MAY 25, 1998
Who owns Mecachrome?
THE supply of Mecachrome Formula 1 engines for 1999 and beyond has been thrown into some confusion by the announcement in Monaco that the French precision engineering company has signed an exclusive distribution contract with a company called Super Performance Competition Engineering, which is to be managed by Flavio Briatore.
The contract will begin in 1999 and will see the ex-Renault V10 engines being distributed under the "Supertec Sports" banner. Williams quickly responded to the announcement saying that there is a contract in place for a two-year deal with Mecachrome and it is going to continue using the name "Mecachrome" and will not switch.
Benetton, which calls the engines Playlife V10s at the moment, is in a more difficult situation because in order to change the name of the engine it will have to pay for the privilege.
Teams such as British American Racing and Sauber which are interested in using the engines will also have to pay whatever Super Performance Competition Engineering demands.
One can only presume that Mecachrome and Renault Sport have been paid handsomely for the distribution rights to the engines and have agreed because either they are not interested in doing the deals or do not want to be seen to still be involved. According to the Mecachrome statement Renault Sport is developing the engines for 1999 and 2000.
There is clearly a lot more to the deal than meets the eye with the biggest question being who actually owns SuperĘPerformanceĘCompetition Engineering (SPCE). Briatore and his sidekick Bruno Michel, formerly of Ligier, are it seems, simply managers. Some rumors in the Monaco paddock suggested that SPCE is jointly owned by Ecclestone and Briatore as a means of ensuring that there are enough engines around for all the teams and that Briatore can have a money-making role in F1. This seems unlikely because Ecclestone went to a lot of trouble in September last year to distance himself as much as possible from Briatore when Flavio was leaving the sport. At the time this seemed to be a helping hand out of F1 because Flavio's imaginative ways of doing business did not really fit in with the image Ecclestone was trying to create in the run up to the flotation of F1 Holdings. A second rumor in Monaco hinted that Ecclestone and Briatore have actually bought the whole Mecachrome company. This is ridiculous as Mecachrome is not a small race-engine builder but rather a vast precision engineering company worth around $500m which is involved in many industries, notably aerospace and defense.
Renault's agreement to be involved in this arrangement is very strange but Briatore's influence at Renault Sport is considerable and one can only presume that he has convinced them that it is a good idea. It seems that Renault bosses have the optimistic idea that they might one day return to F1 although this does not seem to take into account the fact that the car company needs to make considerable cutbacks in the next few years if it wishes to survive when the car industry in Europe begins to rationalize. Renault's problem is that the French unions will not let the company close factories and they can hardly be seen to spend money on an F1 program while trying to force through change.
French sources suggest that both Craig Pollock of British American Racing and Sauber Petronas are keen to get any new engines which Renault produces and might be willing to pay to use Renault factory engines - so long as they are badged Renault. The British American Racing budget is a big one but it is hard to imagine that there is money for such a deal. Sauber might be a different story. The team is supposed to be building its own engines in Switzerland but this is not proving to be very practical as attracting staff is very difficult.
Sauber's deal with Ferrari is not a good long-term solution as the Italian team can hardly afford to be beaten by a customer and that means that if Sauber wants to win races a new engine must be found. A supply of Mecachrome engines is expensive and it makes a lot more sense for a team to buy the distribution rights of the engine for less than the engines actually cost. The team could then get itself a cheap engine deal and have customer teams pay.
Investigations into the ownership of SPCE have failed to produce details of ownership beyond a Dutch holding company. Sources in Holland suggest that this may lead to a Liechtenstein holding company. It may be a coincidence but Sauber's FritzĘKaiser is based in Liechtenstein and he told us at Monaco that he was not involved in SPCE but admitted that he knows the people who are.
It is also worth noting that Kaiser has represented Gerhard Berger for 15 years and that his negotiating skills impressed Benetton boss Briatore - the new manager of SPCE.
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