| By Dieter Rencken | |
| Special Contributor |
There simply is no polite way of saying it. Precisely a year ago "Team Enstone" - as the squad that mutated through various identities since starting life as Toleman became known - was in a total mess. Having been dubbed "Lotus", the operation was on its knees, with bankruptcy said to be a single court case away, and subsequent Companies House filings showing the team to have lost ￡60m in 2015. For months rumours flowed back and forth that Renault was keen to re-acquire the team that delivered the 2005/6 world championships via Fernando Alonso - who followed in tyre tracks left by Michael Schumacher's 1994/5 titles when it was known as Benetton - but only if a hard bargain could be struck with Bernie Ecclestone, CEO of F1's commercial rights holder Formula One Management. Various winding-up petitions were stayed as creditors were promised hope. Yet towards the end of November 2015, Enstone employees - those unable/unwilling to jump ship - faced the very real prospect of a bleak Christmas, particularly when word filtered through the Abu Dhabi paddock that Ecclestone and his boss at CVC Capital Partners, Donald Mackenzie, were playing hardball. Allegedly, Renault chairman Carlos Ghosn was holding out for the same terms and conditions as Mercedes received - double constructors' championship bonuses and a seat on F1's Strategy Group (for what it's worth). FOM, aided and abetted by CVC's majority control over F1, wanted long-term commitment. At the final moment a deal was struck - said to include pledges that Renault would receive similar benefits to those of the Three Pointed Star for similar results after the French Diamond committed to F1 to 2024 (although this may not to be the case - see below). But, whatever the fine print, Renault was back, Oxford Santas welcomed smiling kids, and F1 could brag about 11 teams on the 2016 grid. Renault departed F1 as team owner at the end of 2009 in the wake of the Singapore GP crash scandal from the year before, preferring to concentrate on engine supply - extremely successfully, as it turned out - with its fuel efficient, user-friendly V8s ruling the roost throughout the 2010-13 period - at a time when Mercedes went the other way.
You be the judge who the ultimate winner was, commercially, politically and sporting-wise. The bottom line, though, is that it fell upon the shoulders of Cyril Abiteboul - Renault's 39-year-old long-time faithful, who joined the company after graduating in aeronautics from illustrious French universities and moved to the F1 operation in 2007 - to rebuild a once-proud operation that had degenerated into a financially-strapped outfit unable to even adapt its 2015 car for the coming year. We sit down in Renault's hospitality in Abu Dhabi, a year on from all the intrigue that allegedly culminated in Ron Dennis - ironically now no longer Group CEO of McLaren - telling Ecclestone and Mackenzie to "pay [Renault] the fucking money [they want]" - which they did. So how does the bearded Parisian summarise 2016? "Great at the factory, a bit frustrating at the track," Cyril says, his usual staccato delivery slowing slightly. "A lot of work, a lot of effort, a lot of investment in recovering and restarting the company, and I think we've done that. "It's something that's cost us one season. It cost us a year in terms of performance delivery, in terms of capacity to deliver some marketing, some exposure to Renault. But we knew that from day one.
"Maybe we thought it would not be as bad as that, but if you look at the pace of development in Formula 1, 12 months is not something that you can recover over a 12-month period. So maybe we were a bit naive, but I still believe that [taking over Lotus] was the right starting point and the right choice for the journey that we are only starting." Then, as though to underscore his responsibility for Viry-Chatillon, the team's engine base, he adds: "Great recovery on the engine side, as demonstrated by Red Bull. Huge pride to have a little bit of Renault into this second place in the championship. "A bit more painful at the track, but it's just a sign of how fast Formula 1 is going. Basically Enstone stopped developing the car for more than 12 months, [so] you see what happens..." That is no understatement. The Renault team bagged points thrice in 2016 - twice with Kevin Magnussen (7th and 10th), replaced by Nico Hulkenberg for 2017, and once with Jolyon Palmer (10th) - despite running the same power units as Red Bull (two victories scored), so clearly there is a lot of headroom to make up. How has Renault structured the team, financially and operationally? "Basically I'm responsible, together with Jerome [Stoll, Renault Sport Racing chairman] for the overall motorsport project, which is part of the fixed marketing expenditure of the group. "So we see motorsport as a marketing expenditure, as a marketing arm. Within [the marketing budget] there is a budget that is ring-fenced, preserved, dedicated to motorsport. Within that budget we need to make trade-offs between Formula 1, Formula E, customer racing.
"But let's put it this way: we are responsible for a global motorsport budget and obviously Formula 1 is taking 80%, I don't know exactly which figure, it's something between €100-150million (￡80m-￡120m) at Renault we're spending on motorsport. I don't want to give any specific figure." FOM revenues, sponsorship proceeds such as sister brand Infiniti's contribution and engine-supply income (both Red Bull teams will be supplied in 2017, providing an incremental €40m/￡32m) are on top of Renault's marketing contribution, in turn incentivising the team to go for results and acquire outside funding. This is unlike the ill-fated approach adopted by Toyota, where the parent company provides the full budget, then recovers against the team's income streams. It sure showed in both... "We talked about that, but basically Renault guarantees a contribution, which is obviously based on budget, based on revenues we have, and the ambitions and budgets we need in order to develop performance," Abiteboul adds. "But then we need to go and find the sponsors. If we are short on sponsorship, then it's a burden for the team, it's not a burden for [Renault]." During its nadir, Lotus's Enstone headcount reduced - through cull and attrition - to around 450, clearly not enough to mount a championship-winning challenge given that Mercedes calls on double that (without engine operations). Has Abiteboul managed to redress this situation? "We are +20% on that figure," he says, eventually admitting to around 580 heads. And in Viry? "The count at Viry is a bit complex to work out. To make it simple, we have 450 people on site; we have more or less 200 contractors, and we have 250 people who are on permanent contract. We have a very strange model, which is not a very good model now that we have long-term stability.
"I'm in the process of switching things out a little bit and having more permanent heads, because we have better control. It's also more cost-efficient to have that in-house, and a bit less contractors. But that's not just for Formula 1, because in Viry we are doing Formula 1, we are doing [work] for Formula E, for eDams, and also customer racing activities. So Formula Renault 2.0, RS01..." We eventually settle on 400 F1-dedicated heads in Viry, but Abiteboul is quick to point out that the operation operates mainly on an out-sourcing model. "We don't manufacture, we only do assembly of engines for development purposes. So engines that go to the dyno, not at the track, they are built in-house. There could be some thinking about doing more than that. Personally I'm keen. "I think that it's for the design office to embrace properly what they do as designers, it's good if there is a workshop very close, next door, and they can get to see the parts that are being manufactured, or the engines that are built. For the time being there is no firm decision that is made on that. That's something that we are looking at." How does he react to suggestions that the operation is riddled with political warfare, that battles are being waged on three fronts, namely within Enstone, within Viry and between the two wings? "Two things I will say, is frustration coming from lack of performance. We are all driven by good performance, we are competitors, we are racing people, we have massive pressure coming from everywhere to deliver. So clearly that's creating tension. "But we are together in this tension. And the second comment that I will make is that no team has been capable of finding immediately it's exact structure. So you need to bear with us, you need to sort of leave us alone a little bit.
"We need to get [2016] behind us, and have a look at what has worked and what has not worked, frankly, and we will come up stronger from all of this next year. But there is absolutely no individual conflict between anyone. It's just that we need to ensure that the team is performing, that management is performing at its best. And just like the rest in Formula 1, that's constant improvement." Enough of the past; what does the future for the yellow team? "Now there's a reset of regulations in my opinion it's even better [for the team], because now we have no excuse not to be at the same level as the midfield at the start of the season. But against the top teams it's still going to take some time, and we need to invest in the infrastructure. "I can also say, if I'm honest, that the top teams continue to drift away. So they are developing quicker than we are developing. That's why we need to grow the infrastructure." Given F1's usual mantra of "podiums the first year, wins the second and championships in the third", can Renault at least bag podiums in 2017? "No, not next year," he says. "The target for the podium is 2018. We want to start fighting for the championship in 2020. But I want this to be extremely clear to absolutely everyone: our ambition is be one of the top teams, and I know that some people are speculating that maybe we can't afford Formula 1. "It's not a matter of costs, it's a matter of value. Right now Formula 1 is delivering a certain value, right now the sponsors see a certain value in what we are doing, so we have a certain budget. Is our budget enough to tackle the top teams right now? No. But it's not what we're asking.
"First, before attacking the top teams, I need to be in front of Toro Rosso, to be in front of Force India who's doing better with maybe a 40% less budget. So that's the first step, and with these first steps will come more resources, more value, and that will allow us then to attack the top teams." In closing we examine the FOM deal: Renault's contract is said to be unique in that it runs to 2024... "No comment. In fact with Bernie under Concorde it's 2020. And we've not made a variation to Concorde..." But, contrary to perceived wisdom, there is no Concorde; teams have bilateral agreements with FOM... "Yes, I see what you mean. Correct. So we have a bilateral with Bernie until 2020. We've not made a variation to the standard bilateral agreement that all teams have with Bernie." Where, then, did the story come from that it was a 2024 deal? "If there is anything, it's nothing in relation to Concorde or a bilateral of Concorde." That agreement puts you on the Strategy Group, though, if you finish in the top six? "I think that's true for all teams, though. So right now we're not a member, if we want to be a member, we need to deserve it, so be in the top six." Turning then, to the double championship constructors' bonus: If you win two in a row you qualify, which between now and 2020 is unlikely... "Exactly, that was my point..." Which means you lose out on any incremental revenue benefits... "But it's not a matter of revenue, it's what you do with the revenue." When you receive an extra 100 million it's a lot easier... "That's the beauty of Formula 1."
Q&A: RENAULT AND TOTAL F1's current oil wars were outlined here. How does the situation, which recently includes Red Bull Racing switching from Total to Mobil, affect Renault? We asked Cyril Abiteboul about the subject. How do you replace Total? CA: Why do I need to replace Total? Because they're leaving. CA: Really? Are they? As a commercial partner, yes. As technical partner they are prepared to stay. CA: In the course of 2015, what we've done very carefully is looked at the key success factor of Mercedes before making the decision to come back as a team. One of the key success factors of Mercedes is Petronas. Many people did not realise that at the time, but Petronas have been extremely committed to Formula 1. Financially and technically? CA: Exactly. That's my point. So that's what we need, and we knew that from day one. We needed a partner who's 100% committed to [production cars], to Formula 1, and to the team that they're supporting. I'm completely confident that through a new relationship we will be capable of finding a partner with the same appetite and the same financial resources and the same technical capabilities as Petronas had and continue to have for Mercedes. That won't be Total, because they've gone to football. CA: If Total wants to, I'm sure that they have the capacity, the financial capacity, to do both football and Formula 1 properly. But it's up to them to determine their strategy, and I am not here to comment on what Total is willing to do. It would be for them to make that announcement, I guess in due course. In theory you can go with a non-French brand. CA: I can tell you one thing: We are the largest manufacturer involved in Formula 1. Yes, by volume. CA: By volume. [Renault] Nissan, Mitsubishi, [plus other brands such as Infiniti, Dacia, etc] by far. I have absolutely no doubt that this is attractive to any petroleum brand.
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| By Dieter Rencken | |
| Special Contributor |
There simply is no polite way of saying it. Precisely a year ago "Team Enstone" - as the squad that mutated through various identities since starting life as Toleman became known - was in a total mess. Having been dubbed "Lotus", the operation was on its knees, with bankruptcy said to be a single court case away, and subsequent Companies House filings showing the team to have lost ￡60m in 2015. For months rumours flowed back and forth that Renault was keen to re-acquire the team that delivered the 2005/6 world championships via Fernando Alonso - who followed in tyre tracks left by Michael Schumacher's 1994/5 titles when it was known as Benetton - but only if a hard bargain could be struck with Bernie Ecclestone, CEO of F1's commercial rights holder Formula One Management. Various winding-up petitions were stayed as creditors were promised hope. Yet towards the end of November 2015, Enstone employees - those unable/unwilling to jump ship - faced the very real prospect of a bleak Christmas, particularly when word filtered through the Abu Dhabi paddock that Ecclestone and his boss at CVC Capital Partners, Donald Mackenzie, were playing hardball. Allegedly, Renault chairman Carlos Ghosn was holding out for the same terms and conditions as Mercedes received - double constructors' championship bonuses and a seat on F1's Strategy Group (for what it's worth). FOM, aided and abetted by CVC's majority control over F1, wanted long-term commitment. At the final moment a deal was struck - said to include pledges that Renault would receive similar benefits to those of the Three Pointed Star for similar results after the French Diamond committed to F1 to 2024 (although this may not to be the case - see below). But, whatever the fine print, Renault was back, Oxford Santas welcomed smiling kids, and F1 could brag about 11 teams on the 2016 grid. Renault departed F1 as team owner at the end of 2009 in the wake of the Singapore GP crash scandal from the year before, preferring to concentrate on engine supply - extremely successfully, as it turned out - with its fuel efficient, user-friendly V8s ruling the roost throughout the 2010-13 period - at a time when Mercedes went the other way.
You be the judge who the ultimate winner was, commercially, politically and sporting-wise. The bottom line, though, is that it fell upon the shoulders of Cyril Abiteboul - Renault's 39-year-old long-time faithful, who joined the company after graduating in aeronautics from illustrious French universities and moved to the F1 operation in 2007 - to rebuild a once-proud operation that had degenerated into a financially-strapped outfit unable to even adapt its 2015 car for the coming year. We sit down in Renault's hospitality in Abu Dhabi, a year on from all the intrigue that allegedly culminated in Ron Dennis - ironically now no longer Group CEO of McLaren - telling Ecclestone and Mackenzie to "pay [Renault] the fucking money [they want]" - which they did. So how does the bearded Parisian summarise 2016? "Great at the factory, a bit frustrating at the track," Cyril says, his usual staccato delivery slowing slightly. "A lot of work, a lot of effort, a lot of investment in recovering and restarting the company, and I think we've done that. "It's something that's cost us one season. It cost us a year in terms of performance delivery, in terms of capacity to deliver some marketing, some exposure to Renault. But we knew that from day one.
"Maybe we thought it would not be as bad as that, but if you look at the pace of development in Formula 1, 12 months is not something that you can recover over a 12-month period. So maybe we were a bit naive, but I still believe that [taking over Lotus] was the right starting point and the right choice for the journey that we are only starting." Then, as though to underscore his responsibility for Viry-Chatillon, the team's engine base, he adds: "Great recovery on the engine side, as demonstrated by Red Bull. Huge pride to have a little bit of Renault into this second place in the championship. "A bit more painful at the track, but it's just a sign of how fast Formula 1 is going. Basically Enstone stopped developing the car for more than 12 months, [so] you see what happens..." That is no understatement. The Renault team bagged points thrice in 2016 - twice with Kevin Magnussen (7th and 10th), replaced by Nico Hulkenberg for 2017, and once with Jolyon Palmer (10th) - despite running the same power units as Red Bull (two victories scored), so clearly there is a lot of headroom to make up. How has Renault structured the team, financially and operationally? "Basically I'm responsible, together with Jerome [Stoll, Renault Sport Racing chairman] for the overall motorsport project, which is part of the fixed marketing expenditure of the group. "So we see motorsport as a marketing expenditure, as a marketing arm. Within [the marketing budget] there is a budget that is ring-fenced, preserved, dedicated to motorsport. Within that budget we need to make trade-offs between Formula 1, Formula E, customer racing.
"But let's put it this way: we are responsible for a global motorsport budget and obviously Formula 1 is taking 80%, I don't know exactly which figure, it's something between €100-150million (￡80m-￡120m) at Renault we're spending on motorsport. I don't want to give any specific figure." FOM revenues, sponsorship proceeds such as sister brand Infiniti's contribution and engine-supply income (both Red Bull teams will be supplied in 2017, providing an incremental €40m/￡32m) are on top of Renault's marketing contribution, in turn incentivising the team to go for results and acquire outside funding. This is unlike the ill-fated approach adopted by Toyota, where the parent company provides the full budget, then recovers against the team's income streams. It sure showed in both... "We talked about that, but basically Renault guarantees a contribution, which is obviously based on budget, based on revenues we have, and the ambitions and budgets we need in order to develop performance," Abiteboul adds. "But then we need to go and find the sponsors. If we are short on sponsorship, then it's a burden for the team, it's not a burden for [Renault]." During its nadir, Lotus's Enstone headcount reduced - through cull and attrition - to around 450, clearly not enough to mount a championship-winning challenge given that Mercedes calls on double that (without engine operations). Has Abiteboul managed to redress this situation? "We are +20% on that figure," he says, eventually admitting to around 580 heads. And in Viry? "The count at Viry is a bit complex to work out. To make it simple, we have 450 people on site; we have more or less 200 contractors, and we have 250 people who are on permanent contract. We have a very strange model, which is not a very good model now that we have long-term stability.
"I'm in the process of switching things out a little bit and having more permanent heads, because we have better control. It's also more cost-efficient to have that in-house, and a bit less contractors. But that's not just for Formula 1, because in Viry we are doing Formula 1, we are doing [work] for Formula E, for eDams, and also customer racing activities. So Formula Renault 2.0, RS01..." We eventually settle on 400 F1-dedicated heads in Viry, but Abiteboul is quick to point out that the operation operates mainly on an out-sourcing model. "We don't manufacture, we only do assembly of engines for development purposes. So engines that go to the dyno, not at the track, they are built in-house. There could be some thinking about doing more than that. Personally I'm keen. "I think that it's for the design office to embrace properly what they do as designers, it's good if there is a workshop very close, next door, and they can get to see the parts that are being manufactured, or the engines that are built. For the time being there is no firm decision that is made on that. That's something that we are looking at." How does he react to suggestions that the operation is riddled with political warfare, that battles are being waged on three fronts, namely within Enstone, within Viry and between the two wings? "Two things I will say, is frustration coming from lack of performance. We are all driven by good performance, we are competitors, we are racing people, we have massive pressure coming from everywhere to deliver. So clearly that's creating tension. "But we are together in this tension. And the second comment that I will make is that no team has been capable of finding immediately it's exact structure. So you need to bear with us, you need to sort of leave us alone a little bit.
"We need to get [2016] behind us, and have a look at what has worked and what has not worked, frankly, and we will come up stronger from all of this next year. But there is absolutely no individual conflict between anyone. It's just that we need to ensure that the team is performing, that management is performing at its best. And just like the rest in Formula 1, that's constant improvement." Enough of the past; what does the future for the yellow team? "Now there's a reset of regulations in my opinion it's even better [for the team], because now we have no excuse not to be at the same level as the midfield at the start of the season. But against the top teams it's still going to take some time, and we need to invest in the infrastructure. "I can also say, if I'm honest, that the top teams continue to drift away. So they are developing quicker than we are developing. That's why we need to grow the infrastructure." Given F1's usual mantra of "podiums the first year, wins the second and championships in the third", can Renault at least bag podiums in 2017? "No, not next year," he says. "The target for the podium is 2018. We want to start fighting for the championship in 2020. But I want this to be extremely clear to absolutely everyone: our ambition is be one of the top teams, and I know that some people are speculating that maybe we can't afford Formula 1. "It's not a matter of costs, it's a matter of value. Right now Formula 1 is delivering a certain value, right now the sponsors see a certain value in what we are doing, so we have a certain budget. Is our budget enough to tackle the top teams right now? No. But it's not what we're asking.
"First, before attacking the top teams, I need to be in front of Toro Rosso, to be in front of Force India who's doing better with maybe a 40% less budget. So that's the first step, and with these first steps will come more resources, more value, and that will allow us then to attack the top teams." In closing we examine the FOM deal: Renault's contract is said to be unique in that it runs to 2024... "No comment. In fact with Bernie under Concorde it's 2020. And we've not made a variation to Concorde..." But, contrary to perceived wisdom, there is no Concorde; teams have bilateral agreements with FOM... "Yes, I see what you mean. Correct. So we have a bilateral with Bernie until 2020. We've not made a variation to the standard bilateral agreement that all teams have with Bernie." Where, then, did the story come from that it was a 2024 deal? "If there is anything, it's nothing in relation to Concorde or a bilateral of Concorde." That agreement puts you on the Strategy Group, though, if you finish in the top six? "I think that's true for all teams, though. So right now we're not a member, if we want to be a member, we need to deserve it, so be in the top six." Turning then, to the double championship constructors' bonus: If you win two in a row you qualify, which between now and 2020 is unlikely... "Exactly, that was my point..." Which means you lose out on any incremental revenue benefits... "But it's not a matter of revenue, it's what you do with the revenue." When you receive an extra 100 million it's a lot easier... "That's the beauty of Formula 1."
Q&A: RENAULT AND TOTAL F1's current oil wars were outlined here. How does the situation, which recently includes Red Bull Racing switching from Total to Mobil, affect Renault? We asked Cyril Abiteboul about the subject. How do you replace Total? CA: Why do I need to replace Total? Because they're leaving. CA: Really? Are they? As a commercial partner, yes. As technical partner they are prepared to stay. CA: In the course of 2015, what we've done very carefully is looked at the key success factor of Mercedes before making the decision to come back as a team. One of the key success factors of Mercedes is Petronas. Many people did not realise that at the time, but Petronas have been extremely committed to Formula 1. Financially and technically? CA: Exactly. That's my point. So that's what we need, and we knew that from day one. We needed a partner who's 100% committed to [production cars], to Formula 1, and to the team that they're supporting. I'm completely confident that through a new relationship we will be capable of finding a partner with the same appetite and the same financial resources and the same technical capabilities as Petronas had and continue to have for Mercedes. That won't be Total, because they've gone to football. CA: If Total wants to, I'm sure that they have the capacity, the financial capacity, to do both football and Formula 1 properly. But it's up to them to determine their strategy, and I am not here to comment on what Total is willing to do. It would be for them to make that announcement, I guess in due course. In theory you can go with a non-French brand. CA: I can tell you one thing: We are the largest manufacturer involved in Formula 1. Yes, by volume. CA: By volume. [Renault] Nissan, Mitsubishi, [plus other brands such as Infiniti, Dacia, etc] by far. I have absolutely no doubt that this is attractive to any petroleum brand.
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