Thoughts on current F1 Regulations

[Jag_Warrior]

Honda is the same Honda.

Honda always want to meddle and fiddle with the teams they supply/operate.

Yes, that part may still be true. But my observation is based more on their ability (or lack thereof) to plan and execute. And at least here in the States, even their marketing has become much less focused and edgy. I've been out of automotive for going on three years now and I've lost touch with a great many of the people who used to feed me "what's what" industry news (people have this odd tendency of retiring and/or dying, it seems). But this trend that I *think* I see in Honda really did start some time ago. From passenger cars (although the quality is still quite good) to racing, this "new" Honda seems to have lost a step.

Anyway, I do hope they get it turned around. I'm not so much a Honda fan, but I would like to see all of the manufacturers being competitive.

[Rollo]

But this trend that I *think* I see in Honda really did start some time ago. From passenger cars (although the quality is still quite good) to racing, this "new" Honda seems to have lost a step.

They've done all right in the BTCC with Shedden taking out the championship and in the WTCC, nothing can stop the Citroën juggernaut. They're putting in a decent showing in Super GT with Izawa and Yamamoto in the NSX as well - currently 2nd.

Honda's F1 program like Renault's suffers from the problem that if you have a bad package, they rules basically prevent you from improving. This suits M-B and Ferrari nicely and Renault might up stumps because of it. Honda started a year late and are on a hiding to nothing.

[Nitrodaze]

Yes, that part may still be true. But my observation is based more on their ability (or lack thereof) to plan and execute. And at least here in the States, even their marketing has become much less focused and edgy. I've been out of automotive for going on three years now and I've lost touch with a great many of the people who used to feed me "what's what" industry news (people have this odd tendency of retiring and/or dying, it seems). But this trend that I *think* I see in Honda really did start some time ago. From passenger cars (although the quality is still quite good) to racing, this "new" Honda seems to have lost a step.

Anyway, I do hope they get it turned around. I'm not so much a Honda fan, but I would like to see all of the manufacturers being competitive.

The Honda debacle in F1 is simply the realities of joining F1 under the current restrictive rules. Honda and Renault are confronting the fact that they have got their engine design wrong for 2015. The Honda case is more embarrassing because engine is woefully poor from 70% of the straights of most tracks. Unfortunately, the nature of the rules is such that, before the start of the 2015 season,they were unlikely to have a good understanding of the their relative competitiveness untill they arrive at the few pre-season test sessions. Even then, they would have been unable to do much about it with such a short testing window before the first race at Australia. Mainly because the problem is more architectural than configurational. But more importantly is the process of understanding the problems with where the engine was lacking, dealing with unforeseen reliability issues and keeping up with the mounting list of tasks to keep operational.

Under the new FIA F1 format of 1.6L V6 hybrid car, Honda must be seen as novices, as such must be granted the patience that is due a novice to this new format F1. The fact that they overestimated their chances of being competitive underlines this fact. This fact does not by any means suggest that Honda is past it and not able to produce competitive engines. I think they would as there is a matter of pride involved here. I doubt Honda are quitters also as that would be more damaging to their reputation than showing grit and determination and overcoming their difficulties. Showing grit and prevailing would give Honda an enormous boost in their reputation and brand popularity.

As one who rides a Honda Fireblade litre bike, l have a strong feeling that they can prevail over their immediate difficulties. If they can beat Mercedes is another matter. That would take a number of seasons. They may bring Mclaren closer to the front of the grid in 2016, enough to bother Williams maybe. My real interest is in what they might be able to do in 2017; assuming they stick in there and have some belief that the can do it.

The Honda story is an interesting one, as Honda in this instance is the underdog in the face of the dominance of Mercedes. It is also a return of faith and trust of an old friend [Mclaren] seeking a change of fortune. The quiet question is, can this return of partnership return the glory days of their previous partnership? The current circumstances is different, the competitors are stronger than ever and the road to success is fraught with unseen pitfalls and tribulations. And they must travel this road naked in the ever glaring eyes of the modern information age.

The nakedness of this journey alone makes the outcome of this story more glorious if successful or poignant at failure. It is the underdog come good story, if they succeed and everyone loves a rise to success story, especially from a position of despair where everyone has written them off. The Herbie story of sorts. It is an inspirational character building story. However, If Honda chickens out and cowardly pulls out before they achieve anything or overcome their challenges, it simply is not something anyone would want to be identified with.

Honda is in the public eye on this journey, they have no option but to successfully produce a competitive engine. They must have the Mclaren consistently fighting for podium positions to remotely say they have achieved the F1 communities admiration. But more importantly, they have to win an F1 constructor or driver championship to really say they have been successful. It may seem like a mountainous challenge, but if anyone can, the Mclaren-honda partnership is one that l am willing to bet hard cash on to do it.

[Rollo]

The idea of capping price of engine is a great idea actually. Obviously manufacturers would spend what they have to spend on the development of their engine to ensure they are at the front. But they would do that with or without the FIA cost cutting rules which really create more spending than the cost it actually cuts.

Solution:
Ferrari sets up an arms length company called Vittorio Alfieri SpA. None of the staff who own or work at Ferrari own this company.
Vittorio Alfieri SpA then designs, develops and builds engines.
Vittorio Alfieri SpA then gives Ferrari at the cost of €0.01
You can't audit the books of Vittorio Alfieri SpA because it's not entered in F1 and because it is a loss making entity, also probably wouldn't need to be audited either. It would also have a turnover per year of €0.01.

The idea of capping price of engine is a dumb idea actually; for the above reason. What do you do if they start selling prime engines to the A-team* for €0.01?

*Today, still wanted by the government, they survive as soldiers of fortune. If you have a problem, if no one else can help, and if you can find them...

[Nitrodaze]

Solution:
Ferrari sets up an arms length company called Vittorio Alfieri SpA. None of the staff who own or work at Ferrari own this company.
Vittorio Alfieri SpA then designs, develops and builds engines.
Vittorio Alfieri SpA then gives Ferrari at the cost of €0.01
You can't audit the books of Vittorio Alfieri SpA because it's not entered in F1 and because it is a loss making entity, also probably wouldn't need to be audited either. It would also have a turnover per year of €0.01.

The idea of capping price of engine is a dumb idea actually; for the above reason. What do you do if they start selling prime engines to the A-team* for €0.01?

*Today, still wanted by the government, they survive as soldiers of fortune. If you have a problem, if no one else can help, and if you can find them...

The scenario you describe would instantly flag a nefarious activity which would inevitably result in Ferrari being thrown out of the sport. This would threaten the continuity of the sport as we know it. It may sound clever on paper but you forget the other teams are not stupid enough not to see this as dodgy from a mile off and start to make uncomfortable noises that would effectively bring the formula to a halt. But l do agree with you that capping engine cost may not work for other obvious reasons.

[Rollo]

It may sound clever on paper but you forget the other teams are not stupid enough not to see this as dodgy from a mile off and start to make uncomfortable noises that would effectively bring the formula to a halt. But l do agree with you that capping engine cost may not work for other obvious reasons.

Really? Pray tell how would anyone investigate it?
A multi-million dollarpound company like Ferrari or Mercedes-Benz could find all sorts of neat ways to hide expenses. Such things like a double Irish with a Dutch sandwich schemes exist by other companies to avoid tax; you don't think that companies like Ferrari or Mercedes-Benz could hide audit trails?
Besides which, if you appoint an external auditor, who hires them? The FIA, FOM?

I suspect that the 2007 Espionage Scandal only came to light because a certain Spaniard didn't like a pipsqueak Englishman beating him. $100 million later and they're still in the sport.

[Nitrodaze]

Really? Pray tell how would anyone investigate it?
A multi-million dollarpound company like Ferrari or Mercedes-Benz could find all sorts of neat ways to hide expenses. Such things like a double Irish with a Dutch sandwich schemes exist by other companies to avoid tax; you don't think that companies like Ferrari or Mercedes-Benz could hide audit trails?
Besides which, if you appoint an external auditor, who hires them? The FIA, FOM?

I suspect that the 2007 Espionage Scandal only came to light because a certain Spaniard didn't like a pipsqueak Englishman beating him. $100 million later and they're still in the sport.

Of course F1 teams can find interesting ways of hiding costs, but somehow l cannot see how Ferrari or any manufacturer team would get away with purchasing engine for $1 and not cause some sort of reaction in the paddock. The consequences is not only going to be damaging to the team, if it was a top team like Ferrari or Mercedes, it could bring the entire sport to crisis. What you are talking about makes the Mclaren Ferrari-gate seem like small potatoes. The consequences would fall outside the scope of the FIA into legal. Hiding cost is not far off hiding taxes and profits, government would definitely be involved. What you are talking about could result in someone going to jail for a long time.

[Rollo]

l cannot see how Ferrari or any manufacturer team would get away with purchasing engine for $1 and not cause some sort of reaction in the paddock.

Play it the other way then.

Ferrari already doesn't purchase engines.
Ferrari could (and probably already does) claim that its entire F1 program is all R&D and those costs are not mutually exclusive to the Formula One team. If parts like valve gear were developed on one side of a workshop, how could you prove what they were necessarily for?
Again, does the FIA have to do an audit of the entire of Ferrari S.p.A? The question of plausible deniability raises its head again.

Would you expect the auditors to separate out costs for an organisation which turns over € 2.3 billion?

Besides which, imposing a cost cap in F1 would probably see a legal challenge before it was implemented.
FOM already has a major shareholder in private equity firm CVC and the second largest shareholder is asset management firm Waddell & Reed; they probably already operate a double Irish with a Dutch sandwich scheme.

[Nitrodaze]

The simplest way to cut engine development costs is to cap what an engine supplier can charge a team for an engine supply for the season. i.e. $5 million per season per team. The engine supplier can then develop their engine during the season at no extra cost to the team. If the same engine regs are used for a number of years the development costs will reduce as the engines go through their life cycles and need less work. There will be no stupid penalties whenever an engine needs replacement etc.

I know this isn't a perfect solution and the manufacturers that supply a number of teams will have an advantage as will the likes of Renault who intend to only supply their own team, but I am sure the clever people can come up with a formula for costing based on these facts.

It would seem the FIA and Bernie Ecclestone are whipping up a new scheme to introduce cheaper engine for new and smaller teams; see the following:-

http://www.bbc.co.uk/sport/0/formula1/34629481

The initial suggestion is for a 2.2 litre V6 engine with a small hybrid component offered at capped price. Also Teams would be given freedom to develop their car as they see fit provided they stick within a capped budget. Teams may also choose not to operate a capped budget but must run to the current hybrid regulations. To free the teams opting for the capped budget from the mights of the manufacturing teams, the capped price engine shall be produced by a manufacturer who wins an open bid to supply these engines.

If we compare both engines broadly, capped engine would be 2.2 liters V6 which would require more fuel than the current 100 litre max fuel comsuption hybrid engines. Hence the 2.2L capped engine cars are going to be logging around large quantities of fuel and the associated weight disadvantages, particularly at the start of races. The idea of refuelling has resurfaced as a result. The current spec cars would be 600cc shy of the capped engines which would make it possible for the midfield teams like Force India with decent chassis to have comparative performance to the 1.6litre hybrid cars. Though with the added fuel weight disadvantages and possibly longer stops for tyre and fuel.

The idea sounds interesting on paper but how does that align with the FIA's commitments to greener F1. The 2.2 litre engines would be less greener as they would produce higher emissions. There would be a two tier regulations in F1. This is not new as MotoGP has been operating this sort of format for close to 4 years now. And had little impact at the sharp end of the grid where manufacturer teams like Yamaha, Honda and Ducati still remained.

The real question is how are they going to operate this new format, such that it does not turn out to be a punishment to the manufacturer teams. Could we be seeing Manufacturer teams disappearing from F1 in the near future? The other consideration is, should the 2.2 litre engine prove to be more competitive than the 1.6 hybrid engine, thus causing the manafacturers to abandon their 1.6 v6 engines; having a standard engine like in go karting, is likely to drastically reduce innovation in engines which would have transitioned to road cars. The technology competition that brings about novel ideas and designs would be eradicated from the series. The supplier of the capped engine would not be inspired to do much more than required by the specification provided. Some would say F1 would be losing its diversity. The very things that make this formula the pinnacle of motorsport.

Manufacturer teams would be seeking some level of parity in the regulation to ensure they can compete on a level playing field. The current token system would certainly put the manufacturer teams at a disadvantage. Unless the same rule would apply to the capped engine manufacturer. Finding the right level of parity between the two formats is where the key to success of this idea lies. If they get it wrong, manufacturer teams would simply lose interest in F1. We could be back to a strictly privateer team formula which is not necessarily a bad thing. The question is would Ferrari hang around this new formula? I can see Mercedes packing up shop if there is no commercial advantage in the new format for them. This is likely to be the case for Ferrari as well. I am sure you can imagine the impact of these two manufacturers leaving the series.

I suppose we should wait to hear more and see the reactions of the manufacturer teams.

[Rollo]

I suppose we should wait to hear more and see the reactions of the manufacturer teams.

http://www.autosport.com/news/report.php/id/121497
Mercedes motorsport boss Toto Wolff has expressed objections to the prospect of the introduction of a cheap engine alternative into Formula 1.
- Autosport, 25th Oct 2015

This afternoon, I heard Ron Dennis on the BBC World Service, express what sounded like utter disgust at the through that Honda might supply Red Bull with engines.

The reactions of the manufacturer teams are basically as pig-headed as Bernie Eccleston. F1 is currently in a race to eat itself - the embodiment of Ouroboros.