What’s up in the UK? Kalkhoven to buy Cosworth

UPDATE #4 This SPEED TV article says a deal is close for Cosworth, but does not hint at who will be the buyer. Will it be Kalkhoven? Briatore? Eddie Cheever and GM? The Midland F1 team? There have been all sorts of rumors but our sources say Kalkhoven has his fingers in it one way or another. 10/22/04 We are upgrading this rumor to 'strong.' This Grandprix.com article says, Cosworth Racing is also a company in demand with at least eight buyers we have heard about, most of which are apparently interested in investing the necessary money to run an F1 program. The man who is believed to be at the top of the list of buyers is Champ Car owner Kevin Kalkhoven, who wants to secure the engines he needs to keep his racing alive while at the same time, get his hands on the Cosworth facilities in Torrance, California, which is a very advanced facility with a good team of people. [Editor's Note: It will be interesting to see whether Kalkhoven buys just the Torrance CA. branch to rebuild engines, or whether he buys the UK piece as well, thereby acquiring the expertise to not only design new F1 engines, but to design new Champ Car engines as well. As you know, we have recommended that Champ Car provide a Champ Car engine to any manufacturer in the world (up to 6 max.) who wants to come into the series and put their name on the engine (i.e. badge it). In this perfect scenario Champ Car gets all the benefits of controlling runaway speeds, cost and technology, but allow the manufacturers to participate in Champ Car as a marketing vehicle for their passenger cars rather than an R&D vehicle, which has historically been the case but results in the evils mentioned. If Kalkhoven does indeed buy Cosworth, all this becomes possible. We shall see how it plays out.] 10/14/04 It seems the Kevin Kalkhoven contingent was in the UK for a number of days and even after Kalkhoven departed for Australia (the long way around) staff stayed behind in the UK to take care of the final touches of some deal. Speculation continues to center on Kalkhoven buying Cosworth. Whether that means Cosworth, or also Cosworth Technology, is anyone's guess. Either by coincidence or perhaps out of some grand plan, Audi AG has decided that it wants to sell Cosworth Technology, its high technology drivetrain company, at the same time Ford is selling Cosworth. Cosworth Technology is now unrelated to Cosworth Racing, the racing division having been sold to Ford by Audi for $150m back in 1998. The rest of the company, comprising the engineering, manufacturing and casting activities of Cosworth, were renamed Cosworth Technology. It is believed that Audi is asking only around $80m for the business, which employs 1000 people in Northampton, Wellingborough and Worcester, and at Novi, Michigan. At one time Audi owned both Cosworth and Cosworth Technology (it was all one company at the time).

The fact that both are for sale at the same time is intriguing. We suspect that some grand deal is in play and Kalkhoven is right in the middle of it. But why would Kalkhoven want to own a racing engine manufacturer? We suspect it is because he does not want to see happen to Champ Car what has happened to F1, and happened to CART before that – that being the manufacturers having far too much control over the sport. The recent debate over V10 vs. V8 engines in F1 has the FIA being played like puppets by the manufacturers with some wanting to keep the existing engines while others wanting to switch to the smaller V8.

If Kalkhoven owns the company that makes the engines, several possibilities arise, depending on how the new Champ Car engine rules read in 2006 when Champ Car is slated to get new cars and new engines. One scenario is our badging concept whereby Kalkhoven builds and maintains all the engines and sells the badging rights to any number of car manufacturers who can put their name on it. Whereas Cosworth and Cosworth Technology were owned by Ford and Audi respectively, if the engine is a "Kalkhoven" engine, or a "Champ Car" engine, with zero connection to a competing car manufacturer, a company is more likely to agree to put their good name on this generic engine and use Champ Car as a marketing tool rather than an R&D driven tool.

As we have argued in the past, the best possible scenario for everyone involved is to have 4 or 5 car manufacturers each and have three 2-car teams (6 cars), all of which run the same "spec" engine, i.e. the entire grid, with the only difference being the nameplate on the cam cover. Each car manufacturer would be able to have enough influence and say on their three teams to call them their own, and have the requisite bragging rights when they won. There is far more to winning races than the engine, just as there is far more to building successful passenger cars than the engines that power them.

If you talk to the techie folks at each of the manufacturers they bristle over the idea of not building their own race engine, because that is what they do and what they know. However, when one examines the economics of racing, and the astronomical escalation in costs we see every time the manufacturers are allowed to run roughshod over a series, it's clear to us what needs to be done to gain control of one's own destiny. We boldly predict that if a series tries this concept, and we hope Kalkhoven is on the same page, it will he hugely successful, and will form the model by which all racing series follow in the future. It just needs someone with Kalkhoven's foresight and resources to perhaps make it finally happen. The badging concept is the best of both worlds, manufacturer involvement without runaway costs and runaway speeds caused by significant HP increases each year. F1 is talking about 1,000 HP engines for 2005, which is of course ludicrous. Mark C.

10/11/04 Rumor has it that Champ Car President Dick Eidswick will meet Kevin Kalkhoven in the UK tomorrow for an important meeting. Might it involve the Manchester race? Perhaps the Cosworth deal? Might they be meeting with some manufacturers? What about those rumors regarding Richard Branson? Still some speculate a meeting with Bernie might be in order. We hear things are really heating up at Champ Car as many deals are headed toward fruition.

10/06/04 The future of Cosworth Racing as an F1 engine supplier remains uncertain, despite optimism that it will be sold as a going concern. Insiders say a number of bidders have come forward with offers to buy the company, which supplies engines in Champ Cars, IRL IndyCar, Superbikes and a number of other series in addition to F1. Cosworth turns over £67 million per year, generating approximately half its income from F1. Speculation has linked Renault F1team principal Flavio Briatore with a buy-out, possibly with a view to becoming an F1 engine supplier to private teams. Other potential buyers remain interested in Cosworth’s non-F1 divisions. Kevin Kalkhoven, founder member of the Open Wheel Racing Series which runs Champ Car, admitted talks were continuing as to the future of Cosworth’s supply of the 2.65-litre V8 turbo XFE motors for next year and beyond. He said: “We have been in a lot of discussions with Cosworth regarding our engine supply over the next couple of years. But that’s as far as it has gone." Autosport Magazine [Editor's Note: We expect that whoever buys the Jaguar F1 team will get first crack at Cosworth. If they don't take it we suspect it might be split into two companies, one in Europe for F1 and one in the USA for the IRL (Chevy engine) and Champ Car.]

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