The Mole goes to the Temple

London's Inner Temple is a world lost in time, divorced from the mayhem that goes on outside its gates. The Mole had gone to visit his legal counsel, Norma Zaas (of the expensive firm of Scheister, Scheister, Zissu & Zaas) and they had settled on "a picnic" by the pond. There was a statue of a small boy watching them, bearing the inscription: "Lawyers, I suppose, were children once" and they were busy arguing whether or not this was actually true.

Norma said she remembered very well being a small girl.

"Before you became trapped in Chanel little black dresses?" smiled The Mole.

Norma broke into a large smile and remarked that The Mole had best start talking business because otherwise she, a taxpayer, would write to the Prime Minister complaining that he was wasting taxpayers' money.

"You know these lawyers," she said. "They love to feed at the government trough."

"I find it reassuring that there are still people who think that the Prime Minister would listen," said The Mole. "Anyway, I need some legal advice."

He rustled in a plastic bag he had brought along with him. "I need some legal advice."

He found the package of small port pies he had been searching for and waved one in the direction of Norma.

"I am sure I have a paper napkin here somewhere," he grumbled.

Norma looked at the pie with disinterest and sat down on the bench.

"This fight over engines," said The Mole. "It is all now down to an argument over whether or not Mecachrome should be allowed to bid for the tender to supply subsidised engines to the smaller Formula 1 teams. The manufacturers say no. The FIA says yes."

Norma thought for a moment.

"Well, obviously we need to know a few facts about Mecachrome," she said. "What exactly do they do?"

"They are mainly in aerospace," said The Mole. "Making grommets for airliners, doing boring engineering stuff and a few exciting things like Formula 1 and bits and pieces for the new Airbus A380 - you know the big double-decker thing that is delayed - and also some big new military plane called the A400M. Oh, and they are expanding in America. They have smelled money in NASCAR and they want some."

"Why Formula 1?" said Norma.

"A good question," said The Mole. "I guess they have the technology and want to sell it. I know that they do all kinds of secret work for other F1 engine companies. You know, special treatments and that sort of stuff."

"So they do a bunch of manufacturing work," said Norma. "Do they make their own engines."

"As far as I know they simply do stuff for other people," said The Mole. "They did buy the Mader company a while back and supply the engines for GP2 but that was an old BMW design as far as I recall. They are just manufacturing them. They produce and prepare all the Renault F1 engines but Viry-Chatillon does the design and the development work."

"So what would they be sellings?" said Norma.

"A rebadged version of the Renault, I guess," said The Mole. "You have to remember this is not the first time this has happened. They bought all the old Renault V10s back in the late 1990s and then did a deal with a company called Super Performance Competition Engineering. It sold Supertec V10 engines to some of the F1 teams. As I recall the teams paid a lot of money for the engines, SPCE or whatever it was called paid Mecachrome, Mecachrome paid Renault to do development work. And there were suitable margins all along the way so some people got rich. As I recall Supertec was managed by a Mr Flavio Briatore."

"Yes," said Norma, "That is history. But where would Mecachrome get V8 engines from?"

"Renault," said The Mole.

"So," said Norma. "We have established that Mecachrome would buy engine technology from Renault and then sell it to the smaller F1 teams.

The Mole nodded.

"The difference is that this time," she went on, "is that while Mecachrome would be paid by the smaller teams they would not have enough to afford the engines and so the automobile manufacturers would chip into a 15 million Euro fund to help them out."

The Mole nodded.

"So Renault would be paying into a fund in order to pay someone who will then pay it to develop engines," Norma said.

"Well, yes," said The Mole. "Although I am not sure that Renault is going to pay into the fund."

Norma rolled her eyes.

"All right. Well let us assume they do not. Who is there? BMW, Mercedes-Benz, Honda and Toyota. They are all going to pay into a fund that would be used to pay Renault to develop better engines for Mecachrome. That is insane. They would be paying Renault to develop better engines than they have! That is anti-competitive against themselves!"

Her oration had ended and she stood looking like a rather sexier version of the Statue of Liberty, although the pork pie in place of a flaming torch rather ruined the image.

"But apparently this is not the problem," said The Mole. "Of course the manufacturers are worried about this. It makes no sense at all. And that is the sticking point."

'Yes but who is insisting that Mecachrome be allowed to bid for the tender?" said Norma.

"The FIA," said The Mole.

"Is that the same FIA that is not allowed to dabble in commercial matters?" said Norma. "Or is that the FIA that is Pakistan's secret service?"

"The former," said The Mole.

"Well, it is very simple," said Norma. "It has got nothing to do with Mecachrome. There must be something else the FIA does not want to agree to."

"Yes," said The Mole. "That was my feeling."

July 27 2006

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