At The Travellers
NOVEMBER 28, 2005
The library at the Travellers Club is always a good place to meet ambassadors and spies, although the bar is probably better in this respect as diplomats and spooks generally drink rather a lot. The problem at the club is that the bar is in the basement and altogether rather too pokey for The Mole's tastes. He prefers to sit in the splendour of the library, which is generally considered to be one of the nicest rooms in London. It is a good place for thinking and The Mole goes there from time to time just to get a little peace and quiet.
His operatives, the famous Penelopes, become rather stir-crazy when not travelling in the winter months and tend to be rather noisy, indeed The Mole has recently nicknamed Penelope (Roedean) "Lady Chatterley" because of the incessant banter.
Much is suddenly happening in Formula 1, mostly away from the race tracks, and so the chattering has increased and while the Penelopes have been busy trying to discover how much of Formula One's new owner CVC Capital Partners is owned by Rolly van Rappard and how much by Stefan Oostvogels (the answer is 11% and 4% respectively), The Mole has been trying to think of the big picture.
Obviously CVC would soon buy Patrick McNally's operations in Geneva and consolidate the F1 revenues in one company. That will allow them to offer the teams a better deal and so head off the manufacturers championship which is still something of a threat.
But what interests The Mole most of all is how many of the manufacturers there are in F1 and how many there are going to be. At the moment there are seven: Ferrari, Renault, BMW, Mercedes-Benz, Honda, Renault and Toyota. Ford is not coming back having burned its fingers with Jaguar Racing but there are whispers that the other two majors, General Motors and Volkswagen, are both sniffing around the sport.
And the ambitious Hyundai is looking as well, keen to get into the game before the first Korean Grand Prix at Chinhae in 2009.
As Toyota closes on GM to become the world's biggest car manufacturer, the pressure is on GM to do something positive. The company faces strong unions, unsupportable pension commitments, the Delphi bankruptcy, the rising oil price, a poor product range and a reputation for building cars that look and handle like aircraft carriers. Cutting staff and closing factories will help cut costs but the company needs to move forward and a new product range in 2007 and a Formula 1 programme at around the same time would work wonders for GM's image. It is a problem announcing such a thing when you are firing thousands of people but F1 makes sense for GM.
The Mole chuckled to himself.
GM is a company that can make an accounting error worth $200m and not notice for a few years and so an F1 programme is really not such a big deal, particularly if such a deal attracted other US sponsors and was only really an engine-supply deal. Mario Illien, who once started a company called Ilmor Engineering with backing from GM, recently started a new company called Ilmor Engineering and is looking for work.
"Two and two makes five," said The Mole.
Still, it is a good idea.
And what about Volkswagen? The Alps are a-buzz with rumours that VW boss Bernd Pischetsrieder (a crazy F1 fan and a man who pushed BMW into the sport some years ago) has been talking very seriously with Red Bull boss Dietrich Mateschitz about an engine supply deal in the future. Mateschitz knows that he will never win anything with Ferrari, because Ferrari will not allow it for long, and so he has to find a manufacturer of his own. The theory is that VW subsidiary Audi will enter F1 in 2008 with Audi supplying engines to both Red Bull Racing and Scuderia Toro Rosso. If all goes well Audi would then buy Squadra Toro Rosso and run the team in its own colours.
Audi has won everything there is to win in racing from the World Rally Championship to the Le Mans 24 Hours and DTM and the only real step forward is into F1. The problem for Pischetsrieder (apart from the fact that no-one can ever spell his name right) is that he is currently fighting to stop his boss Ferdinand Piech from making Volkswagen a Porsche subsidiary. That is an interesting fight as it is a bit like an elephant being eaten by a mouse but Piech is clever and Pischetsrieder needs to be careful not to make any major mistakes.
The Mole paused.
And then, of course, there is the question of how many of the current manufacturers will stay in F1 and how many will disappear. The word is that Renault will give the sport a couple more years and might then switch to Nissan branding as Renault and Nissan are sister companies and Nissan wants to increase its sales in Europe. The Mole's deep throat at Viry-Chatillon has also suggested that Renault might sell the team to someone rich and stay on only as an engine supplier.
The Mole pondered how long BMW will stay in F1 if its project is not successful within five years.
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