Honda website
Honda website

NOVEMBER 3, 2004

Red Bull and Jaguar - a deal is close?

There are reports in today's Financial Times in London suggesting that Red Bull is in the final stages of negotiations to buy Jaguar Racing. The newspaper, which can often be relied upon, cites sources close to the deal saying that Red Bull and Ford are fighting over the price of the team as Ford faces a huge pay-out if a deal is not struck before November 15, the date on which the team must register for next year's World Championship. If the deal is not done by then the team will have no value except as a potential assets for other teams. Ford is believed to be trying to push up the price by telling red Bull that there is another offer in the pipeline - which is possible. The danger is that brinksmanship will result in no deal being done and the team going out of business although Ford is aware that there is a serious danger of legal actions if that happens. If the team is sold so are the commitments which relate to the Concorde Agreement.

Ford's fear is that the team will be sold and then go out of business which, under US corporate legislation, would make Ford liable for employee and other costs.

The big problem for Red Bull would be to find an engine for next year although Jaguar Racing and Cosworth have been working on 2005 projects and plans can go ahead if the money is available. The big issue however is to find a longer-term solution for engines which would give the team the chance to win races in the medium term. The existing engine manufacturers in F1 might be willing to help out, perhaps even with different branding. Red Bull is most keen to have an association with a US engine manufacturer and while a deal with DaimlerChrysler might be possible, it is more likely that Red Bull would have to settle for a Japanese-American firm such as Acura (Honda), Lexus (Toyota) or Infiniti (Nissan-Renault).