FEBRUARY 9, 2005
Wow, guess what? Ferrari thought about quitting F1!
It has been a long time coming but there is no surprise that Ferrari has let it be known the Italian car company considered leaving the sport before Bernie Ecclestone offered a major league pay-off to get the team to stay in F1. Our sources say that Ferrari 's deal is worth $150m in addition to the annual share of the pickings.
"We are a small company and we have to cover the costs of Formula 1," Ferrari's Jean Todt told The Times, Bernie Ecclestone's preferred newspaper when it comes to leaks. "We discussed very often leaving Formula 1 because it was costing too much money. Ferrari could have been in a position to stop being in Formula 1. Yes, that is sure. The trend of the evolution of rising costs without extra revenues put the question on the agenda. At the end of the day, we have to act in the interests of Ferrari. We needed to agree the future for the sake of security. We couldn't just go off blind in a new direction and it was up to us to secure the future of Ferrari inside Formula 1."
The other car manufacturers in Formula 1 will, no doubt, see the message as a warning that, if they torpedo the deal which Ferrari has done with Formula One Management for 2008-2012, Ferrari could pull out of the sport. The news will not come as a surprise to them and many among them have reached the conclusion that Ferrari can do as it pleases because its isolationist attitudes and its refusal to accept any proposals other than its own have driven the team to a position where few in the sport care what happens. They argue that Formula 1 has survived the loss of many great names such as Alfa Romeo, Lotus, Matra and Maserati and has survived without them. They believe that Ferrari is not bigger than the sport.
For a long time Ferrari has had a perceived power in the sport and it has exploited this to its own advantages on many occasions, not least in the 1980s when the FIA was pushing for a new formula for normally-aspirated engines. Enzo Ferrari threatened to leave F1 and go Indycar racing and even went as far as to build an Indycar at Maranello.
The irony of the current situation is that Ferrari is blocking cost-cutting measures but at the same time it is the F1 team that needs to cut costs more than most of the others because it cannot make F1 cost-effective. The company does not build enough cars and does not want to increase the production for fear of reducing the perceived exclusivity of a Ferrari. This led the firm to acquire the Maserati brand in order to build up an alternative source of revenue with cheaper cars which can be sold in larger numbers. The aim was to double Ferrari's revenues. This makes it much more logical to use the Maserati brand in F1 although with plans for only around 10,000 cars a year the F1 programme would still not make financial sense, as Jaguar Cars recently found out the hard way.
The other option would be for Ferrari to play double or quits and take over another firm, perhaps Fiat's ailing Lancia brand, and build up a bigger volume of business which would then justify F1 spending. Simply pulling out of F1 will not really aid Ferrari's cause because although the firm will live off its F1 reputation for many years to come, it will lose much of the gloss that comes from continued F1 success.
Or to put it another way, Ferrari is stuck between a rock and a hard place.
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