F1 row threatens existence of team's budget cap already
May 24 - Smaller teams are continuing to resist efforts to ramp up the budget cap as a response to inflation.
The $140 million budget cap has also become an issue in recent weeks as Ferrari's Mattia Binotto expressed concerns about Red Bull's rate of car development.
"It is no longer possible to bring new parts to every race," he said.
"At the pace of development that we are now seeing, many teams will soon reach the limits of the cost cap."
A source told Auto Motor und Sport: "If everyone is honest, there can be no further development after the Canadian GP."
An unnamed team boss added: "We'd have to lay off 50 people."
Red Bull has dismissed the accusation of questionable spending on car updates, but team boss Christian Horner is now warning that it is in fact spiralling inflation that is the big problem for teams.
"Some teams won't be able to do the last races of the season," he is quoted as saying by Auto Motor und Sport.
Alfa Romeo boss Frederic Vasseur, however, says it's nonsense to insist that inflation is akin to "force majeure" as an excuse for raising the budget cap.
"Inflation has nothing to do with force majeure," he said. "The pandemic was force majeure. Inflation is a normal process.
"The teams that don't have much room for improvement can react to it very easily - just shut down their wind tunnel and build fewer parts.
"If we give up on the rules now, that would be the end of the budget cap."
Aston Martin's Otmar Szafnauer agrees: "If we can do it, the others have to do it too."
✅ Check out more posts with related topics:
So RB spend all the money now in hope of the budget cap being raised, the penny has dropped.
I did say the WDC might be decided by a shady accountant.
And i say with inflation in the uk at 9% + any greed businesses and suppliers want to add on, and freight costs doubled, utility costs to keep the factories running also up 50%-100%, your talking out of your.. f2 with 7-8 of the teams based in UK they are ALL subject to inflationary pressures, which incidentally includes salaries .
I agree with a cap and to a degree.. inflation, live with it, but it cant be ignored fully, For freight, let them spend what the EXTRA freight costs without it affecting there budgets
Obviously you weren't paying attention during Mathematics at school .
Or was that post (with no mention of Sir Lewis ) still too racist for you ?
If teams have to stop car development sooner to avoid force majeure event withdrawals, so be that.
"It is no longer possible to bring new parts to every race," he said.
That is a GOOD thing, not a bad one. Otmar Szafnauer over at Renault did a long interview yesterday and put all of this in perspective. My take, if we each have $5 to spend on lunch, spend it wisely, dinner is a long way off.
that's barely one beer?
Yep, manage your budget. Pass on the beer and use the fiver for nourishment. As I said, it's a budget for a reason.
Or, maybe a compromise. If Team A exhausts their budget and can't potentially afford the "baseline" expenses (Travel, Tires, etc.) ... then enable them to 'borrow' from the 2023 and maybe the 2024 cap. So, if you need $5M to travel to the last race, you can take $5M off your 2023 Cap or spread it over 2-years (e.g. 60% in 2023, 40% in 2024).
However, add a string or 2... such as any team doing this would have to open their books for a full (and publicly published audit) to ensure things are above board. Adding that last part to enable a path, but make it painful. OR, accept a reduction of 20% of CFD and Wind Tunnel (each) time for 2023. Generally, something to enable it, but make it 'hurt.'
I generally think, some version of that could be made BAU. So that in a team develops a dog of a car (Aston Martin), they can spend up (to a limit of say $10M) to fix it... but they'd have to borrow it from next year's cap. So, instead of getting $135M in 2023, they'd only get $125M. And, you can only borrow against the cap if you don't have any cap debts (e.g. so you can't just consistently borrow from future caps and push it down the road).
Sounds like the way the US guvment runs their 'budget'. It's called a budget for a reason. It's what you have to spend, manage it for heavens sake.
So put another way, if a team spends 100M this year building a car, and inflations at 10% then next year it costs 110M to build even the same car, and the next year etc etc , now i'm definitely not teaching anyone to suck eggs, thats K-Mags job all im saying is how does that correlate to a further decrease in the budget cap for 23 of 135M .
So what will happen Something or nothing , highly likely a compromise, but heh what do i know....yeah yeah not much blah blah lol
So, they hired huge staffs at known, fixed salaries. Now these people work and develop new kit...
Why does that suddenly cost more?
If they stop developing, then why Havre them? Just lay 50-100 off after Canada and use that money for Cavier Weenies in Miami or sandwiches for DIs in the Red Bull tent...
Silly whining in my opinion
✅ Checkout the latest 50 F1 Fans comments.