by Max Mosley
Like most brilliant engineers, innovation was what motivated him. I entirely understood this, but I knew Formula One could not afford to give engineers free rein and a blank cheque. Even if the big car companies were prepared to spend lavishly in the good times, come the first downturn they would stop and Formula One would be left with a major problem.
Following the Monaco meeting, the seven manufacturers held a series of meetings among themselves and came up with a long list of proposed restrictions on engine architecture, dimensions and materials, with the objective of reducing the scope for innovation and research and hence costs. But Ford and Renault wanted to go further and produced a minority report suggesting even greater restrictions for even greater reductions in costs. That struck us as sensible, so we announced we would accept the minority report.
Two of the car companies threatened arbitration, saying any restrictions that had not been agreed by all seven were illegitimate. Unanimous agreement was needed for short-notice changes (the argument I myself had used against the FIA 25 years earlier). They asked for a meeting. I joined them in a hotel room in Fontvieille in Monaco, where one of them began by announcing they were going to court the following day to get an injunction to stop us. I stood up to go, asking why they had wasted my time when they intended to litigate. They said well, not literally the next day, but they would sue if we didn’t back down.
We didn’t really do backing down so I pointed out that it was more than just Formula One at stake for their employers. It was obviously not a core business for them but it was the FIA’s premier championship and we didn’t want it needlessly interfered with. The more restrictive rules would not penalise them in any way; they would merely reduce the temptation to waste money. They were the same for everyone. However, I continued, what went on in Brussels was a core business for them and our co-operation there was useful to the car industry. We effectively held the ring politically between them and the more extreme consumer organisations that lobbied in Brussels against cars and carmakers.
So, before starting arbitration proceedings and applying to a court for an injunction, would they please explain to their respective main boards that we were always as helpful as possible in Brussels provided, of course, our help was consistent with the interests of the millions of motorists who belonged to our various member organisations. However, our goodwill and co-operation could easily be withdrawn. They left the meeting somewhat put out, but in the end agreed to the enhanced restrictions. Eventually, things got back to normal and we were all friends again.
Disappointingly, not even the more draconian restrictions significantly reduced spending. All we really achieved was a decrease in the power gained per million dollars spent. Our next idea, after the usual discussions, was to freeze the engines – a complete ban on changing anything in the engine that moved or could only be reached by opening the engine. The engine builders could no longer spend money on developing the moving parts or cylinder heads etc.
But even this didn’t really solve the problem. With no modification allowed to any internal part of the engine, the rich teams spent massive amounts on bringing air to it instead. They set out to develop the interior aerodynamics of the air boxes. The experts had assured us that any gains from this or from the exhaust system would be negligible. They were wrong. One should be very careful of experts. That so much power could be gained in an area no one had really bothered about until then was instructive but nevertheless annoying.
Finally, we hit on a measure that did save a great deal of money. This was to restrict the number of engines a team could use during the season. Where it had been quite usual to use two (and in some cases three) engines per car per weekend, now the engine could not be changed until it had done two (and eventually more) entire race weekends. Again, there was very strong opposition when this was first proposed and some of the engine builders told us this would increase costs, not reduce them. Their main argument was that, by forcing the teams to run each engine for longer, we would increase the time test and development engines had to spend on the dynamometer and hence their cost.
This was true but the extra cost was trivial compared with the saving made by reducing the number of engines used during the season. Our theory was that a rebuild costs pretty much the same whether you do it every 500 km or every 5000 km, and it turned out to be correct. In the end, the rule was eight engines per car per season. When the rule was first proposed, we were told the failure rate would increase; but we were confident the opposite would apply and it would actually decrease. Failure is most likely to occur towards the end of an engine’s life and, as there would be fewer end-of-life moments per season, there would be fewer failures. Again, our theory was proved right; seen from the outside, nothing changed despite the massive reduction in engine costs.
One of the team principals who had fought almost all of our cost-reduction measures was kind enough to say later that, without them, his team would probably no longer be in business.
Another of our initiatives, the introduction of a standard engine and transmission at the end of 2008, never attracted enough support. What it did do, though, was provoke an emergency meeting of the new Formula One Teams’ Association, FOTA, following which the car manufacturers supplying engines for Formula One agreed to cap the costs. These came down to €8 million for the 2009 season and €5 million for 2010. I thought even these figures unnecessarily high, but they were at least a major improvement and, incidentally, the biggest cost saving FOTA ever achieved.
I still think a standard engine was a good idea. Carmakers already shared components and technologies for road cars. So why not share the basic Formula One engine and demonstrate technical excellence with the ancillaries (energy recovery etc.), where there was so much potential for road-relevant research? Sacrilege to a traditionalist, perhaps, but we would essentially be treating the engine as a commodity and channelling all the R&D effort into the new energy-saving technologies. Costs could have been kept well under control and it might have led to interesting developments in future technologies for the ancillaries. But the basic idea of moving away from refining known technology, and putting engineering effort into revolutionary ideas for energy efficiency, never really appealed to the teams. Understandably, perhaps, they saw this as an unnecessary risk. They just wanted to go racing – if possible, with the best car.
Looking forward, we are likely to see continued refinement of known technologies combined with new techniques for energy efficiency. This means there will probably be no more independent commercial suppliers of Formula One engines, such as Cosworth. It will almost certainly not be economic for them to pay for the necessary R&D. I’m not sure this is a good thing in the longer term. It might risk giving great power over Formula One to two or three car companies, with the ever-present danger that one or more will suddenly decide to stop racing, perhaps for reasons that have nothing to do with motor racing itself. I always felt Formula One needed at least one independent engine supplier, so as not to have to rely entirely on the car industry. It remains to be seen if I was wrong.
Technically, the new engines that came in for 2014 are interesting, but with major manufacturers now involved in engine development, it would have been wise to have a cap on the cost of supplying a team with engines for a season. The car industry should not be allowed to pass on road-relevant research costs to the teams.
Talk of a breakaway by Formula One teams rose in volume throughout 2002 because they thought Bernie was not giving them enough money. If he gave them more they’d only waste it, was Bernie’s rejoinder, but in essence both were right. Arguably, Bernie was not paying them a fair proportion, but their belief that a bigger slice of the Bernie money would make all their financial problems disappear was patent nonsense. Without financial discipline they would continue to waste money, as the battles over cost reduction had already shown.
As part of their preparations for a breakaway the teams had approached two of the big international sports management compan
ies, asking for proposals and business plans. Interestingly, both said it was essential that there should be only one championship. If Bernie asked the FIA to sanction a rival championship and called it Formula One (which, arguably, was his right and our obligation), the rebellion, they said, would be fatally flawed. It would not be possible for a breakaway to command the fees and television time essential for its success if it were one of two competing championships.
Needless to say, this is exactly what Bernie had planned should the need have arisen. He would have held a championship for GP2 cars and asked us to sanction it as a world championship. GP2 was then a commercial racing series that Bernie controlled and was just below the level of Formula One (rather like the FIA’s Formula Two back in the 1970s). It was perhaps three or four seconds a lap slower than Formula One and was the series from which most of the new drivers came. Quite apart from our contract with Bernie, our arrangements with the EU Commission meant we would not have been able to refuse. And he would almost certainly have had the right to call it Formula One. I believe it could have been a reasonably credible championship series.
The FIA was not directly involved but we were nevertheless watching with interest. Would ‘Grand Prix World Championship’ (GPWC), the teams’ organisation, try to run entirely outside the system or would they ask us to regulate their championship as a rival to Bernie’s? In 2002, GPWC engaged investment bankers Goldman Sachs and law firm Denton Wilde Sapte to prepare the plan. The result was a bulky, highly confidential document that, needless to say, quickly found its way to me. I was intrigued to see that it envisaged GPWC ‘appointing’ a regulator.
It seemed the three-year battle we fought with the EU Commission on precisely this point had not been noticed by GPWC or by their advisers. The fundamental element of our settlement with the commission was that there would not be multiple competing motor sport regulators (see below). So it was obvious to me and to the FIA lawyers that the whole plan would fail unless they first came to the FIA to authorise and regulate their series, something they did not seem to have planned. In the event, however, the teams did not stick together. As usual, Bernie split them by paying Ferrari over the odds, then picking off the rest.
The teams’ advisers were doubtless influenced by the way in which independent operators had been able to set up in tennis and cricket without the relevant international governing body, or in boxing with four or five rival bodies. Unlike motor racing, those sports do not need massively expensive racing circuits that depend on licences from the governing body for their everyday business. They can hold an event almost anywhere. In motor sport, even rallies need the local government, police, insurance companies etc., none of whom feel comfortable without the blessing of the established sporting authority and its safety experts. There was an obvious lack of research into the basics, quite apart from the failure to note the FIA’s deal with the European Commission.
Having been secretly shown the business plans from the two sports management groups, I was convinced the proposed GPWC series was doomed even if they asked the FIA to regulate it. Both plans assumed they would be able to charge race promoters and TV companies the same fees Bernie was getting. In the first year of their new series, the GPWC plan projected an income of €775 million, rising to €1473 million in year five. That was claptrap – it was never going to happen. Even if Bernie failed to set up a rival championship as the two sports promotion companies advising the teams had feared, the race promoters and television broadcasters would both have been in an impossibly strong bargaining position. They would have been able to dictate terms that were very much less favourable to the teams than Bernie’s. On top of that, Bernie could almost certainly have stopped them calling it Formula One even if the FIA were sanctioning the series.
That the teams could not run entirely outside the FIA structures became clear during the FOCA–FISA war more than 20 years earlier. Then, Balestre’s killer weapon was the FIA’s ability to prevent a circuit running one of FOCA’s non-FIA races by stopping all FIA licence-holders using the circuit. That would have been decisive had we as FOCA not been able to counter it in the courts by suing the FIA for interference with contractual relations. But now, relationships had fundamentally changed. The teams had no contracts in place – Bernie had the contracts with the circuits and we had a contract with Bernie. Most importantly, we had come to an agreement with the EU Commission that would stop any legal threat based on competition law.
On the other hand, although we could stop them running outside the FIA structures, we had to be prepared to sanction any international championship that satisfied the FIA’s criteria for safety and sporting fairness, even a direct rival to Formula One. The breakaway teams could have written their own detailed sporting and technical rules just as, say, Formula Renault could. But the International Sporting Code would have applied over and above these rules, just as it does in Formula One. So, too, would the FIA criteria for safety and fairness and its system of stewards and International Court of Appeal.
I pointed all this out at a dinner Flavio Briatore arranged with Patrick Faure, then a very senior Renault executive. When I explained that no circuit could afford to lose all its other events, Patrick’s response was, ‘Then we will buy the circuits’, which didn’t strike me as very realistic. Imagine going to the board of an international automotive conglomerate and asking them to buy a number of racing circuits with very high overheads so that their Formula One team could race on each circuit once a year with no other competition activity. Worse than that, one of the directors might ask what the quarrel with the FIA was all about. One can picture the board’s reaction when told their team was fighting the governing body because it was trying to reduce the cost of Formula One so the teams could race on smaller budgets.
The reality was that the teams, although now better financed, were far weaker than Bernie and I had been in 1980 during the FOCA–FISA war – and the FIA was now far stronger. I could remember vividly how difficult that had been from the other side. I never found out whether, more than 20 years on, the teams intended to run their breakaway under the FIA system or entirely outside it. I don’t think they had thought it through properly and doubt they knew themselves. There’s a tendency for outsiders and even some team principals to ignore the vitally important structural subtleties of the sport.
Then Professor Burkhard Göschel, a BMW main board member and its head of research, became the chairman of GPWC. We had met briefly on other occasions and he came to Nice airport on 7 August 2006 together with a senior BMW lawyer, Jürgen Reul, for a serious discussion about Formula One and relations between the FIA and the car manufacturers. This was a revelation. Instead of the usual tiresome debate, I found myself talking to someone who was brilliantly clever and focused on what really mattered.
We quickly agreed that before discussing rules it was necessary to decide what the objectives were – what we were trying to achieve. It was hardly ever possible to get the teams to adopt this approach because each was always either seeking an advantage for itself or busily resisting change of any kind. I quickly found common ground with Professor Göschel about the sort of technology that should be developed in Formula One. He was committed to the search for energy efficiency and way ahead of the teams he led. As already mentioned, for some time I had wanted to move the sport’s huge R&D expenditure away from endlessly and pointlessly refining known technologies (gearboxes, for example) to a search for energy efficiency, in particular limiting power by restricting fuel instead of a wholly irrelevant limit on engine capacity.
To my delight, Professor Göschel agreed. What’s more, he knew far more about the relevant technologies than I did. He talked about wasted energy and how, broadly speaking, only about a third of the fuel bought at the pump actually propels the car; the other two-thirds is wasted as heat lost from the radiator and energy out of the exhaust. He was as fascinated as I was at the prospect of recovering and using some of this energy, and the possibility of using Formula One to
stimulate the research. Moreover, he was fully informed about the latest work in these areas. It was a great moment. After years of trying fruitlessly to convince the teams, here was someone in charge of their group who was an established world expert in exactly the area that I believed we needed. I was convinced that with his knowledge and backing, we might really achieve something.
Having agreed the objectives for the new rules, it was just a case of finding the most efficient way of achieving them. Professor Göschel, too, saw the meeting as a success. A few months later he told Autosport:
After this meeting, Jürgen Reul and I thought we had made a big shift. We were so excited we went to the beach in Nice in our suits and ties and with our briefcases in hand, it was very warm and everyone was sitting in their bathing suits, so on the beach we both had a glass of red wine.
For my part, I gave Flavio Briatore a call after the meeting and told him I thought we had a breakthrough. Tellingly, he did not seem as pleased as I thought he would be.
When we started looking seriously at where Formula One should be going, it seemed obvious that energy efficiency should be the performance differentiator. Simply running the engine faster to get more power was obsolete, likewise aerodynamic research that had no relevance to the real world. Peter Wright, by now one of the FIA’s top technical advisers, and former Jaguar team principal Tony Purnell turned these thoughts into a very interesting proposal to allow Formula One cars to achieve the same performance with only 50 per cent of the fuel consumption, all this by means of fully road-relevant technology including movable aerodynamic devices. It would have sent a positive message about Formula One that many sponsors would have found attractive. Most of them nowadays are very environmentally conscious and, with intelligent rules for engine supply and use, we could have achieved this at the same time as reducing costs.