MARCH 24, 1997
Renault's massive losses
THE Renault car company last week announced a loss for 1996 of around $750 million, explaining why it was considered essential last June for the company to announce that it was withdrawing from Grand Prix racing at the end of this year.
The newly-privatized company now faces the need for massive restructuring - which will involve the loss of thousands of jobs in France. While Renault is very keen on its F1 success it was clearly felt that being involved in F1 at the same time as slashing jobs would be too difficult to justify.
The Renault F1 engine project is, therefore, being sold to French precision engineering concern Mecachrome, which will sell the engines to customer teams in F1. The deal is good news for Mecachrome which has been suffering in recent years because of cuts in the French defense business and good news for Renault as it will enable the company to keep hold of the core of engineers from Renault Sport until the main Renault company is in a healthy enough state to justify being back in F1 again, at which point the F1 engine program will be bought back from Mecachrome once again.
This could be achieved before 1999 although the deal which Williams signed with Mecachrome runs until the end of that year, suggesting that Renault might not return until the 2000 season.
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