CART's move to stay with
the 2.65 L turbo engine platform was made for some obvious reasons, and
some not so obvious. The obvious reasons were spelled
out in CART's Sunday press release - i.e. cost savings, equal engines
for everyone, stability, and the retention of a key part of CART's
heritage - the wonderful sound of the turbo powerplants.
However, it's the not so obvious reasons that may surprise you.
First a little factual
background.
Although we were not in attendance at the now infamous CART Franchise
Board meeting last October in Houston, whereby it was voted that
CART would switch to an IRL-like 3.5 L normally aspirated engine, we
have been told by multiple sources in attendance that Roger
Penske fought vehemently for the IRL 3.5 L engine, and threatening to leave CART
for IRL if the change was not approved.
So compelling were their
apprehensions and fears of losing Penske,
arguably their #1 team, and key sponsor Marlboro, the other Franchise
Board members likely felt the need to vote for the change. In spite of the fact
that this vote was past CART's March deadline for announcing
new engine rules for 2003, and knowing that Honda lobbied
strenuously for CART to retain the
turbo engine formula until 2004, CART knew they were risking Honda's
alienation. Because they were past the
March deadline, the vote needed to be over 75% in favor to pass.
And pass it did, that is how much the team owners wanted to keep
Toyota and Marlboro Team Penske in their fold.
Toyota said they would
only supply CART a 3.5 L N/A engine in 2003, and CART didn't want to lose them either,
so one certainly can't place the entire blame on Penske's influence.
However, the Franchise Board knew they were in jeopardy of
either losing Honda, or Toyota and Penske.
The vote for the 3.5 L engine was basically the lesser of the two evils.
Then, with the 3.5 L vote he wanted, Penske waited a few weeks and
did exactly the opposite of what he promised the other Franchise
Board members, he announced he would leave CART and move his team to
the IRL.
At that time, it was
totally unknown that Penske apparently had already decided to move
to the enemy camp months earlier. During Penske's surprise birthday party
in May at IMS, given by his wife, Roger thanked everyone for
joining in the celebration. In addition, he made special mention of his 'friend' Tony George
and the fact that his decision to switch to the IRL was made a year ago.
This is about the same time (June 2001) rumors first surfaced that Penske would
move to the IRL.
It should be remembered that on numerous occasions, Penske
called for a merger of CART and IRL. He felt strongly that
the two series should be one if they were to survive and prosper.
Almost everyone agreed.
However, as we have
noticed recently, Penske's comments have changed. He has now
been quoted in the media that only one series can survive, and we
would know the answer
within the next 18 months. No longer was he calling for a
merger or unification. He had clearly chosen sides, and that side was the
IRL series, the series run by his 'friend' Tony George, and aided
and abetted by ISC. Remember that Penske is a major
stockholder in ISC and a prominent member of their Board of
Directors. It's clear to everyone in the industry that ISC is
not a friend of CART's.
So why the sudden change
by Penske, and why CART's sudden engine reversal?
Consider that if Honda or
Acura were willing to badge the Ilmor engine in 2003 for CART, and/or if
Toyota had committed to CART, CART would have likely retained
the 3.5 L N/A engine. However, when no 'major' car manufacturers were
willing to get behind CART for 2003, and faced with engines with names that
the average consumer would not identify with (i.e. Ilmor, not Honda; TRD, not
Toyota; and Cosworth, not Ford), CART reverted to Cosworth's common
2.65 L turbo engine proposal.
It was also clear that CART's 'Olive Branch approach' in adopted the 3.5 L
spec engine was to facilitate bringing IRL and
CART closer together. Subsequently it became obvious that Tony George
absolutely wanted CART dead ("I bring my hammer to work everyday" was his recent
comment, when asked if he had put another nail in CART's coffin),
and faced with having an engine spec that their 'enemy' (as recently
stated by Chris Pook) dictates, it was not in their best interest to
continue down the 'common equipment' path. The last straw for
CART was when it became obvious that Honda and Toyota would not
support the CART series, and would only permit TRD and Ilmor to sell
their engines to CART teams for a profit. By so doing, CART
owners in effect would be subsidizing Toyota's and Honda's IRL
engine program.
In my judgment, CART's enemies wanted common equipment with no
manufacturer 'badging' to eliminate the flow of money to CART.
By so doing they could make the CART product a clone of the IRL
product. Once accomplished,
CART would be nothing more than an IRL series, sans major engine
manufacturer money. Therefore, with the teams already having the same
equipment, it would be that much easier to induce them to
switch to the rival IRL series.
Under this scenario,
CART would find itself in a battle with entities with no short term
profit goals (Tony appears to have a bottomless pit of money to
support the IRL), who will give away their product for free if need
be to achieve their long term agenda. That agenda is the total elimination of CART and the
much ballyhooed promised land of a single U.S. open wheeled series.
In Business Strategy 101
class, you are taught that if your adversary wants you to
commoditize your product with his, he does so for a reason. The
reason is simple and obvious. It makes you easier to destroy. You
are also put in the unenviable position of having your foe dictate
the direction, degree and pace of change for your product.
Do you think your adversary would sit still? Copy his product and
just when you think you have commonality he makes another costly
change,
forcing you to follow, in this case to keep your equipment the same
as the IRL so your teams can use it for the Indy 500. Under
this scheme, your ability to play offense is eliminated, and you are
forced into a series of defensive strategies; each time struggling
to save face with the public, who think you are a puppet being
controlled by your adversary, and costing your teams more money to
keep current with your adversary's whimsical changes.
Certainly, the spec turbo engine is much lower cost for the CART
teams than the 3.5 L N/A engine. From my perspective, this was
reason enough for CART to change.
However, realize that
CART's decision to change had as much to do with saving its teams
money, as it had to do with protecting its teams and controlling
and ensuring its own future.
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