14 replies to this topic

[tsrwright]

Can't find some figures I had for expenditure of the German grand prix teams pre-war as given in Cameron Earl's 1947 report. Does anyone have the report to hand or have a reference to, say, Motor Sport?

[Roger Clark]

Cameron Earl says that the gross outlay of both teams was 2,500,000Rm (£209,000) per annum, offset by an annual state grant of 500,000Rm (£41,600).  However:

 

For Mercedes: "No draughtsmen were carried by the experimental workshop, components being detailed by the main drawing office when required.  The experimental workshop did not manufacture any of the components for the cars, being engaged solely on assembly and experimental work.  Absolute priority was given to racing requirements by the main machine-shop of Mercedes-Benz however, with the result that in an emergency a new component could be manufactured more quickly than in the case of Auto-Union, where all components were actually manufactured in the racing workshop."

 

"Auto-Union regarded their racing workshop and Laboratory as a self-contained unit, responsible for the actual manufacture of the Grand Prix machines.  The racing programme was not allowed to interfere with the normal work of the main Auto-Union workshops.  It can there be seen that the racing potential of Auto-Union was considerably lower that that of Mercedes-Benz".

 

It seems therefore that Auto-Union were restrained by their 2.5m Rm budget, but that for Mercedes, money was no object.  Further, these costs seem to deal solely with design, manufacture and development.  There is nothing that I found about the actual cost of running the racing team.

Edited by Roger Clark, 07 December 2014 - 12:13.

[tsrwright]

Many thanks Roger. As usual it's hard to draw any comparisons with other racing costs I have been collecting as incidental background for a book, but I cannot help trying. Could I surmise that there was something like £50,000 per German car running costs?

 

The German annual  costs per car would be between £2.5mill (inflated by cost of living) or £12.5mill (inflated by share of GDP) today. At a pinch, could you run an F1 car  for that today? I think the top teams are currently spending £100mill per car but that must include building everything.

 

In 1937, Boddy wrote about people who didn't have £1000 a year to spend on racing and suggested they didn't do it (May 1937)

 

In 1935 -1939 Bira's average annual running cost were £5300, or about £2000 net of winnings and start money etc (Blue and Yellow) but I am not sure how many cars competing at one time that this covered.

 

I do have a copy of an account book of a driver who was making a profit racing prewar but that was on the speedway.

 

I would be Interested in any further information anyone has.

 

Terry

[Vitesse2]

Conversion rates on the Reichsmark should be treated with extreme caution. Although it was traded on the currency markets - and the rate which Earl has used is roughly correct for the years 1934-35 and most of 1939 - it was subject to strict exchange controls and almost certainly artificially supported by the Reichsbank in order to maintain its level. German economic policy was centred on attracting hard foreign currency - USD, GBP, CHF - to pay for raw material imports and German exports were heavily subsidised to that end.

 

The need to pay drivers in foreign currencies was part of the reason the German teams didn't hire more foreigners: Caracciola, who was a special case, having lived in Switzerland since 1929, was paid in Swiss francs, but it seems possible that one of the reasons Kautz was let go by Auto Union at the end of 1938 was the need to pay Nuvolari in Italian lire. Seaman, who was independently wealthy, elected to live in Germany and was paid in Reichsmarks - giving him a very comfortable standard of living there. I doubt he touched his UK income very much - if at all - in 1938 and 1939, since the amount he left in his will was enough to buy a decently-equipped small London flat for cash!

 

Those figures for Bira would essentially cover the cost of running four cars. In any one year they always had two ERAs (Romulus ever-present, Remus sold to Rolt 1938, replaced with Hanuman), plus - at any one time - one or two of the Delahaye 135 (sold to Willing 1938), the Delage (used only in 1937, sold to Parnell 1939/40) and the Maserati 8CM.

[Vitesse2]

Oh, and a couple of 'on the credit side' amounts: in 1937 the winner of the French Championship for Drivers (Sommer) received 10000 francs - this was doubled for 1938 to 20000 francs. Now, that may sound a lot, but the volatility of the franc didn't help: during 1937 it averaged about 125 to the pound, which meant it was worth about £80 to the winner. Despite that doubling, in 1938 it averaged about 165 to the pound, so Dreyfus effectively won about £120! AFAIK it remained at 20000 for 1939, with the franc at about 175 to the pound.

 

In contrast, when the British Motor Racing Organisers Association introduced their season-long points system in 1938, the top prize was £250. I believe there were also minor prizes, but I've never seen a full list.

[RAP]

Another way of looking at it -

 

“Hitler loved cars and wanted every family in Germany to

own a car. He even became involved in designing the affordable Volkswagen (The

People's Car). The Nazis created a scheme whereby the workers could get a car. The

Beetle, designed by Ferdinand Porsche, cost 990 marks. This was about 35 weeks wages

for the average worker. "

 

So an average worker was paid about 1500RM per year, so a budget of 2.5 M RM was 1,666 man/yrs. If today's average UK wage is around £25000 then the equivalent is (.025 x 1666) =  £42 M – nowhere near enough for a modern F1 team. !  (assuming I've got my decimal points right !)

[Roger Clark]

As i said in Post2, Cameron Earl's report suggests that the figure of 2.5M RM didn't come close to Mercedes' total expenditure.  The majority of the design work, manufacture of parts and the cost of the racing team itself were not included.   Auto-Union was closer but still more than 2.5M.  Of course, the pre-war teams didn't have the same level of hospitality to pay for.

[Doug Nye]

The 1954-55 Daimler-Benz racing programme cost the company something like 62-million Deutschmarks. Divide that by the number of years through which D-B traded off the reputation then underlined and it looks unbelievably good value...

 

DCN

[Ray Bell]

And for comparison, when Williams went to a 2-car team with Jones and Reutemann, their budget for the year was $US39,000,000 (or £39,000,000 if my memory is failing me...) which would seem to be an awful lot less than today's budgets.

Well, it is 34 years, I guess...

[Roger Clark]

The 1954-55 Daimler-Benz racing programme cost the company something like 62-million Deutschmarks. Divide that by the number of years through which D-B traded off the reputation then underlined and it looks unbelievably good value...

DCN

Every one of the cars is probably worth more than that today!

I think the exchange rate was between 11 and 12 DM to the pound, so £5M indeed sounds unbelievably good value.

[Doug Nye]

As of July 7, 1955, the exchange rate was DM 11.67 to the £ Sterling.

 

Happy daze...

 

DCN

[Roger Clark]

I wonder what it would be today if they hadn't gone into Der Euro.

[Vitesse2]

I wonder what it would be today if they hadn't gone into Der Euro.

Well, even including the euro period it's about two and a half! It got close to two back in 1995.

 

http://fxtop.com/en/...2=2014&btnOK=Go!

[Roger Clark]

I know that but don't you think a German currency might be a lot stronger if not held down by certain other countries?

[Vitesse2]

Indeed, probably nearer par!