Marco Vasini/AP

F1 Cost-Cutting Plan Angers Teams, Stifles Innovation

May 13, 2009 06:30 PM
by Denis Cummings
Threats by Ferrari and other automakers to pull out of next season may force Formula One to revise its plan to cap team budgets at $60 million.

Formula One Teams Threaten to Withdraw Over Budget Cap

Renault on Wednesday became the fifth Formula One team to threaten to withdraw from the 2010 Formula One world championship if the FIA, the sport’s governing body, does not revise its plan to impose a voluntary $60-million budget cap. Toyota, Red Bull Racing, Toro Rosso and Ferrari have all threatened to leave this week, leaving F1 with just five of its 10 teams fully committed to racing next season.

Under the FIA’s new rules for 2010, teams would have the choice of accepting the budget cap or spending over the cap and accepting technical restrictions for their cars. The budget was conceived in response to the global recession, which forced Honda to withdraw from the 2009 season.

The FIA and Formula One Teams Association (FOTA) met in December and developed “plans to double engine life in 2009, to limit engine revs and to cut the cost of engines supplied to independent teams by approximately 50% of 2008 prices,” according to the BBC. Teams agreed to reduce testing and impose some restrictions on engines.
However, the FIA believed that more concrete measures were needed to reduce costs immediately. On April 30, it announced that it was imposing the budget cap, declaring on its Web site that it “believes that unfettered technical competition is part of Formula One’s DNA, and would like to see this flourish, but in an environment of strong, responsible and innovative management, not a spending race.”

But critics of the plan argue that it will create a “two-tiered” circuit that Ferrari president Luca di Montezemolo labeled as “fundamentally unfair and perhaps even biased,” according to the BBC.

FIA and FOTA leaders will meet Friday to discuss the issue and perhaps find a compromise. The Daily Telegraph’s Tom Cary, who believes there is “no chance” Ferrari will follow through on its threat, writes that it is possible the FIA will agree to increase the budget cap.

Analysis: The cap’s impact on innovation

Formula One has long inspired innovation by automakers, which have used the competition to develop technology used in cars and many other items. “Wheelchairs, fishing lines, seats for military vehicles and probes landing on Mars … employ technologies originally developed for Formula One racing cars,” writes Carol Lewis of The Times of London.

However, in a report issued this week by the Advanced Institute of Management, British researchers argued that Formula One’s increased restrictions in past years has hampered innovation and could have a negative effect on the U.K. automaking industry.

These restrictions, which would include the budget cap, “threaten to significantly limit future innovations by race teams and may also undermine the future impact of innovation undertaken in motorsport across the wider economy and society,” write the researchers.

Related Topic: Chocolate Formula 3 car

A British racing team, World First Racing, recently unveiled an environmentally friendly Formula 3 racecar that runs on vegetable oil and waste chocolate, and is built using components such as carrots, soybean oil and potato starch. The race team believes that the technology will one day help to bring down the costs of auto racing.

“It is also hoped that WorldFirst’s ethos will eventually lead to a cost reduction for both fans and teams, as the technology advances and components become increasingly recyclable, reusable and cheaper as a result of their more widespread use,” declared the World First press release.

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