F1: FIA makes standard Cosworth offer

[Rory Phoulorie]

By Jonathan Noble Friday, December 5th 2008, 07:31 GMT

FIA president Max Mosley has moved in the wake of Honda's Formula One exit to lay out the terms for a drastically cheaper engine offer from Cosworth that will help reduce costs in the sport.

On the same day that F1 lost a major manufacturer, Mosley has written to teams explaining his vision for how a deal with the famed Northampton engine supplier can help bring budgets down substantially.

He has revealed that the FIA is now in exclusive talks with Cosworth about a deal for teams from 2010 that could result in an annual engine and transmission cost of less than �6 million.

Mosley says that as long as four teams sign up for a supply of engines from 2010, then the annual charge for a three-year deal will be just �5.49 million - with an upfront fee of �1.68 million. If more teams sign up, then the cost will be reduced further.

In a letter sent to F1 teams on Friday, just a few hours after Honda cited the worldwide financial downturn as forcing it to quit F1, Mosley outlined his plans for a standard engine - and made it clear that manufacturers would not be forced to run them.

The tender process for standard engines ended last month and after evaluating the options, the FIA has opted to press ahead with Cosworth.

Mosley wrote: "We have completed the tendering process and are now in exclusive negotiations with Cosworth together with Xtrac and Ricardo Transmissions (XR) to supply a complete Formula One power train starting in 2010.

"The engine will be a current Formula One engine while the transmission will be state-of-the-art Formula One and a joint effort by two companies which already supply transmissions to most of the grid.

"The cost to each team taking up this option will be an up-front payment of �1.68M (�1.97M) and then �5.49M (�6.42M) per season for each of the three years of the supply contract (2010, 2011, 2012). This price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000 km of testing.

"The annual cost will reduce if more teams take up the option, for example to �4.99M (�5.84M) per team with eight teams. It will further reduce if less than 30,000 km of testing is required. Neither engine nor transmission will be badged."

Although the idea of a standard engine had prompted quit threats from several manufacturers, Mosley has clarified that teams will not be forced to run the power units if they do not want to.

However, he has made it clear that any engine that car makers produce themselves will not be allowed to have better performance than the standard unit.

Teams will have the option of using the standard engine, building the unit themselves or, Mosley explains, "continue to use their existing engine, with the current ban on development and requirement for engine parity still in place (noting that the engine supplied will become the reference engine for output and other performance indicators and no engine will be permitted to exceed those indicators)."

Teams building the engine themselves or using their own power unit will, however, be required to use the XT transmission.

Mosley believes the engine move, allied to other cost cutting measures, will keep the independent teams alive and potentially find new manufacturers if more car makers pull out - which Mosley says 'seems likely.'

Teams have until next Thursday (December 11) to indicate their desire to run the standard engine. Even if fewer than four teams sign up, then the FIA may still proceed with the plans - although with slightly higher cost figures.

A statement on the FIA's website said that the governing body was focused on working with F1 supremo Bernie Ecclestone and the Formula One Teams' Association (FOTA) to secure the sport's future.

"The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's longstanding concern that the cost of competing in the World Championship is unsustainable," said the statement. "In the FIA's view, the global economic downturn has only exacerbated an already critical situation.

"As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA to ensure that Formula One becomes financially sustainable."

Autosport

[Rory Phoulorie]

The letter to the teams from Max Mosley

Friday, December 5th 2008, 08:08 GMT

Further to my letter of 18 November (copy attached for convenience), we have completed the tendering process and are now in exclusive negotiations with Cosworth together with Xtrac and Ricardo Transmissions (XR) to supply a complete Formula One power train starting in 2010. The engine will be a current Formula One engine while the transmission will be state-of-the-art Formula One and a joint effort by two companies which already supply transmissions to most of the grid.

The cost to each team taking up this option will be an up-front payment of �1.68M (�1.97M) and then �5.49M (�6.42M) per season for each of the three years of the supply contract (2010, 2011, 2012). This price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000 km of testing. The annual cost will reduce if more teams take up the option, for example to �4.99M (�5.84M) per team with eight teams. It will further reduce if less than 30,000 km of testing is required. Neither engine nor transmission will be badged.

As suggested in my letter of 18 November, teams participating in the 2010 Championship would then have three options:

- the above;

- the right to build an engine themselves, identical to the above, having been supplied with all the necessary technical information;

- the right to continue to use their existing engine, with the current ban on development and requirement for engine parity still in place (noting that the engine supplied will become the reference engine for output and other performance indicators and no engine will be permitted to exceed those indicators).

Teams opting for one of the latter two options would nevertheless use the XR transmission.

In combination with the programme of cost reductions for the chassis, race weekend and team home base outlined in my letter of 18 November, these arrangements have a number of advantages. These include:

- enabling the independent teams to survive in the current difficult economic climate; facilitating the replacement of a manufacturer team if (as seems likely) we suffer additional losses;

- stabilising Formula One while new road-relevant technologies are introduced together with a state-of-the-art high tech engine, which could be in Formula One as early as 2013 should the car industry by then be in a position to fund its development;

- avoiding any change to the Formula One spectacle and keeping the technology at current levels.

These arrangements are on the basis that at least four teams enter into contracts to use the power train described above, and do so no later than close of business (5pm CET) on Thursday 11 December 2008. In the event of fewer than four teams signing up, the FIA may still proceed but the price on offer will vary. The supply contracts will be with Cosworth but in the first instance teams are requested to make their intentions known to my office.

Yours sincerely,

Max Mosley

Autosport