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DATE News (chronologically)
02/03/13
f1
Mercedes F1 doesn't have much to show for huge dollar outlay
Mercedes' latest corporate accounts reveal that the cost to the car manufacturer of competing in F1 skyrocketed to a record $380 million in 2011. That's despite the running costs of the Mercedes F1 team actually falling slightly, down 0.2 per cent to $197.4 million.

That slight fall is nothing compared to the 54.2 per cent increase in spending on the engine division, however, which rose to a total of $183 million.

That's because of early research and development of the new V6 engines that will be required in 2014 after a period of relative stability in the rules and regulations.

While Mercedes make money back on that investment by selling engines to other teams, it's still unlikely to make much of a return from the outlay. The engine department made a net profit of just $6.5 million in 2011, and after tax that ended up being a loss of $16 million.

The accounts show that the head count in the motorsports division rose by 78 staff to 989 in total, an overall wage bill of $94 million for the year. The costs don't include the likely sizeable outlay the team have since made on acquiring the driver services of Lewis Hamilton for the 2013 season.

The figures - allied to a lack of success in winning the championships - could well reveal the reason for the current managerial reorganization underway at the team in recent weeks, as Mercedes look to stem financial losses while adding race wins.

Former director of motorsports at the team Norbert Haug was ousted after the 2012 season and former Williams F1 executive Toto Wolff hired as an executive director to replace him, along with the appointment of former world champion Niki Lauda as a non-executive chairman.

"I think the first point to be clear on is that Niki Lauda is in charge. He clearly doesn't understand the non-executive part of his title," said Sky Sports F1 analysis Ted Kravitz this weekend. "I understand that Lauda has even made it clear to [team principal] Ross Brawn that Brawn reports to him, and that he then reports to the Mercedes board."

That's not likely to have gone down well with Brawn, who won the 2009 world championship with Jenson Button driving for his eponymous team before Mercedes subsequently bought it up - especially with Wolff's appointment also threatening to sideline him.

"[Wolff] has been brought in as 'executive director', which sounds an awful lot like a Team Principal to me," said Kravitz. "Brawn is a very proud man and you can imagine that he might have taken Lauda's appointment above him in his stride. But having someone like Wolff, with much less experience, come in alongside must have been grating for the World championship-winning team boss."

But Brawn's position is a weak one given all that financial outlay for so little return on the race track. The 'double DRS' initiative proved a dead end, and the team has only one race under the Mercedes banner - Nico Rosberg clinching the 2012 Chinese Grand Prix - which is simply not seen as good enough for a company of Mercedes' standing.

"Lauda may consider that the 'new broom' philosophy should extend to more people than just Norbert Haug," suggested Kravitz. "The team is, technically speaking, top-heavy - with not only former technical director Ross Brawn as team principal, but also three other former technical directors in Bob Bell, Geoff Willis and Aldo Costa.

"That this is rather more technical directors than one team needs," agreed Kravtiz, describing Brawn's current role as "the conductor of an orchestra and a big figure - both physically and metaphorically - in tying the team together." Crash.net

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