57 replies to this topic

[eronrules]

F1: Renault says customer teams late with payments

 

http://www.racer.com...e-with-payments

 

Jean-Michel Jalinier

 

"In order to develop the action plan we need to secure resources and our resources are coming from two sources," he said.

 

"One is Renault, and we have been able to secure the right resources, even human resources or financial resources, and the other part of it is coming from the teams because we are selling the engines to the teams. On this part I must say that we are not at an acceptable situation, because some of the teams are just late in payments, and at the time you need to spend resources to catch up you cannot afford to have those [late] payments."

 

he indicated that RBR and STR are not among late paying teams. 

 

 

When asked whether or not it was possible for the supply deals to be cut if payments were not made, Jalinier said: "That is an option. You first need to work with your team in order to recover and get back to some kind of financial situation.

 

[Slackbladder]

well it doesn't take too much reading between the lines to work out which teams

 

*cough* Lotus/Caterham *cough*

[tomjol]

As I understood it, and based I'm sure only on rumours, the Renault PU was already the most expensive of the three. Renault delivered at the start of the season a PU which appeared to be well behind its rivals in terms of development. In order to solve the problem, they are spending more money, and some teams are not paying up?

 

Of course, business is business and a contract is a contract, but this seems like an unusual complaint.

[KWSN - DSM]

Wonder if that will make the big teams and the FIA realize how dire the situation is?

 

[Bartonz20let]

So.... Renault built a 2 stroke and expect not only the teams to pay for a sub par product but also blame them for lack of upgrades because of cash flow.

If Renault wanted to gain any respect for the absolute **** box of a job they have done they should be giving those engines foc or at a reduced price, i wonder if lotus or caterham ave performance stipulations in the contract?

[Nicktendo86]

Only one party is coiming out of this looking bad, and it is Renault.

[Fastcake]

Bit sensationalist there OP. Mentioning the vague possibility of terminating the contract hardly means you need to highlight it in the title.

[MaxisOne]

Bit sensationalist there OP. Mentioning the vague possibility of terminating the contract hardly means you need to highlight it in the title.

 

However the fact that termination is an option that is being entertained is going to attract attention no matter how its inserted into the article.

 

As far as im concerned as long as  Renault are meeting their performance clauses in their contracts then they should be paid .. crap box or not. However, any attorney worth their salt would have written in performance contingencies. On the other hand Renault negotiated with a clearly dominant position last season so maybe they didnt accept too many performance contingencies in the contracts they agreed to.

 

This may get ugly or it may be resolved with some good faith effort. We will see. 

[jimbox01]

Somewhat presumptuous of Autosport to conclude that it's Lotus and Caterham who aren't paying up on time (Renault declined to identify the teams), and strange Renault never said a dickie bird about things when Lotus were (allegedly) behind on payments last year  - you'd think they'd have been just as keen to get the cash in back then.

 

However, it was the engine supplier (Cosworth) who pulled the plug on the 90's iteration of Lotus for non-payment, so there'd be a certain symmetry if it happened again, 20 years later.

 

Anyway, for all we know the Red Bull teams might be withholding payment until the problems are fixed, and this is Renault's way of hitting back at them - very often it's the bigger companies who're the worst payers because they think they're untouchable.  Renault could easily terminate a team like Caterham without loosing any sleep over it, but it would be much harder to do so with their flagship partners - but then who knows!

[Paco]

Only one party is coiming out of this looking bad, and it is Renault.

 

How so???   Renault has done an awesome job fixing and making their engine perform very well.  Just because Caterham can't produce a chassis that can't be less then 5 seconds slower then a proper race car doesn't mean it's Renault's fault.  And Lotus' problem are hardly just engine related and we already know they are tight on funds for years so.. i highly highly doubt their postiioning on the grid is mainly due to Renault. 

 

Redbull seem to be coming on nicely.

 

A contract is a contract.  If Renault had been the best engine and people weren't paying their bills and Caterham was graciously put into 4 best team simply because they got gifted the best engine.. would you be saying the same thing..  I HIGHLY DOUBT IT.

 

Pay your bills and get on with the job at hand.  Renault have been tremendous in addressing their engine from all the doom and gloom of just 3 months ago.. Impressive actually.. Redbull are very optimistic as a Renault about the coming races so I highly doubt Renault will be the issue for much longer..

 

WHOEVER IT IS.. PAY YOUR BILLS ...

Edited by Paco, 09 May 2014 - 17:04.

[KingTiger]

Clearly it's Lotus. I haven't heard of one supplier that's happy with them paying their bills. 

[Paco]

Clearly it's Lotus. I haven't heard of one supplier that's happy with them paying their bills. 

 

If Tony is thinking of closing shop, he may start getting behind on bills to be negotiated during legal closure of the company.  I wouldn't doubt both Lotus and Caterham are significantly behind on payments to Renault.

Edited by Paco, 09 May 2014 - 17:22.

[Massa]

So.... Renault built a 2 stroke and expect not only the teams to pay for a sub par product but also blame them for lack of upgrades because of cash flow.

If Renault wanted to gain any respect for the absolute **** box of a job they have done they should be giving those engines foc or at a reduced price, i wonder if lotus or caterham ave performance stipulations in the contract?

 

LOL.

 

When you buy a car, and with the time you find the car is unreliable, you ask some money to your dealer ?

[S3baman]

To those that are attacking Renault for delivering a shitbox, keep in mind that the over the last 3 months they've made more progress than any other engine manufacturer and a lot of the paddock people are saying the Ferrari engine is now the worst in terms of overall performance.

[charly0418]

So Lotus are behind on payments but they're not supporting cost control in F1? What's going on

[chipmcdonald]

What is going on is that the 1%'ers are completely out of touch with reality. 

 

But hey, the cars are fuel efficient.

Edited by chipmcdonald, 11 May 2014 - 04:23.

[Paco]

So Lotus are behind on payments but they're not supporting cost control in F1? What's going on

 

Cause cost control wont work, can't work and in doing so.. takes away from any motivation to be in F1.  Just cause you can't afford to be in F1 doesn't mean you don't get what F1 is about.

[ray b]

LOL.

 

When you buy a car, and with the time you find the car is unreliable, you ask some money to your dealer ?

we have lemon laws on new car purchases

you can return it for a refund if it breaks too many times

[BRG]

LOL.

 

When you buy a car, and with the time you find the car is unreliable, you ask some money to your dealer ?

Well, yes, you do.  If the product is not of saleable quality, you get your money back.  If Renault sell you a Clio and it won't start or keeps stopping, you take it back and complain.  Not sure why it should be completely different in racing.

[Paco]

What is going on is that the 1%'ers are competely out of touch with reality. 

 

But hey, the cars are fuel efficient.

 

And how exactly is an F1 engine fuel --- in terms of road cars???  Now.. give me a formula 1 engine that gets 15 liters per 100km and can get the same lap times they get today and I'll give you.. that they are fuel efficient..  The simply fact is.. its a race car.. talking fuel efficiency is just stupid even F1 tries to promote it as such.  From what I get, 100km of F1 fuel is about 130litres (+ or -)  .. so an F1 car gets on a track like the Canadian GP a fuel efficiency rating of 130 liters per 310km (warm up lap + race) so that is a rating of

 

41 liters per 100km.. at the Canadian GP.    thats 4x more the a very efficent 4-dr or 3x for an average thirsty sedan.. or 2x worse then most exotic road cars

 

F1 and Fuel Efficiency is hardly a good thing to say.. just like a Green F1.. etc.

[Bartonz20let]

How so??? Renault has done an awesome job fixing and making their engine perform very well. Just because Caterham can't produce a chassis that can't be less then 5 seconds slower then a proper race car doesn't mean it's Renault's fault. ...

Lol, if I crap down my leg and get it all clean 3 months later have I done an awesome job?

Renault basically excluded their teams from any real testing, not surprising Lotus and Caterham are struggling relatively, it's not like RBR are on par with usual standards either.

[Bartonz20let]

LOL.

When you buy a car, and with the time you find the car is unreliable, you ask some money to your dealer ?

no but I don't have a contract with my dealer and my misfortune is not of my dealers concern, btw, renault do not sell the engines, they lease them (afaik) so let's turn this analogy around, you rent a car, it blows it's head gasket and they send you the bill to rebuild the engine?

Edited by Bartonz20let, 09 May 2014 - 19:03.

[Paco]

Well, yes, you do.  If the product is not of saleable quality, you get your money back.  If Renault sell you a Clio and it won't start or keeps stopping, you take it back and complain.  Not sure why it should be completely different in racing.

 

You have the give the company a chance to fix whats wrong with it.  A lemon means its undriveable or unsafe to do so for fraught with issues.  A Renault engine is easily getting to the end of a GP and even though it wasnt the fastest.. there is zero guarantee it would be.  When the contracts were signed, NO ONE knew who would have the fastest engine.  So being down in performance, is hardly a reason not to pay your bills.

 

Plus, I hardly see any of the other manufactures supply any team other then RedBull and even then .. I highly doubt Mercedes would in 2014.. and Ferrari is probably no better and may even be worse at this point.  so ..

 

you better pay your bills cause its not as if there is a huge demand by engine manufacturers to supply them!

 

As for the lease.. its only in a lease in that Renault OWN the engines and let teams strap them into their cars.  Teams are not allow to keep them.  Its simply a pay per use type arrangement.  Use it.. pay for it.  Pretty simple.

Edited by Paco, 09 May 2014 - 19:24.

[PayasYouRace]

And how exactly is an F1 engine fuel --- in terms of road cars???  Now.. give me a formula 1 engine that gets 15 liters per 100km and can get the same lap times they get today and I'll give you.. that they are fuel efficient..  The simply fact is.. its a race car.. talking fuel efficiency is just stupid even F1 tries to promote it as such.  From what I get, 100km of F1 fuel is about 130litres (+ or -)  .. so an F1 car gets on a track like the Canadian GP a fuel efficiency rating of 130 liters per 310km (warm up lap + race) so that is a rating of

 

41 liters per 100km.. at the Canadian GP.    thats 4x more the a very efficent 4-dr or 3x for an average thirsty sedan.. or 2x worse then most exotic road cars

 

F1 and Fuel Efficiency is hardly a good thing to say.. just like a Green F1.. etc.

 

You have confused fuel efficiency (getting the most energy out per unit mass of fuel) with fuel economy (going the furthest per unit mass of fuel).

[BRG]

 Use it.. pay for it.  Pretty simple.

I used it.  It didn't work properly.  Why should I pay?

[pdac]

I used it.  It didn't work properly.  Why should I pay?

 

'cause you signed the contract

[BRG]

A one-sided contract?

[Fastcake]

'cause you signed the contract

 

Sale of Goods Act, which means BRG does not have to pay for the dodgy car Renault sold him if they do not fix the problems to his satisfaction. Similar legislation covers business contracts, most notably with no exception for engine supply deals in Formula One.

[Massa]

Well, yes, you do.  If the product is not of saleable quality, you get your money back.  If Renault sell you a Clio and it won't start or keeps stopping, you take it back and complain.  Not sure why it should be completely different in racing.

 

Renault engines start well and they are running. So Lotus and Caterham have just to pay and respect their contract. The only team who have reliability problem with the engine is Lotus. Red Bull is ok, Toro Rosso fine, Caterham fine.

[Fatgadget]

Ummmm...Are you guys for real? Since when normal sale of goods acts applicable for competition stuff?....At your own risk and all that **** No?

[Bartonz20let]

Ummmm...Are you guys for real? Since when normal sale of goods acts applicable for competition stuff?....At your own risk and all that **** No?

without reading the contract, it's impossible to say who's legally correct

[Paco]

I used it.  It didn't work properly.  Why should I pay?

 

Absolutely.  

 

What.. just because an engine blows a ring.. means you shouldn't pay for it? 

For some odd reason, even though its beyond rare these.. if a particular engine 1x was down on power because of a badly machined component.. .. does that mean you shouldnt pay..

What if the one of the Energy recovery components dies during a GP.. does that mean you shouldnt pay for it???

 

Things break.  tough.  If you don't like it.. build you own.

 

People here can not possibly believe that a team leasing an engine shouldnt pay for the ones they have used.. irregardless of its performance.. of which has been on par with Ferrari after race 1..  Seriously.. if a significant amount of people believe that.. along with the group who feels cost control-cap is a possible..  Then yeah.. F1 is a lost cause..

Edited by Paco, 10 May 2014 - 07:57.

[f1RacingForever]

The irony of hurting low budget teams that F1 is so determined to protect, caused by their own expensive engine regulations.

[study]

Redbull don't pay for there engines do they?

[Petroltorque]

There is no such thing as a free lunch. Red Bull per se might not be paying for their Power Units but someone has to cover the costs. As I understand it Infinity, the subsidiary of Renault, is covering the costs.

 Its a bit like warranty work one might get done on your car. You might not pay, but the garage franchise will  expect payment and that is usually from the manufacturer

[kenkip]

There is no such thing as a free lunch. Red Bull per se might not be paying for their Power Units but someone has to cover the costs. As I understand it Infinity, the subsidiary of Renault, is covering the costs.

 Its a bit like warranty work one might get done on your car. You might not pay, but the garage franchise will  expect payment and that is usually from the manufacturer

I did not know this,any links that may expound on this RBR renault deal?I always thought being the works team means that you dont pay ****

[Bartonz20let]

Supplying a 4x WDC team is great exposure for Renault (well should be) and if you can justify the expense and load the other costs onto your customers it's all gravy.

It's a bit of cyclical problem now, Renault engines don't work, customer teams underperform and fail to win forecasted monies and sponsorship contracts, teams can't pay , renault engine lacks funding and the circle continues.

It's in Renaults best interest to get the engine fixed as swiftly and as quietly as possible, what happens if they cancell the contracts? 2 teams dead for a season (or permanently), no customer teams except TR and no chance anybody will want your engine next season.

[paipa]

41 liters per 100km.. at the Canadian GP.    thats 4x more the a very efficent 4-dr or 3x for an average thirsty sedan.. or 2x worse then most exotic road cars

You're comparing oranges and apples. Try flooring your sedan and look at the instantaneous consumption on your dashboard if you have one. My 1.6 liter shitbox does 20-30 l/100, my old V6 30-40. If you were going round in an F1 circuit pushing hard as you should, you'd be doing three minute laps with thirty liter consumption.

[Paco]

Irregardless of whether Redbull pay or not, from early reports did a lot to help Renault overcome some of their development issues by sharing a lot of know-how.

 

That isnt point.. we are discussing a team or teams not honouring their contract and basically ripping off their main supplier by using their technology (expensive at that) and not paying.. and probably continually not following through on the commitments.   If they wanted free engines or them to be paid by a sponsor.. they should have arranged that!

 

Renault made it the grid and didnt blow by races end.  Fuel consumption on par and didnt run out of fuel.

Renault wthin less then a handful of races have gotten their act together and put out a nice engine that seems still has room for further preformance enhancements.

 

Pay your bills.. Renault is 100% in the right in cutting off supply to teams behind on payment.   Hey Bernie.. cough some of that precious track commission you collect at each race and help your poor struggling back markers or got in over the heads and cant pay for your costly engines.   I highly they would go to the media if it was the 1st missed payment. Especially since most likely those are the teams making them look bad by trolling around at the back end of the grid. 

Edited by Paco, 10 May 2014 - 08:08.

[Paco]

You're comparing oranges and apples. Try flooring your sedan and look at the instantaneous consumption on your dashboard if you have one. My 1.6 liter shitbox does 20-30 l/100, my old V6 30-40. If you were going round in an F1 circuit pushing hard as you should, you'd be doing three minute laps with thirty liter consumption.

 

OK fair enough, but it/s not as if driver are pushing very much too.. not a whole lot of flooring it by them either...

[PayasYouRace]

OK fair enough, but it/s not as if driver are pushing very much too.. not a whole lot of flooring it by them either...

 

Again you're taking a term in once context and applying it to another. The drivers might be taking it easy compared to their ultimate pace, but they're still using 100% throttle for most of the lap (mainly the straights of course).

[MustangSally]

It is now clear that Lotus is the team in arrears.

 

http://www.pitpass.c...ot-paid-Renault

 

There are some rumours that Lotus has a problem with payments from Venezuela. It is noticeable that PDVSA presence on the car has diminished and so has that of Genii. It seemed to me that perhaps they were doing race by race deals for the side pod . . . which in China was predominately Renault.

 

 

[BRG]

Ummmm...Are you guys for real? Since when normal sale of goods acts applicable for competition stuff?....At your own risk and all that **** No?

Does the Sale of Goods Act specifically exclude competition stuff?  If not, then it applies.  I know that the reality is that there is give and take in these things, but at the end of the day, if the product is substandard, the buyer has redress under law.  So if Renault break the contract with (apparently) Lotus, then Lotus could perhaps go to court to seek compensation.  Unlikely of course, but the law is the law and motor sport isn't exempt AFAIK.

[MustangSally]

As far as  I know, the Sale Of Goods Act revolves around three criteria: the product must be 1. As Described, 2. Of Reasonable Quality 3. Fit the purpose for which it was bought. Some of these are open to debate, therefore a consumer would typically involve a local Trading Standards Officer. 

[Skaffen]

Does the Sale of Goods Act specifically exclude competition stuff?  If not, then it applies.  I know that the reality is that there is give and take in these things, but at the end of the day, if the product is substandard, the buyer has redress under law.  So if Renault break the contract with (apparently) Lotus, then Lotus could perhaps go to court to seek compensation.  Unlikely of course, but the law is the law and motor sport isn't exempt AFAIK.

The Sale of Goods Act basically implies terms in contracts, but (especially in business to business contracts) the parties are free to contract to exclude the terms from the SoGA. With the money involved here there is no chance that the SoGA will apply (and there's also the question of which jurisdiction the contract is enforced under - it could be English or French law).

[KWSN - DSM]

I think anyone arguing that a team can stop payment due to some sort of performance clause are doing so on points which do not apply.

 

1) As a competitor in F1 you need an engine.

2) Team get a contract with engine manufacturer.

3) Contract between engine manufacturer and team dictate payment terms.

4) If team fail to follow contractual payment terms they are in breakage of contract.

5) Engine being good, bad, super or poor does not in any way, shape or form apply at all, team have to pay.

 

[xmoonrakerx]

Supplying a 4x WDC team is great exposure for Renault (well should be) and if you can justify the expense and load the other costs onto your customers it's all gravy.

It's a bit of cyclical problem now, Renault engines don't work, customer teams underperform and fail to win forecasted monies and sponsorship contracts, teams can't pay , renault engine lacks funding and the circle continues.

It's in Renaults best interest to get the engine fixed as swiftly and as quietly as possible, what happens if they cancell the contracts? 2 teams dead for a season (or permanently), no customer teams except TR and no chance anybody will want your engine next season.

 

See where is grosjean today, time to pay their bills?

[BRG]

 

5) Engine being good, bad, super or poor does not in any way, shape or form apply at all, team have to pay.

 

So (reductio ad absurdum) if I sign with Renault, and they rock up with an old Renault 30 V6 with a couple of U2 batteries wired to it, I have no comeback?  Surely a contract has terms protecting the customer's interests as well as the supplier's?

[billm99uk]

I find it kind of amazing that a team struggling to pay their bills can be so competitive! Usually a team in financial trouble starts heading towards the back, but not these guys. Back of the grid to P5 in four races. Must have managed to retain some hellishly good staff in there somewhere. Maybe prioritising staff salaries over engine payments ;)

[MustangSally]

I find it kind of amazing that a team struggling to pay their bills can be so competitive! Usually a team in financial trouble starts heading towards the back, but not these guys. Back of the grid to P5 in four races. Must have managed to retain some hellishly good staff in there somewhere. Maybe prioritising staff salaries over engine payments ;)

 

Enstone always defy any logic . . . after crashgate, they lost Flav, Pat and  Bob Bell in quite short order . . . they have lost drivers like Alonso, Kubica, Raikonnen, 80 people left recently . . .