines solidify Manor's back-marker status.)
Hypocritically, the FIA pretends to be economical while being profligate. The engines and drive trains no private team or Formula 1 fan wants are limited to four per car per year. Need another engine or drive train? Then start at the back of the grid and try to DRS your way to the front. Drearily, the power plants (we can't call them engines in the true sense of the word) have been mandated toward higher mileage standards for no other reason than the FIA and its regulatory captures say so.
In this brave new Formula 1 world of imposed scarcity, a 1.6 liter V6 engine is turbo-charged to produce 600 brake horsepower at 15,000 rpm. To unnecessarily complicate matters and up the power output, a Kinetic Energy Recovery System (KERS) is attached to produce another 160 horsepower. It does so by converting mechanical and heat energy into electrical energy. The current power units are purported to produce as much power as the old 2.4-liter V8s, but consume 35% less energy. (Directly more efficient, but indirectly less efficient. The considerable energy – manpower, capital, and fossil fuel – required to produce such monstrosities is excluded from the efficiency calculus). No one outside of Paris and Brussels cares.
Of course, no one watches Formula 1 to calculate miles per gallon or kilometers per liter. Never mind that the cars themselves are nonentities in the grand scheme of Formula 1's enormous fossil-fuel consumption. Compared to the fuel burned to move teams and the rest of the circus country to county, continent to content, the fuel the cars consume is comparable to a thimble in a gallon. Now, toss in the fuel to ferry around the million or so fans who attend the races annually, and you're looking at the equivalent of the lone human peeing in the ocean. The paradigm wouldn't change if the cars got 100 miles per gallon.
That Formula 1 cars get closer to one mile per gallon than 100 raises their appeal. Formula 1 is a blip of an oasis in the mist of an expansive and arid plane of cretinous lobby-bought efficiency and faux sustainability. The more genuinely profligate Formula 1 is – that is, profligate in entertaining – the more appealing it becomes.
Innovation and technology is a putative selling point, though an illegitimate selling point. At best, Formula 1 is an R&D proving ground for corporatist manufacturers attempting to appeal to political imperatives. Honda, Mercedes, Renault, and Ferrari can develop components at considerable costs that may or may not work in production cars. Mercedes AMG Petronas lost $117 million in 2014, despite putting in an effort that produced a constructor's and driver's championship. The loss might have exceeded Manor's annual budget, but Mercedes AMG Petronas Executive Director Toto Wolff labeled the season an “unprecedented success.”
A constructor and a world driving championship is the pinnacle of auto-racing success, but it is only an “unprecedented success” if $117 million is a loss leader. If your real business is selling cars and Formula 1 is a marketing and R&D expense that produces more car sales, then Mercedes 2014 Formula 1 campaign can be labeled an “unprecedented success.” (Though I can't help but wonder if the Mercedes AMG safety car isn't a better promotional tool and R&D proving instrument than the actual race car.)
For everyone else, Formula 1 racing is the business. The idea is to turn a profit while turning a car around a track. The works teams – Red Bull, Mercedes, McLaren, and Ferrari – are all budgeted to spend in excess of $400 million. How much more is spent within other areas of the empire for these cars, and is thus buried in other accounts, is anyone's guess.
Williams Martini Racing is the largest, with a $200 million annual budget, of the non-works team. Its budget is nearly double that of the lesser customer teams. Still, four works teams spend twice what Williams spends, and more than four times what Manor spends. It's a miracle Williams finds itself occasionally on the podium. Manor on the grid is no less a miracle.
As it now stands, FIA rules force less-endowed teams to not only subsidize the works teams' R&D, but then to compete with the works teams using the works teams' R&D. This is analogous to asking David to lay down his slingshot and confront Goliath on Goliath's terms. It will end poorly for David; it will end poorly for the customer teams. Yes, a driver on a better-financed customer team will occasionally capture third on the podium, but the weather or a screw up by a works team likely played a part.
As for the Honda and McLaren disaster, does anyone not think that Honda is paying McLaren for the time to develop an engine? To be sure, it could be a Faustian bargain for McLaren; time will tell, but despite losing major sponsors in recent years, McLaren's budget still exceeds $400 million per anum.
We're told that if the rulebook were opened, costs would run roughshod. This is a red herring. A team will spend what it can spend, regardless what the rulebook says. Ferrari will spend $400 million annually; Manor will spend $90 million. An open or closed rulebook won't change that. The automobile business is one marked by unrelenting competition, but no one spends more than what he can afford, at least not for long.
Stasis is the worst aspect of the rules.If you are Ferrari, Mercedes, McLaren, and Red Bull this is good news. Knowing you'll always garner the prize money and the sponsorship, the manufacturers lobby for the technology they want, and then demand everyone else abide. This is crony capitalist exemplified.
The rules also serve as an effective barrier to entry. When a company with as rich a racing heritage and with resources as vast as Honda struggles mightily to break through the velvet rope, what are the odds others will follow? Will Toyota, Volkswagen, or Ford spend a billion dollars to develop an engine that can motivate a car no higher than tenth place? What's a niche engine company like Cosworth to do? Mercedes and Ferrari couldn't have devised rules better able to solidify their position atop the totem if they had written them themselves. Perhaps they did.
Formula 1 is show business first. I've attended a number of grand prix. Visceral stimulation was, and had been, the attraction. After all, senses should be fully alighted when paying $1,000 for a weekend pass. And they used to be.
Before this new generation of power units, Formula 1 cars oozed an aura of awe infused with titillation. The smell of high-octane fuel, the sight of gleaming aerodynamic marvels, the pure opulence pricked every nerve and aroused every follicle.
But the sound, more than anything, put it all over the top. To hear a normally aspirated Formula 1 V-8, V-10, or V-12 fired up for the first time is to reach nirvana. Never have pleasure and pain been so exquisitely mixed. The sound -- akin to 150-decibal banshee wail -- intimidated nearly everyone within earshot (and earshot can be miles away). The sound ensured that no one but the most courageous professional driver could muster the chutzpah to handle a Formula 1 car; no amateur dare try. That's all gone away thanks to the somnolent electric hum of the the new generation of hybrids.
The pretense of economy further despoils the spectacle. Mandating that race engines emulate tractor engines violates the very ethos of racing. Every effort should be concentrated on that race, and that race weekend only. The equipment and the personnel should give their all to those three days. With the equipment mandated to last multiple race weekends, everyone always has an eye toward the next race weekend. The future impedes on the present.
What's a driver to do when racing in a strong sixth position and is in striking distance of fifth? If fifth position is the sole agenda, he'll push for fifth. But fifth can't be the sole agenda with today's rules. The driver could push with every fiber of his being and capture fifth, but what if the power plant has been so stressed that it won't survive race five? A driver and his team could give it all in the current race and capture one more position only to give it all back and more the following race. Being forced to always have an eye on the next race compromises the current race for the team, and more importantly, it compromises the experience for the spectators.
The realty is that Formula 1 has been regulation into a spec series, albeit with a veneer of the bespoken. To improve the spectacle, to promote innovation, to generate interest, to improve competition, to better enable teams to generate return on investment, to possibly even save the sport, the rules must be liberalized.
The FIA's say should be limited to safety – cars and tracks – and with officiating races. Regulation should be limited to a car's size, dimensions, weight, safety cell, and fuel cell (set a maximum capacity, but allow refueling). The rules should ensure a Formula 1 car meets expectations – single cockpit, open wheels, open cockpit. Write the rules so that components need only last the race weekend. Penalties apply only to failures on that weekend. There is no carryover. This ensures that that weekend is the only weekend everyone focuses on.
Set maximum brake horsepower – this is key – then open the rulebook. How you reach the maximum is up to you: turbo-charged, supercharged, normally aspirated, you make the call. Four, six, eight, 10, or 12 cylinders, whatever you can secure. The same goes for fuel: gasoline, diesel, methanol, ethanol, use what you think best powers the engine. Electric or hybrid is also within your discretion. Two- or four-cycle engine? Whatever you think works best. It's wide open if safety isn't compromised, competitor performance isn't impeded (e.g., trust from a turbine engine), and maximum horsepower isn't exceeded.
Perhaps Manor could source normally aspirated engines from Cosworth for a third of the price it pays to Ferrari. That leaves more money to develop the car, test the car, and to hire more capable personnel. It leaves more money to innovate and develop.
The opportunity to actually secure sponsorship and move up the grid also improves. Manor is no longer competing with Mercedes, Red Bull, and Ferrari on the latters' terms. Much like David did against Goliath, the smaller teams can innovate, and are likely to gain more on the margin for their R&D dollar compared to the bigger works teams. A good engineer can do with a dollar what any idiot can do with a hundred, as former FIA chief Max Mosley astutely noted. The less endowed teams have a chance to make a legitimate business; they have a chance to compete.
Egalitarianism is neither the issue, nor the goal. If a team wishes to spend $400 million, $800 million, $1 billion annually, so be it. But don't force teams that spend considerably less to compete in the same way with the same materials. If $200 million must compete with $400 million on $400 million's terms, $400 million wins.
Of course, there are no guarantees. Back markers and mid-field teams will continue to fail, but then again front runners could suffer the same fate. Tyrrell, Lotus, Brabham once ruled the roost. Is turnover really so bad? Not if the sport continues to improve the spectacle. I dare say that a liberalized Formula 1 would improve the spectacle, and improve it to the point it could even survive the demise of Ferrari.
RSS Feed