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McLaren's finances [split]


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#1 Withnail

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Posted 17 March 2013 - 23:47

I'd definitely say that the 2009 -24 was the worst McLaren I've seen in my 20+ years of F1 following. Lewis and Heikki were busting a gut to get that thing into 15th/16th places in qualifying at times. At other times the car's deficiencies were masked by the progress McLaren and Mercedes had made with their KERS (at places like Bahrain where Lewis did well). It took until mid-season to get any sort of competitive package together, and even then Heikki struggled to get as much out of it as Lewis did.


The next few weeks are going to be absolutely critical for the future of McLaren.

There's a lot of talk about McLaren being a top team with great resources and being great at development, and that they'll bounce back for sure - and I hope they do. I really really hope they do.

But I keep being reminded about Williams around 15 years ago. They were one of the top teams in F1, up to and including 1997 coming off the back of 5 world championships in 6 seasons. But over a short period of time, they lost their lead driver, key members of their technical team, their title sponsor and their engine supplier. And despite all their experience and resources, they dropped to being a midfield team and have never recovered. The exact same thing could be happening to McLaren right now.

2013 is so critical for McLaren, because:

a) They need to be successful to attract a new title sponsor at the same level as Vodafone
b) They need to be successful to ensure that Honda will want to partner with them (if this deal hasn't already been done)
c) they can't afford to spend too much time developing their 2013 car, because they need to put a lot of resources into their 2014 car.

Reasons (a) and (b) mean that writing off 2013 to concentrate on 2014 simply isn't an option, but at the same time, if they don't get the 28 sorted pretty soon, it'll have really damaging long term effects for the team in terms of sponsors and engines.

So easy to say in hindsight, but in the last season before major rule changes, surely an evolution of their very competitve car of the previous season would be the right way to go - even if it ends up the year not being the quickest car, due to lack of development potential, they'd have picked up plenty of points in the early part of the year, and would have freed up a lot of resources to concentrate on 2014.

However. it is what it is. The positives are that the car seems reliable, pit stops have been excellent, and the drivers seem to be making the best of it, and not making mistakes. 3 different teams on the podium in Australia helps to limit the damage in terms of the WCC if they can get the car sorted pretty soon.

Edited by Withnail, 17 March 2013 - 23:48.


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#2 DanardiF1

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Posted 18 March 2013 - 00:33

I don't believe McLaren are necessarily on the cusp of a 'Williams moment', purely because they are financially sound even when you factor out external sponsorship. Ron Dennis has diversified McLaren in a way that has generated new revenue streams that aid the team. In a sense he's built the closest thing to the Ferrari model anyone in motorsport has attempted.

The road car business alone is on the cusp of breaking through into the kind of revenue Ferrari generate worldwide. Their MP4-12C has proved popular in hardtop and Spyder versions, and the upcoming P1 is billed as the fastest supercar in the world round a track, using energy recovery systems and advanced aero born in F1.

McLaren Electronics provide ECU's to F1, NASCAR, IndyCar and others around the world. McLaren is big business and perhaps that's their problem right now. The corporate attitude is great for building a secure long-term business, but in a short-term competitive environment like F1 (short term in that it works in year-long cycles rather than 5 year+ business plans etc.) they have to understand that investment is key. McLaren seem to let a lot of top staff go with little internal regret, but they don't wish to spend significant sums on poaching established talent from elsewhere. They haven't done that basically since they brought Newey back in 1996. His design team was hand picked over those years, but almost all have since left (some like Newey and Prodomou are working together at another team!).

Perhaps the culture of the team is too corporate, too intent on promotion-from-within, too reliant on the belief that the 'McLaren way' is the best, when results on track (the true test of success regardless of financial strength) are disappointing and suggest McLaren as an entity are performing to less than the sum of their parts. Teams like Red Bull and Ferrari understand that you have to pay to get the best, and that proven talent is needed for performance and for training new staff underneath them. This is well within McLaren's reach but they willfully eschew this approach. I think it's time they reconsidered.

Williams declined because as solely a racing team they were reliant on sponsor money to pay for their driving talent, top designers, free engines from a top supplier and everything else. They made the most of that model and era of F1 (in fact, Sir Frank pioneered a lot of sponsor-grabbing techniques starting with his Saudia deal in the late 70's), and because they were unable to add new revenue streams into their business fell behind as the external sponsors receded. McLaren has future-proofed themselves against this, and their problems lie in the human element of their team.

#3 Watkins74

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Posted 18 March 2013 - 00:37

(snip)
The road car business alone is on the cusp of breaking through into the kind of revenue Ferrari generate worldwide. (/snip)

What? You have any kind of revenue numbers to back that statement up.

Edited by Watkins74, 18 March 2013 - 00:38.


#4 DanardiF1

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Posted 18 March 2013 - 00:46

What? You have any kind of revenue numbers to back that statement up.


Ok that might be a bit of an exaggeration given Ferrari's global position, but the Automotive side is certainly gaining exposure and selling good numbers of cars.

McLaren group made a £19.7m profit in 2011, with turnover of £239m, and that was despite having to buy back the 40% of the company Mercedes previously owned.

Link

In contrast Ferrari's revenues were 1.2bn Euros, but with 'only' an 80m profit.

Edited by DanardiF1, 18 March 2013 - 00:50.


#5 akshay380

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Posted 18 March 2013 - 01:24

I don't believe McLaren are necessarily on the cusp of a 'Williams moment', purely because they are financially sound even when you factor out external sponsorship. Ron Dennis has diversified McLaren in a way that has generated new revenue streams that aid the team. In a sense he's built the closest thing to the Ferrari model anyone in motorsport has attempted.

The road car business alone is on the cusp of breaking through into the kind of revenue Ferrari generate worldwide. Their MP4-12C has proved popular in hardtop and Spyder versions, and the upcoming P1 is billed as the fastest supercar in the world round a track, using energy recovery systems and advanced aero born in F1.

McLaren Electronics provide ECU's to F1, NASCAR, IndyCar and others around the world. McLaren is big business and perhaps that's their problem right now. The corporate attitude is great for building a secure long-term business, but in a short-term competitive environment like F1 (short term in that it works in year-long cycles rather than 5 year+ business plans etc.) they have to understand that investment is key. McLaren seem to let a lot of top staff go with little internal regret, but they don't wish to spend significant sums on poaching established talent from elsewhere. They haven't done that basically since they brought Newey back in 1996. His design team was hand picked over those years, but almost all have since left (some like Newey and Prodomou are working together at another team!).

Perhaps the culture of the team is too corporate, too intent on promotion-from-within, too reliant on the belief that the 'McLaren way' is the best, when results on track (the true test of success regardless of financial strength) are disappointing and suggest McLaren as an entity are performing to less than the sum of their parts. Teams like Red Bull and Ferrari understand that you have to pay to get the best, and that proven talent is needed for performance and for training new staff underneath them. This is well within McLaren's reach but they willfully eschew this approach. I think it's time they reconsidered.

Williams declined because as solely a racing team they were reliant on sponsor money to pay for their driving talent, top designers, free engines from a top supplier and everything else. They made the most of that model and era of F1 (in fact, Sir Frank pioneered a lot of sponsor-grabbing techniques starting with his Saudia deal in the late 70's), and because they were unable to add new revenue streams into their business fell behind as the external sponsors receded. McLaren has future-proofed themselves against this, and their problems lie in the human element of their team.

:up:

#6 ElDictatore

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Posted 18 March 2013 - 01:40

That Whitmarsh already gave a date and that the new sponsor will be a 'surprise' suggests that they already have a new sponsor contracted for 2014 onwards. My opinion.



#7 CookinFlatSix

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Posted 18 March 2013 - 01:50

The profit the group made of 19mill was hugely as a result of selling the second factory at the MTC to the road car division. The group then paid out a dividend to its shareholders of about 20 mill.

Why do so may make sweeping assumptions without having a cklue about how business works?

McLaren have rich shareholders so all will be well? Shareholders are looking for a return on their existing investment. If Ron raise more money by selling shares he risks losing controllin interest at some point.

McLaren have their fingers in other pies and so are unlike Williams? Those other pies like supplying Ecus and other engineering projects are minuscule in comparison to the annual funding required by the F1 team. Williams also had and have other projects.

The group will have no problem finding sponnsors and backers? The F1 team as a standalone business selling space on its cars to sponsors is hardly a viable and sustenable business model anymore, ask all the other independent garagistas who have disappeared. Sponsors like Vodaphone paying 50 mill for having their name flown around the world to 20 races are thin on the ground and there is now a lot of competition for those global companies who still derive benefit. Now more than ever McLaren needs to show that its cars will be at the front and on camera more than ever.

McLaren F1 has had to cut costs unlike the teams bankrolled by car manufacturers or fizzy drinks companies. It is exactly in the same position as Williams was, either spend to be at the top, or cut costs and let top staff go and try and balance the books with pay drivers and sideline businesses

The car company is Rons attempt to go the Ferrari route but so far the 458 has stiffled the sales of the 12C, and the P1 is facing the LaFerrari at the 800k space. If somehow sales and then production can be ramped up then the car company can pump in money towards the F1 teams budget in leu of advertising.

Williams floated on the stock exchange and had a seriously rocky ride skirting with complete disaster and folding when the price collapsed. It has turned around in part due to Parr and Wolffe and other arrangements leading to confidence returning in the firm.
Floating right now is not an option for Mclaren, even CVC are no longer in a hurry to float F1 iteself.

So McLaren faces exactly the same situation that Williams did, there is a reason that there are no more 'garagista' type operations in F1, bar Sauber who cannot wait to sell to someone either. Force India?

The F1 team is no cash cow, more like a cash drain. Ron should have sold to Mercedes but he didnt want to give up controlling interest

#8 yoyogetfunky

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Posted 18 March 2013 - 02:17

The profit the group made of 19mill was hugely as a result of selling the second factory at the MTC to the road car division. The group then paid out a dividend to its shareholders of about 20 mill.

Why do so may make sweeping assumptions without having a cklue about how business works?

McLaren have rich shareholders so all will be well? Shareholders are looking for a return on their existing investment. If Ron raise more money by selling shares he risks losing controllin interest at some point.

McLaren have their fingers in other pies and so are unlike Williams? Those other pies like supplying Ecus and other engineering projects are minuscule in comparison to the annual funding required by the F1 team. Williams also had and have other projects.

The group will have no problem finding sponnsors and backers? The F1 team as a standalone business selling space on its cars to sponsors is hardly a viable and sustenable business model anymore, ask all the other independent garagistas who have disappeared. Sponsors like Vodaphone paying 50 mill for having their name flown around the world to 20 races are thin on the ground and there is now a lot of competition for those global companies who still derive benefit. Now more than ever McLaren needs to show that its cars will be at the front and on camera more than ever.

McLaren F1 has had to cut costs unlike the teams bankrolled by car manufacturers or fizzy drinks companies. It is exactly in the same position as Williams was, either spend to be at the top, or cut costs and let top staff go and try and balance the books with pay drivers and sideline businesses

The car company is Rons attempt to go the Ferrari route but so far the 458 has stiffled the sales of the 12C, and the P1 is facing the LaFerrari at the 800k space. If somehow sales and then production can be ramped up then the car company can pump in money towards the F1 teams budget in leu of advertising.

Williams floated on the stock exchange and had a seriously rocky ride skirting with complete disaster and folding when the price collapsed. It has turned around in part due to Parr and Wolffe and other arrangements leading to confidence returning in the firm.
Floating right now is not an option for Mclaren, even CVC are no longer in a hurry to float F1 iteself.

So McLaren faces exactly the same situation that Williams did, there is a reason that there are no more 'garagista' type operations in F1, bar Sauber who cannot wait to sell to someone either. Force India?

The F1 team is no cash cow, more like a cash drain. Ron should have sold to Mercedes but he didnt want to give up controlling interest


Very interesting and you make some good points. However maybe Dennis' aim is a bit more long term and he wants to have a say in the F1 team to make sure its succesful, wich reflects on his road car business (this was his plan iirc). McLaren themselves were bankrolled too for a long time by Mercedes, paid out a 100 million dollar fine without blinking and only a year later invested 250 million pounds into a road car factory. Seems to me McLaren is doing very well monetary wise.

Not sure if this is the right thread to discuss this though :)

Edited by yoyogetfunky, 18 March 2013 - 02:18.


#9 CookinFlatSix

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Posted 18 March 2013 - 03:13

The top teams are spending in excess of 250 mill a year on their F1 operations. That money has to come from somewhere year in year out to remain competitive unless a workable spending cap finally materialises. The RBR, Ferraris dont want a cap. Williams did, McLaren need it also. This has been a big factor in the fun and games going on over the last few years. Various things have been touted, from standardised engines from one manufacturer to RRA. Smaller teams like HRT came in on the hope that costs could be fixed at about 50mill per team. This still hasnt happened.
So McLaren right now will have to replace the Vodaphone money and find a way to avoid paying 20 mill a year for engines just to stand still. McLaren group does not generate enough cash to be able to keep pumping in 100s of millions each year to suplement any shortfall.
Rons incredible bravery with the road car division will work if it starts generating the cash needed to pump into the F1 team in leu of advertising, similar to Ferrari who dont spend a penny on advertising. Ron needs the F1 team to lend credibility to the road car and so needs to retain control.
Mercedes bankrolled the team all this time, Ron got a whopping deal out of them, but they wanted control and you cant blame them as they also have 200k sportscars to sell.
Ron refused to sell the controlling share to them, started his own competing sportscar company and raised money by selling shares to some Arabs. Now Merc have what they want a controlling shareholding in their own F1 team (51% is all thats needed) with the team co owned by 'garagistas' who know the sport. And Ron still has control of his own team and a road car company that needs to increase production to start generating the cash required.
Money for the road car division came from investors who will be more interested in seeing returns than pumping money into the F1 side (Group including the sideline businesses)

This is exactly the same situation that has faced Williams and others, there is no point saying McLaren has the road car business or that the group has other businesses, unless these things are going to pump in 100s of millions then McLaren are back to requiring to hook up big spending sponsors + a free engine deal similar to that with Merc(Honda?) and quick.

Even Whitmarsh has pointed out that all the teams are suffering because the sponsors paying big money like the tobbaco giants in the past are much fewer now and everyone is after a dwindling pool of global companies able to strike these deals. Vodaphone need to be replaced, there is no reason to think they have been despite the team telling us they will announce a new deal at Christmas, that just means they have till Christmas to find one.

And then some cheerfully declare Carlos Slim will save the day, and at the same time they fail to see that this will be in the form of pay drivers and some sponsorship.

Which is exactly what Williams can tell us about.

#10 Ferrari2183

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Posted 18 March 2013 - 07:20

Ok that might be a bit of an exaggeration given Ferrari's global position, but the Automotive side is certainly gaining exposure and selling good numbers of cars.

McLaren group made a £19.7m profit in 2011, with turnover of £239m, and that was despite having to buy back the 40% of the company Mercedes previously owned.

Link

In contrast Ferrari's revenues were 1.2bn Euros, but with 'only' an 80m profit.

Buying back the share is of a capital nature and thus has no bearing on the profit.

#11 chrcol

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Posted 18 March 2013 - 07:57

I agree with CookinFlatSix by the way, I think mclaren have been struggling financially since merc parted ways.

Is perez been paid a wage, has he brought sponsorship?

#12 CookinFlatSix

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Posted 18 March 2013 - 12:10

Perez is on a wage, much much lower than Lewis'. even though the Telmex sponsorship has not followed him from Sauber its possible that going forward his wage might be paid by Telmex or another Carlos Slim brand in return for space on the car.
If that happens then it wont be long before there are 2 Mexican drivers at Mclaren


#13 peroa

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Posted 18 March 2013 - 12:17

Perez misses the Telmex logo on his car.
http://www.motorspor...as-traurig.html

#14 David1976

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Posted 18 March 2013 - 12:45

The road car business alone is on the cusp of breaking through into the kind of revenue Ferrari generate worldwide. Their MP4-12C has proved popular in hardtop and Spyder versions, and the upcoming P1 is billed as the fastest supercar in the world round a track, using energy recovery systems and advanced aero born in F1.


I read in Autocar this week that McLaren's road car division is only just going to creep into profit for the first time over the coming year. Certainly not enough to divert any to F1. The P1, as excellent as it will be, will likely be trumped by LaFerrari and the 458 has trounced MP4-12C sales. McLaren have no other cars in the pipeline for a few years.

Ferrari generate significantly more revenue worldwide through coverage, brand recognition and heritage as a car manufacturer. Something that could take years to create with McLaren road cars.



#15 JRizzle86

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Posted 18 March 2013 - 13:16

I read in Autocar this week that McLaren's road car division is only just going to creep into profit for the first time over the coming year. Certainly not enough to divert any to F1. The P1, as excellent as it will be, will likely be trumped by LaFerrari and the 458 has trounced MP4-12C sales. McLaren have no other cars in the pipeline for a few years.

Ferrari generate significantly more revenue worldwide through coverage, brand recognition and heritage as a car manufacturer. Something that could take years to create with McLaren road cars.


Firstly the reason they will reach profit margins next year is because they just spent a large amount of capital on a brand spanking new production facility. It is called investment.

Secondly the automotive and race car operations are separate business entities. The F1 operation runs off sponsors and constructors points money. The automotive side is designed to be self sufficient on road car sales and outside investors.

Thirdly there is absolutely no reason the P1 will be trounced by the LaFerrari other than in your own mind.

Fourthly The 458 was and MP4-12C are more closely matched than pretty much any other car on sale today. The sales of the 12C meet McLaren's expectation for their first car. The P1 is already sold out.

Fifthly McLaren have a Porsche 911 rival in the pipeline to follow the P1.

To be honest i'll let you have your last point.

:cat:




#16 yoyogetfunky

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Posted 18 March 2013 - 13:27

I read in Autocar this week that McLaren's road car division is only just going to creep into profit for the first time over the coming year. Certainly not enough to divert any to F1. The P1, as excellent as it will be, will likely be trumped by LaFerrari and the 458 has trounced MP4-12C sales. McLaren have no other cars in the pipeline for a few years.

Ferrari generate significantly more revenue worldwide through coverage, brand recognition and heritage as a car manufacturer. Something that could take years to create with McLaren road cars.


The P1 and LaFerrari are not the cars that make money. They only cost money to get bragging rights. I agree McLaren has a long way to go before theyll be mentioned as a true comparable manufacturer like Ferrari, even if their cars are comparable in performance.

For me it is clear that one of the reasons McLaren wasnt sold to Mercedes, is to get that heritage and brand recognition, rather than being the toy of a big manufacturer like Mercedes and risk becoming the laughing stock of F1, or, worse, see it be real competitive and use it to sell more Mercedes road cars. :)

Im sure the McLaren shareholders have a long term plan for their investment, and McLaren F1 wil be allowed to operate at a loss for a number of years if necessary. Its not like the Bahrain royal family needs the cash right away.
That said, McLaren F1 is a strong enough name to attract big sponsors. I have no doubt whatsoever about that.

Edited by yoyogetfunky, 18 March 2013 - 13:29.


#17 CookinFlatSix

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Posted 18 March 2013 - 13:29

Secondly the automotive and race car operations are separate business entities. The F1 operation runs off sponsors and constructors points money. The automotive side is designed to be self sufficient on road car sales and outside investors.


I think whats been said here is that the F1 is facing a huge shortfall in sponsorship funds and constructors points going forward. The separate car business with its own investors on board can be expected to supply lots of cash by acting like Ferrari and giving the F1 team big funds in return for advertising/marketing/publicity/PR/intangible associative benefits etc etc

Thats how the top teams have been able to keep spending in excess of hat an independent garagista relying on sponsors and constructors points money

The Williams have either gone or tried to survive by ways mentioned already in this thread. And this is what McLaren faces up to until the car business can pump in the cash or another car manufacturer buys in. But Ron just got a bunch of Arab investors to help him buy out Merc so slippery slope for McLaren if they spend this season away from the front 2 rows

#18 CookinFlatSix

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Posted 18 March 2013 - 13:42

Im sure the McLaren shareholders have a long term plan for their investment, and McLaren F1 wil be allowed to operate at a loss for a number of years if necessary. Its not like the Bahrain royal family needs the cash right away.
That said, McLaren F1 is a strong enough name to attract big sponsors. I have no doubt whatsoever about that.


Thats not exactly how business works. You are suggesting that the Bharain royal family pump in up to 100 million each year indefinitely? They might not need their original investment back anytime soon, however the F1 business needs an extra 70mill a year to just stand still from last year (Vodaphone+merc engine) The team were already having to slash costs before this and trying to hold on to sponsors.
Finding new ones in this competitive environment is harder than ever and they are more demanding. The Mclaren name means nothing in sales to a global firm, having its name on the front 2 rows, with cameras following its brand to 20 races across the world is what they pay for. Not an association with a romantic name from the past.

For Genii, renaming their team Lotus might leverage on the past but nowadays you are competing for the same sponsors with names like Ferrari, Mercedes, Lotus, No sponsor is going to choose mclaren if they are nor delivering more coverage just because they are McLarne if they could have the other 3.

Infact McLaren are right now more concerned with keeping Santandar. Big Global brands splashing sponsorship around completely dissapeared recently and only a few have trickled back - emirates to F1, Monster to Merc etc. Thats who McLaren are up against in the real world of business

#19 yoyogetfunky

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Posted 18 March 2013 - 14:02

Thats not exactly how business works. You are suggesting that the Bharain royal family pump in up to 100 million each year indefinitely? They might not need their original investment back anytime soon, however the F1 business needs an extra 70mill a year to just stand still from last year (Vodaphone+merc engine) The team were already having to slash costs before this and trying to hold on to sponsors.
Finding new ones in this competitive environment is harder than ever and they are more demanding. The Mclaren name means nothing in sales to a global firm, having its name on the front 2 rows, with cameras following its brand to 20 races across the world is what they pay for. Not an association with a romantic name from the past.

For Genii, renaming their team Lotus might leverage on the past but nowadays you are competing for the same sponsors with names like Ferrari, Mercedes, Lotus, No sponsor is going to choose mclaren if they are nor delivering more coverage just because they are McLarne if they could have the other 3.

Infact McLaren are right now more concerned with keeping Santandar. Big Global brands splashing sponsorship around completely dissapeared recently and only a few have trickled back - emirates to F1, Monster to Merc etc. Thats who McLaren are up against in the real world of business


I never said indefinitly, but they invested in the McLaren group, not the F1 team, right? They have seen the plans for the road car division, and know such things take time to make a decent return. Id say they have a 10 year plan or even more to see some money back.

Besides, I think the investment company of the Bahrainsi didnt really invest in McLaren to get a profit, they did that to get a name in the west and acces to even bigger names and companies via Bernie and other F1 related people. This is one of the reasons they invest 70 million a year in hosting a Grand Prix that draws no spectators whatsoever. The only return they get from that, is PR. Investing in McLaren makes sure F1 (FOTA) and other related people stay favoritive of a GP there, despite all the human rights issues and bad press. In short, the Bahrainis arent your average corporate investors that would need to see profit within a few years at McLaren, and in fact will contribute to any shortcomings the current McLaren f1 team will have. One example is their approval on offering Hamilton a salary more than he earns now at Mercedes.

McLaren is also one of the biggest names in F1, not just relic from romantic past. They are highly succesful, win every year or run cars at the front - and thus in cameras spotlight. They usually employ big name drivers, currently the 2009 WDC and a very media savy guy in Button, so plenty of exposure. They might have trouble getting a new sponsor to put in the money Vodafone did, but on the other hand already they have some real financial muscle like GSK inside. McLaren will do fine, im sure of that.



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#20 CookinFlatSix

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Posted 18 March 2013 - 14:37

Well said, but still the point remains that this is exactly where Wiiliams were before, they had no less illustrious name or heritage than McLaren at the time they lost top drivers, engineers, engines and sponsor

If Ron were fully hands on I would feel a lot more confident as he has form for signing whopping deals and steering the ship where other independents have failed

Main thing is the stable engine works deal, then hooking a title sponsor, and then top 2 in WCC for the money. Even then it will still be hard to spend at the level of Ferrari, RBR or Merc. It's a trade off between cutting costs and moving down grid or spend what you don't have in the hope of staying at the front

That's the state of current F1 business, RBR making it work by over spending and coming first, the other top teams bankrolled by rich manufacturer, everyone else struggling

There are no certainties for McLaren in next 2 years as it stands

#21 yoyogetfunky

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Posted 18 March 2013 - 14:39

Another plus for the Bahraini's investment in McLaren, is that they are now responsible for 2000+ and counting, jobs in the UK economy. That goes so well with the UK government that the holy grail - what every self respecting middle east oil state wants - is within sights for Bahrain: nice western, sophisticated UK arms. And for all that bonding with British firms like McLaren, the UK office declined to name Bahrain in a human rights violation report, and silently the Foreign Office signed a weapons trade with Bahrain late 2012.

http://www.guardian....ms-human-rights

No, McLaren will keep Bahrainy shareholders for quite a while, no matter what happens, is my guess. :)

#22 Alfisti

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Posted 18 March 2013 - 14:47

If they don't get on top of this budget business i do fear that when RBR pull out we will see Ferrari slaughter everyone as mcLaren are going to struggle to keep up IMHO. mercedes could in effect replace them i guess.

#23 yoyogetfunky

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Posted 18 March 2013 - 14:47

Well said, but still the point remains that this is exactly where Wiiliams were before, they had no less illustrious name or heritage than McLaren at the time they lost top drivers, engineers, engines and sponsor

If Ron were fully hands on I would feel a lot more confident as he has form for signing whopping deals and steering the ship where other independents have failed

Main thing is the stable engine works deal, then hooking a title sponsor, and then top 2 in WCC for the money. Even then it will still be hard to spend at the level of Ferrari, RBR or Merc. It's a trade off between cutting costs and moving down grid or spend what you don't have in the hope of staying at the front

That's the state of current F1 business, RBR making it work by over spending and coming first, the other top teams bankrolled by rich manufacturer, everyone else struggling

There are no certainties for McLaren in next 2 years as it stands


But Williams doesnt have a 500m pound (probably more by now) MTC + now a new road factory. That is money in the bank for the shareholders. The value is much more than Williams. Another point: in the Mercedes years McLaren F1 was always in the negative. In fact the only profitable F1 team for many years,was Ferrari. Mind you, for tax reasons its sometimes better t not make a lot of profit. Still Ron Dennis gets a CEO salary thatll make your (and mine) head spin.

Edited by yoyogetfunky, 18 March 2013 - 14:49.


#24 CookinFlatSix

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Posted 18 March 2013 - 14:54

Another plus for the Bahraini's investment in McLaren, is that they are now responsible for 2000+ and counting, jobs in the UK economy. That goes so well with the UK government that the holy grail - what every self respecting middle east oil state wants - is within sights for Bahrain: nice western, sophisticated UK arms. And for all that bonding with British firms like McLaren, the UK office declined to name Bahrain in a human rights violation report, and silently the Foreign Office signed a weapons trade with Bahrain late 2012.

http://www.guardian....ms-human-rights

No, McLaren will keep Bahrainy shareholders for quite a while, no matter what happens, is my guess. :)


No ones saying McLaren won't keep their shareholders, if they have to keep pumping money in they will get more shares and Ron risks losing control at some point. They are not going to give the firm 100 mill each year for nothing
Ofcourse Ron could keep diluting them just like happened to Al Waled with his Eurodisney shares where they kept tapping him for money and kept diluting his shareholding and he took it because apparently he wanted the prestige etc

Anyway you heard of the Arab Spring? You know they let women in politics in Saudi? How long you think Bshrain will keep its F1 or keep flushing 100 mill a year on McLaren while the people ask for more rights?

#25 yoyogetfunky

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Posted 18 March 2013 - 15:06

No ones saying McLaren won't keep their shareholders, if they have to keep pumping money in they will get more shares and Ron risks losing control at some point. They are not going to give the firm 100 mill each year for nothing
Ofcourse Ron could keep diluting them just like happened to Al Waled with his Eurodisney shares where they kept tapping him for money and kept diluting his shareholding and he took it because apparently he wanted the prestige etc

Anyway you heard of the Arab Spring? You know they let women in politics in Saudi? How long you think Bshrain will keep its F1 or keep flushing 100 mill a year on McLaren while the people ask for more rights?


100 mill is a lot of money, but since they spend that amount on a GP each year without ANY return, I think theyll be prepared to give McLaren similar injections. They kiss Dennis shoes for being allowed in as McLaren shareholders anyway.

Bahrain money is from the royals. Even if they lose power, they wont lose the money.

#26 yoyogetfunky

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Posted 18 March 2013 - 15:16

No ones saying McLaren won't keep their shareholders, if they have to keep pumping money in they will get more shares and Ron risks losing control at some point. They are not going to give the firm 100 mill each year for nothing
Ofcourse Ron could keep diluting them just like happened to Al Waled with his Eurodisney shares where they kept tapping him for money and kept diluting his shareholding and he took it because apparently he wanted the prestige etc

Anyway you heard of the Arab Spring? You know they let women in politics in Saudi? How long you think Bshrain will keep its F1 or keep flushing 100 mill a year on McLaren while the people ask for more rights?


Oh, and we forget the departure of mr Hamilton saves the company what, 15 million a year? And mr Slim probably pays a nice figure for mr Perez. So thats 20 million less on the budget annually. Thats 20million profit already for 2013! Now they only need to find present a new nice sponsor for, say 45 million a year, and Mclaren budget is only short the Merc engine fee for 2014. Peanuts.;)

Edited by yoyogetfunky, 18 March 2013 - 15:18.


#27 CookinFlatSix

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Posted 18 March 2013 - 15:16

100 mill is a lot of money, but since they spend that amount on a GP each year without ANY return, I think theyll be prepared to give McLaren similar injections. They kiss Dennis shoes for being allowed in as McLaren shareholders anyway.

Bahrain money is from the royals. Even if they lose power, they wont lose the money.

I hear you but the whole idea of a revolution is to grab the cash. When royal families are deposed by the masses they don't normally get flown on holiday with all their money following in a seperate plane


#28 yoyogetfunky

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Posted 18 March 2013 - 15:23

I hear you but the whole idea of a revolution is to grab the cash. When royal families are deposed by the masses they don't normally get flown on holiday with all their money following in a seperate plane


Being homeport of us navy 5th(?) fleet, and neighbour Saudi Arabia the chances of that happening are slim to none existant imo my friend. i dont see it happening. Besides the royals are transfering some power already, giving in to public demand. Its still fishy as hell, but evenso.

#29 Dolph

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Posted 18 March 2013 - 15:51

McLaren group made a £19.7m profit in 2011, with turnover of £239m, and that was despite having to buy back the 40% of the company Mercedes previously owned.


Are you saying there was goodwill amortisation in 2011?

Edited by Dolph, 18 March 2013 - 15:53.


#30 H2H

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Posted 18 March 2013 - 17:20


F1 is a very difficult business and compared to other ones you are performing on quicksand. Even a brilliant management and with great staff has to work incredibly hard to stay afloat. The fundamentals in other business sectors are just vastly better and allow for much better economics for investors. McLaren is a bit of standout compared to the other big teams which are owned by big corporations which use F1 has a marketing for their core business. McLaren on the other hand has F1 as it's core business and there are good reasons why Ron has been trying hard to expand into other areas and to find additional revenue streams to avoid to stand on a single leg with poor economics. McLaren did really well so far considering all the odds.

#31 SCUDmissile

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Posted 18 March 2013 - 18:56

McLaren have a sponsor lined up and imo Honda engines for 2015.

The P1 is already sold out no doubts, as is the Laferrari. That isn't relevant as only so many are built and most are spoken for, if not all.
The MP4-12C may be losing out to the 458, but that is because that was McLaren's first foray into the car industry for a long time, it came out a year after the 458, the Ferrari brand is much more entrenched than the McLaren, and lastly because the 458 is a great car winning many awards and earning critical praise.

For its first time, McLaren competed pretty well against the 458.

McLaren automotive won't have got into profit right now, but i hear it will soon. I don't think it is a Williams situation, and as Danardi says, McLaren's issues may be more to do with securing a future, and focusing on other areas away from F1 without much prior experience in doing so, apart from the F1.

Top Gear say that when Ferrari's F1 cars are good, their road cars are mediocre, when their F1 cars are mediocre, their road cars are brilliant. of course this is Top Gear, but they do raise a valid point about resources in a F1 team cum car manufacturer. So I feel their lack of success may be more to do with that.



#32 Shiroo

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Posted 18 March 2013 - 18:58

Why someone would sign with a team that atm is outside top 5.
Lotus doesn't have titular sponorship, and their lead driver is WAYYYYY MOREEEE valuable PR-wise and their performance atm is way ahead compared to McLaren



#33 Fastcake

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Posted 18 March 2013 - 20:48

Why someone would sign with a team that atm is outside top 5.
Lotus doesn't have titular sponorship, and their lead driver is WAYYYYY MOREEEE valuable PR-wise and their performance atm is way ahead compared to McLaren


Because you don't make sponsorship agreements based upon the performance in one race.

#34 CookinFlatSix

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Posted 18 March 2013 - 21:02

A title sponsor isnt going to suddenly appear mid season by the same token. i think everyone agrees that McLaren have till the end of the year to persuade a title sponsor not to go with Lotus instead.

McLaren have to be at the front to cut the type of deal they need.

#35 Fastcake

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Posted 18 March 2013 - 21:58

A title sponsor isnt going to suddenly appear mid season by the same token. i think everyone agrees that McLaren have till the end of the year to persuade a title sponsor not to go with Lotus instead.

McLaren have to be at the front to cut the type of deal they need.


Who agrees? You're not going to sign a sponsorship agreement with Lotus just because they finished above of McLaren either. McLaren are the better choice regardless of what happens this season. They're an established F1 team with a recent history of fighting for championships and wins, a good financial grounding, two drivers there on a talent, and if the rumours are true which they very much look like to be, a works engine deal with Honda.

But Lotus? They're a team that since Alonso's championship days have struggled to be consistently at the front, with a reduced technical department and resources since those days, who've had to hire a pay driver since the current owners took control, a customer engine deal with Renault, and a not very clear financial situation. It wasn't that long ago there were serious rumours about Genii's ability to finance the team, and venture capital types aren't known for their generosity to spend money without a clear return.

Assuming McLaren don't already have a new title sponsor, one team certainly looks the better option.

#36 CookinFlatSix

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Posted 18 March 2013 - 22:17

Williams were in exactly the same situation. And since then there are even less global brands around. These companies will pay analysts to look at the next 3 years or whatever, these firms won't be romantics, they will use every excuse to drive the price down, they will know all about Williams and all about 2014, engines etc etc

They will probably play Lotus vs McLaren to get the best deal for them. Emirates cut a deal with F1, not even stopping to consider the teams, why? Because they can now

Whitmarsh said it a lot more succinctly than I can, look it up

If Ron was on it I might have a little faith in someone coming in with 50mill plus for a multi year deal but it's all change now. Why do you think Saiber don't have a title sponsor or Lotus? Choice?

#37 Dolph

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Posted 18 March 2013 - 22:32

Why someone would sign with a team that atm is outside top 5.
Lotus doesn't have titular sponorship, and their lead driver is WAYYYYY MOREEEE valuable PR-wise and their performance atm is way ahead compared to McLaren



Indeed, why would anyone in their right mind sign with McLaren?




OK, I can't hold it any longer :rotfl: :rotfl: :rotfl: :rotfl:

#38 Dolph

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Posted 18 March 2013 - 22:34

Who agrees? You're not going to sign a sponsorship agreement with Lotus just because they finished above of McLaren either. McLaren are the better choice regardless of what happens this season. They're an established F1 team with a recent history of fighting for championships and wins, a good financial grounding, two drivers there on a talent, and if the rumours are true which they very much look like to be, a works engine deal with Honda.

But Lotus? They're a team that since Alonso's championship days have struggled to be consistently at the front, with a reduced technical department and resources since those days, who've had to hire a pay driver since the current owners took control, a customer engine deal with Renault, and a not very clear financial situation. It wasn't that long ago there were serious rumours about Genii's ability to finance the team, and venture capital types aren't known for their generosity to spend money without a clear return.

Assuming McLaren don't already have a new title sponsor, one team certainly looks the better option.



Exactomundo. In addition, Lotus is always up for sale. You might end up sponsoring a team that's image/owners/name/branding does not work with what you are trying to do.

#39 Dolph

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Posted 18 March 2013 - 22:36

Williams were in exactly the same situation. And since then there are even less global brands around. These companies will pay analysts to look at the next 3 years or whatever, these firms won't be romantics, they will use every excuse to drive the price down, they will know all about Williams and all about 2014, engines etc etc

They will probably play Lotus vs McLaren to get the best deal for them. Emirates cut a deal with F1, not even stopping to consider the teams, why? Because they can now

Whitmarsh said it a lot more succinctly than I can, look it up

If Ron was on it I might have a little faith in someone coming in with 50mill plus for a multi year deal but it's all change now. Why do you think Saiber don't have a title sponsor or Lotus? Choice?



McLaren isn't Lotus or Sauber or Williams.

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#40 Fastcake

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Posted 18 March 2013 - 22:51

Williams were in exactly the same situation. And since then there are even less global brands around. These companies will pay analysts to look at the next 3 years or whatever, these firms won't be romantics, they will use every excuse to drive the price down, they will know all about Williams and all about 2014, engines etc etc

They will probably play Lotus vs McLaren to get the best deal for them. Emirates cut a deal with F1, not even stopping to consider the teams, why? Because they can now

Whitmarsh said it a lot more succinctly than I can, look it up

If Ron was on it I might have a little faith in someone coming in with 50mill plus for a multi year deal but it's all change now. Why do you think Saiber don't have a title sponsor or Lotus? Choice?


Did you read what I said? McLaren are in no way the same situation as Williams were when BMW pulled out. The team, finance and performance are all much better. And if any company analyses McLaren vs Lotus for a big sponsorship deal, they'll come to the same basic conclusion that I did - McLaren are the better deal.

#41 Anonymous

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Posted 18 March 2013 - 23:04

Will this ever stop? These threads are hilarious. Yeah we can totally compare McLaren with Williams :rotfl:

Ron Dennis said a year ago that McLaren is aiming to be a billion dollar business. They have plans for two new factories and a new underground wind tunnel. And new cars in the upcoming years. And many other stuff.

“My ambition for the group is that in 10 years F1 is bigger, but is only 10% of our business,” he said. “Growth is not just automotive but also Applied Technologies. Planning went in last week for two new factories*. We intend to have turnover in the billions and we will achieve it.”

*
Posted Image

IT'S OVER, McLAREN IS FINISHED

Edited by Anonymous, 18 March 2013 - 23:05.


#42 onewingedangel

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Posted 18 March 2013 - 23:10

I have a feeling McLaren F1 have a number of new sponsors already lined up.

Telmex/Claro is a clash with Vodafone, but that obstacle will be removed next year, so I'd fancy they will be a sponsor. There have already been suggestions that the title sponsor would be a surprise which, if true, would rule out Telmex. If it would be a surprise it probably rules out a GSK brand, and possibly Coca Cola as these have all been rumoured, albeit the last one was discredited, so would still be a surprise.

Also if Honeywell are circling F1 they could also be a target for a technical partnership.

Edited by onewingedangel, 18 March 2013 - 23:11.


#43 maverick69

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Posted 18 March 2013 - 23:13

Will this ever stop? These threads are hilarious. Yeah we can totally compare McLaren with Williams :rotfl:

Ron Dennis said a year ago that McLaren is aiming to be a billion dollar business. They have plans for two new factories and a new underground wind tunnel. And new cars in the upcoming years. And many other stuff.

“My ambition for the group is that in 10 years F1 is bigger, but is only 10% of our business,” he said. “Growth is not just automotive but also Applied Technologies. Planning went in last week for two new factories*. We intend to have turnover in the billions and we will achieve it.”

*
Posted Image

IT'S OVER, McLAREN IS FINISHED


Awesome stuff.

If Ron doesn't deserve a Knighthood - then I don't know who does.

#44 yoyogetfunky

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Posted 18 March 2013 - 23:15

Will this ever stop? These threads are hilarious. Yeah we can totally compare McLaren with Williams :rotfl:

Ron Dennis said a year ago that McLaren is aiming to be a billion dollar business. They have plans for two new factories and a new underground wind tunnel. And new cars in the upcoming years. And many other stuff.

“My ambition for the group is that in 10 years F1 is bigger, but is only 10% of our business,” he said. “Growth is not just automotive but also Applied Technologies. Planning went in last week for two new factories*. We intend to have turnover in the billions and we will achieve it.”

*
Posted Image

IT'S OVER, McLAREN IS FINISHED


Some people only believe what they want to believe, sadly. Thanks for confirming my hunch the current business model is based on a 10 year or more plan.

#45 CookinFlatSix

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Posted 18 March 2013 - 23:21

Any analyst worth his salt will look at 2014 onwards and conclude that recent glories might not count for much going forward. McLaren has gone periods where they didnt win a single race for 2 years
No one knows the future and its not possible to guarantee McLaren will not go the way of Williams, Without a spending cap of some sort that is enforceable sponsorship is just not going to cover the costs anymore

Tooned had a prominent position on the car. Tag have increased the size of their position to replace. Tooned is a McLaren subsidiary and Tag has links with a shareholder.

Does this sound like sponsors are queuing up to buy space? not just on the Mclaren, on any car?

Seven of the 11 Formula 1 teams are struggling financially to the extent that they are in "survival" mode, says McLaren team boss Martin Whitmarsh.
Whitmarsh, who is also chairman of the Formula 1 Teams' Association that represents the majority of the sport's competitors, said: "It's tough.
"We're in the world of advertising and you only have to see how advertising is worldwide. The rate card is down.
"We have taken some measures, but I think it's going to be tough for some."
Whitmarsh reckons several teams will find it hard to "have a viable business model for a few years", while his opposite number at Caterham, Cyril Abiteboul, thinks world champions Red Bull are doing well financially but "everyone else is suffering".
Whitmarsh says much of the present problem is a hangover from the 2008 global financial crisis. Advertising and sponsorship contracts signed before the crash have come to an end. New backers are thin on the ground, while existing ones are not willing to pay top dollar for the privilege of continuing.

http://www.bbc.co.uk...rmula1/21463651

This was ofcourse said before losing the most lucrative title sponsor.

Just saying it might be better to forget about spending big to stay at the front and just focus on having a sustainable business for now - which was also the approach Williams went for

I just think its silly when one hears from fans that McLaren are immune to the real world, different to Williams or that they should just buy Cosworth and have their own engine etc etc

This is the real world and F1 ain't a cash cow, its a cash drain mostly if you want to be at the front. Ron would actually be better off without the F1 part and he knows it, which is why he wants the F1 side to be 10% of the groups activity in 10 years

But it aint 10 years right now, no one is saying its all over so no need for some to get hysterical, this is all about the Williams route. Why spend ruinously just to be at the front, better to get pay drivers and have a sustainable business in mid grid whilst the rest of the business like the car division is allow to grow

Edited by CookinFlatSix, 18 March 2013 - 23:26.


#46 Watkins74

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Posted 18 March 2013 - 23:29

Will this ever stop? These threads are hilarious. Yeah we can totally compare McLaren with Williams :rotfl:

Ron Dennis said a year ago that McLaren is aiming to be a billion dollar business. They have plans for two new factories and a new underground wind tunnel. And new cars in the upcoming years. And many other stuff.

“My ambition for the group is that in 10 years F1 is bigger, but is only 10% of our business,” he said. “Growth is not just automotive but also Applied Technologies. Planning went in last week for two new factories*. We intend to have turnover in the billions and we will achieve it.”

*

IT'S OVER, McLAREN IS FINISHED

When I was 20 my ambition was to have $1 Million by my 30th birthday. I only missed my goal by about $1 Million.

....the best laid plans....

#47 Ricardo F1

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Posted 18 March 2013 - 23:36

I'm still stuck on this Williams / McLaren comparison. That's mindboggling.

#48 CookinFlatSix

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Posted 18 March 2013 - 23:39

When I was 20 my ambition was to have $1 Million by my 30th birthday. I only missed my goal by about $1 Million.

....the best laid plans....


exactly, Williams Im sure had great plans and high hopes for the future. There is a difference between your plans and ambitions and the actual reality of the real world and the fickle economic confidence situation.

Most of those getting their knickers in a twist because some one likened McLaren to Williams are cheering because they have discovered that Ron said in 10 years he wants F1 to be only 10% of his empire.

Exactly! Ron has bigger things in mind, the F1 team is a neccessary evil t present, its not a sound business model full stop.

Instead of over spend just to come first like in the gflory days (which are actually at least a decade ago anyways) why not get rid of expensive drivers and engineers, bring in pay drivers, maintain a presence and try not to fall from mid grid. And put the 100 mill you save into better business models.

Probably the only thing is all these pesky head in sand fans who insist the team buy Cosworth and bring it back to glory etc etc

:rotfl:

#49 Anonymous

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Posted 18 March 2013 - 23:40

When I was 20 my ambition was to have $1 Million by my 30th birthday. I only missed my goal by about $1 Million.

....the best laid plans....


Sitting on your chair and posting nonsense on this forum won't give you a million dollars. Ever.

#50 Watkins74

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Posted 18 March 2013 - 23:42

Sitting on your chair and posting nonsense on this forum won't give you a million dollars. Ever.

Identifying your problem is the first step toward recovery. :kiss:

Relax my friend. :cool: