FEBRUARY 13, 1995

Larrousse-DAMS - on or off?

Jean-Paul Driot, the boss of the DAMS F3000 team, has announced that he has abandoned his plans to enter Formula 1 racing this year - because he cannot find the sponsorship he needs to run the team at what he considers to be a suitably competitive level. Driot says that he now intends to return to F3000 and run a couple of cars and prepare for an F1 bid in 1996.

The announcement, however, could be a final attempt by Driot to bring the negotiations with Gerard Larrousse and his partners to a head and convince them that they must ally with DAMS, or go out of business.

Certainly, without Driot, there is no hope for Larrousse as the team has no chassis for the season ahead - and no chance to build cars in time. Larrousse's independent British design office - run by Robin Herd - stopped work a 1995 chassis at the end of last year because Gerard Larrousse did not make the necessary funds available.

Larrousse then began talks with Driot, who was building an F1 chassis for DAMS for the 1995 season, but did not have the sponsorship necessary to run his own team. Larrousse wanted DAMS to run its cars on behalf of Larrousse, but DAMS wanted a significant shareholding in the team, and this Larrousse would not agree to. Months of talks have failed to find a way for the two teams to integrate; and with Driot announcing that he has had enough, it seems the only way that Larrousse can continue is if he buys the DAMS cars.

It is unlikely that Driot will agree to the sale because he knows that if Larrousse goes out off business, he will be able to pick up some the sponsorships and cheaply buy up equipment left, which will then be used to help him build a much stronger F1 project for 1996.

But what Driot also wants is Larrousse's F1 entry and the FOCA travel benefits. These amount to about $1.5 million but become worthless if the team is not able to get to the first race.

It is now up to Larrousse and his partners to decide what to do, but selling everything to Driot seems like the only sensible choice to recoup any of their losses.

As long as he continues the build program of the DAMS F1 cars, Driot is in the dominant negotiating position and, if all else fails, he can use those cars for an F1 test program in 1995, prior to entering F1 in 1996. In a few months he may also be better placed to raise money for F1 because, after the French elections in May, the new government is expected to overturn Evin's Law, which bans tobacco and alcohol sponsorships in France. It is also likely to stop all sponsorship to Ligier, which is currently financed by French-nationalized companies Renault, Elf, Gitanes and Loto.

With Ligier foreign-owned and Larrousse out of business, DAMS would be able to clean up the entire French sponsorship market in 1996 and might even be able to convince Peugeot to supply it with engines.