The ups and downs of the world economy drive the Formula 1 teams crazy

The last earthquake suffered by the Formula 1 It is not being detected in the most bumpy circuits, but in the offices

The ups and downs of the world economy drive the Formula 1 teams crazy

The last earthquake suffered by the Formula 1 It is not being detected in the most bumpy circuits, but in the offices of its administrative staff. What started as a storm with the pandemic is turning into a tsunami, and everything is being caused by the merry-go-round of emotions of the global economy.

The increase in costs, the depreciation of the value of the various currencies, and the fluctuations of the changes are becoming the real enemy of the progress of some teams. Those who suffer it with special intensity are the English, and for various reasons. The North American bank Citi (formerly Citibank) indicates that the inflation of the United Kingdom this year could reach 18% or even 20, very far from the 13% that the Bank of England forecast at the beginning of the summer, or very far from the 2% predicted for 2022 after signing Brexit. Seven formations of the ten that make up the grid have their operational headquarters in England, one in Switzerland, and two in Italy. Since Boris Johnson’s government ruled that his country would leave the European economic concert, the issue has gone from bad to worse for his countrymen.

Energy crisis

Legend has it that when McLaren first started its wind tunnel they left the town next door without power. The consumption of this type of installation is such that it devoured all the energy available in the area. Every British team has one, and even the ones that build their engines have at least two; the second even more engulfing of energy. It is a kind of wind tunnel specifically designed to supply injected air at full speed at hundreds of degrees —around 1,000— to developing turbochargers designed to feed their engines with horsepower.

The system not only has to blow air, but also heat it and keep it at extremely high temperatures. The Mercedes one, for example, has a power generator just for it. Rumor has it that it costs so much to maintain this system, that there are those who think that the Renault engine had a worse performance in recent years, because they do not even start this from the cost involved. Needless to say, the rise in electricity costs in Britain is breaking all records and makes the rest of Europe seem almost like a gift.

Many of the engineers that make up the squads of the teams, usually around half of their staff, come from two universities: Oxford Brookes and Cranfield. There are others such as Bath, Southampton or Bologna, but the density of technicians who have passed through these two study centers, either to complete the full degree or their famous masters, are the majority. Since Brexit was established, license plates have doubled in price. If before these studies cost about 8-9,000 euros to change, now the course costs 18,000. To this should be added the maintenance during the almost nine months that it lasts, which has also increased its price. This makes it a little more difficult to access this training, a gateway to some teams like Alpine, which is costing more than usual to find trained personnel.

Another of the Chinese in the shoe, and that is driving its managers crazy, is the rise in geometric progression of the price of logistics. It is very difficult to calculate the exact figures because the needs of each team vary. Despite this, it is known that in each race, and there are 22 this year, they move no less than 30 tons per appointment, being very careful; the most powerful teams can double this figure. In January 2020, moving a shipping container cost less than 2,000 euros; today they are starting to touch 20,000. Air transport, the most popular in a competition with races on different continents and consecutive weekends, is increasing by similar values ​​on account of the increase in fuel prices. The entire assembly of a race displaces about 300 trailers, between teams, advertising assembly, stages, communications systems, television, etc. At the price of diesel, the bill grows.

If we add within the logistics lot, that each team usually moves a hundred people to each track and plane tickets are also going up, the bill in the section is becoming unbearable. Until 2020, the annual costs of this section were around eight million euros on average; teams fear that at the end of this season they will be shot above double.

suffer in silence

Seeing the financial chaos that came to them, the teams requested an increase in the spending cap set in the financial regulations of the category. From 2021, the teams have to abide by maximum spending lines under penalty of incurring heavy penalties if they exceed the established limits. When those responsible did the math and saw how “scarce” the 140 million dollars scheduled for this 2022 were, they asked the FIA ​​for a raise. Before the start of the summer they were allowed an increase of 3.1%, (about 4.3 million dollars) but seeing the turn that everything is taking, it is clearly insufficient. Some team principals, such as Toto Wolff (Mercedes) have called for that figure to be doubled… at least. That budget limit was planned to be 135 million by 2023, but everything indicates that the figure will be forced to change.

Teams suffer in silence and some take it better than others. In Alpine, for example, anticipating what was to come, they saved a fortune thanks to the fact that they made an enormous accumulation of material at the beginning of the year – above all, energy quotas at a fixed price. Worse they take it in Sauber, a Swiss team that flies the commercial flag of Alfa Romeo, has been suffering for years living north of Zurich. Its managers calculate that in the last decade its operating costs have increased by a whopping 50% just because of the currency exchange. These are going to be lucky, and their face color is going to change shortly. It is quite possible that before September Audi will announce the acquisition of the team, or at least a large percentage of its shares, to end up running with that commercial name in a foreseeable and assured way in 2026; and with stickers on the spine before. Do you bring money? The door always open.