NOVEMBER 29, 1999
Minardi and Daewoo
MINARDI and Daewoo have one thing in common: they are both struggling. And so it is worth ignoring an absurd rumor which did the rounds last week in Italy that the little Italian team is on the verge of concluding a major engine deal with South Korea's Daewoo. The rumor-mongers seem to have missed the fact that the company nearly collapsed under its debt burden in July and a few weeks later the company's creditors announced that they were going to sell off most of the Daewoo subsidiaries in order to concentrate on the core business of producing cars.
This might suggest that a Formula 1 program is a good idea but Daewoo Motor currently has debts of $15bn and assets of only $4.8bn. General Motors has shown some interest in buying the company but is being very careful not to get involved until it is clear what is happening with the rest of the Daewoo Group - which has combined debts of $75bn. In order to keep the car company going, huge cuts are going to be needed and the strong Korean trade unions are not going to let that happen. This means that the increasingly unstable government of Kim Dae-Jung will probably have to keep the business afloat rather than relying on foreign companies to come in and buy the assets.
All in all, it is very unlikely that Daewoo is going to enter Grand Prix racing... and it was no surprise to hear that Minardi has denied the stories, saying that it is in the process of concluding its deal with Supertec. The problem is that Minardi is now more or less at the mercy of Supertec boss Flavio Briatore as it will soon reach the point at which it will be too late for Minardi to build any car other than one with a Supertec-engine. There is a vague possibility of a deal with Tom Walkinshaw but as he is relying on Briatore for his engines in 2000 it is unlikely that the Scotsman is going to do anything to cause trouble.
Briatore has made no secret of the fact that he wants to get a high-profile role in the sport - if only to get on television and to make a bit more money - and with Minardi at his mercy and no hurry to strike a deal, it may be that Briatore will soon be in a position to explain to the Minardi management that there is a choice between selling the team to him - or going out of business...
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