Should we allow budget increase mid season

RB lobbying for it.   Vote away.

No.

RB lobbying for it.   Vote away.

7 of 10 teams...

 

 

Initially, it was mainly the biggest teams, including Red Bull and Mercedes, who were arguing the loudest about a budget cap increase, but now McLaren and Aston Martin have joined their ranks.

Only Alpine, Alfa Romeo and the Haas F1 Team are opposed to a budget cap increase now.

https://www.autoweek...-f1-budget-cap/

Aston Martin's take on why Cap Increase is needed:https://racingnews36...st-cap-increase

 

 

"The reason why we support it is mainly because the increasing costs are real - inflation is not something that has been invented.

"So, as long as the approach for inflation management in the regulations is reasonable, which it is [in] the proposals, we will support it.

"But, as I said, the situation in Russia and Ukraine drove the energy prices extremely high, air freight is very high. This you could not plan in any budget. So that's also why we support an increase based on inflation, but not an increase per see.

Edited by ARTGP, 24 June 2022 - 12:28.

Mclaren's supports of cost cap increase:

 

“We are in the middle of the season now, everyone has prepared for the season in order to somehow run at the cap and with these exceptional circumstances and these rises it’s pretty much impossible to still stick to the cap.

“That’s why I think it’s just fair to discuss solutions between all teams. And that means, from our point of view, it would be fair to increase the cap maybe linked to these specific costs that have increased significantly.”

 

The additional costs teams are facing run to “several millions”, said Seidl, “”because that’s the increase we see in freight costs, for example.”

https://www.racefans...-costs-mclaren/

It strikes me as the only teams that want to have it changed, are the teams that are likely to have spend/allocated all their money already and are subsequently finding out that inflation is holding them back now. Tough luck, i'd say.

Mercedes support of cost cap increase: https://the-race.com...-row-escalates/

 

Mercedes trackside engineering director Andrew Shovlin argued that the claim development spending could be reduced was not a logical one.

He stressed that Mercedes structured its spending to be within the cap, but that the dramatic increases in costs means the problem is now insurmountable.
“Early on, we had a plan to land on the budget cap and work within it as I’m sure everybody did,” said Shovlin.

“Then as costs like the freight were coming in at being multiples of that, or energy and just the effect of inflation, that’s gone from being looking at ways to peg it back to stay within to a point where the challenge becomes insurmountable.

Edited by ARTGP, 24 June 2022 - 12:32.

Ferrari support cost cap increase:

 

Binotto believes many teams will breach the cost cap as a result of what he considers “force majeure” circumstances.

“There will be no way for us to stay below [the cost cap], so I’m pretty sure that at one stage we will go over,” said Binotto when asked by The Race what the consequences would be if the cost cap was not raised.

“But I don’t think there is any way for us, and for many teams, to stay within [the cost cap].

“And even laying off people, firstly I don’t think the right choice.

“It’s already summer time, by the time you organise it and you do it the benefit it can have is not sufficient to cope with the excess of prices and cost we’ve got.”

https://the-race.com...-row-escalates/

Yes, where those budget increases are due to inflation. It isn't right that teams should have to make redundancies due to inflationary costs meaning they fall foul of the budget cap.

It's people's livelihoods atstake, after all. Why not create an exception that allows teams to give a payrise to their staff in line with inflation?

On that I do agree. So some leniency by the FIA towards teams that can prove inflation has pushed them over the budget limit and subsequently not punishing them, is a better solution rather than increasing the budget. But teams have to prove that they were within the budget at the time the inflation hit and what the inflation calculation was/is in order to breach this limit.

Edited by Beri, 24 June 2022 - 12:37.

Who is "we" ?

Me and you don't have any say in this ....

It's people's livelihoods atstake, after all. Why not create an exception that allows teams to give a payrise to their staff in line with inflation?

7 of 10 teams...

How do I interprete the ‘to maintain safe car only’ option? An allowance for an budget increase only for teams suffering from bouncing/porpoising?

I am very against any increase in the budget cap for this year.  The teams knew the rules, several have chosen to gamble that they would get an exception, and I would like to see the mayhem of teams running out of budget due to their poor judgement. 

No, Horner can suck it. 

While I voted No, I guess I could support an "overspend penalty" of say 10 to 1, with the penalty money split between the Teams that didn't overspend.

I suppose all those who vote no will out of principle refrain from pointing out inflation rates next time they sit down with their employer/clients to discuss salary/hourly rate terms?

From what I learned in the porpoising-thread. We are supposed to ignore all but one team. Then it depends on who you support, what team is getting the flak.

False equivalence. Atleast 7 team principals were against mid-season rules changes for porpoising.  

Edited by ARTGP, 24 June 2022 - 13:28.

I don't think it's totally unreasonable to raise it in the same proportion as the unexpected increase in inflation. More than that, no.

This is obviously the right thing to do for those looking at this pragmatically. UK inflation rates are at 9% as we speak. Freight rates may be significantly higher than that. I don't think people realise the impact this may have for the livelihood of teams and the people they employ. FIA may well have to step in to help out (smaller) teams struggling to make ends meet if this continues.

This is obviously the right thing to do for those looking at this pragmatically. UK inflation rates are at 9% as we speak. Freight rates may be significantly higher than that. I don't think people realise the impact this may have for the livelihood of teams and the people they employ. FIA may well have to step in to help out (smaller) teams struggling to make ends meet if this continues.

Yes, where those budget increases are due to inflation. It isn't right that teams should have to make redundancies due to inflationary costs meaning they fall foul of the budget cap.

It's people's livelihoods atstake, after all. Why not create an exception that allows teams to give a payrise to their staff in line with inflation?

The budget cap forced many teams to reduce staff size in the first place, so I don't put much weight on this argument.

This is obviously the right thing to do for those looking at this pragmatically. UK inflation rates are at 9% as we speak. Freight rates may be significantly higher than that. I don't think people realise the impact this may have for the livelihood of teams and the people they employ. FIA may well have to step in to help out (smaller) teams struggling to make ends meet if this continues.

Steiner said that an adjustment for freight would be acceptable to him as it is all handled by F1 making it easy to monitor/enforce.

He also pointed out that the teams are paid in dollars which has seen it's value increase versus the pound and euro which are used to pay the teams expenses, reducing the true impact of inflation.

I suppose all those who vote no will out of principle refrain from pointing out inflation rates next time they sit down with their employer/clients to discuss salary/hourly rate terms?

That's not the issue. If these whining teams had only $140m or less (like Haas), they would find a way to make do. Teams have been extraordinary creative in making a budget stretch when necessary.

The problem is that the complaining teams know that they can get more money from their owners or sponsors and want that extra money to fuel their quest for additional speed because they are either not performing as desired or caught up in a close title fight.

Unfortunately for them, the idea behind the budget cap is not just to ensure the survivability of all teams but to push them closer together.

So teams running out of (development) money is actually a design feature as it will allow smarter or simply more frugal teams to close the gap or move ahead....and more competition is what we all want. 

 

Unfortunately for them, the idea behind the budget cap is not just to ensure the survivability of all teams but to push them closer together.

So teams running out of (development) money is actually a design feature as it will allow smarter or simply more frugal teams to close the gap or move ahead....and more competition is what we all want. 

Bingo.

Surprisingly those begging the most for an increase are the ones bringing updates to the track most every race. 

Well, that's not really a surprise...

Edited by BoDarvelle, 24 June 2022 - 13:54.

So how does a budget increase help them if they are struggling to make ends meet?

It doesn't. The budget increase would help the teams that have funding in place but underestimated the almost unprecedented amount of inflation we see today. As I said, a follow up problem may come whereby teams simply run out of funding. That separate problem that is also a result of these inflation levels may well also need to be resolved later in the year. 

7 of 10 teams...

 

https://www.autoweek...-f1-budget-cap/

April 12th. Since then, Mick totalled a few cars. He will do that until Steiner supports Ferrari. 

The budget cap forced many teams to reduce staff size in the first place, so I don't put much weight on this argument.

Those factories don't run on nothing. Utilities have had steep price increases as well.

Steiner said that an adjustment for freight would be acceptable to him as it is all handled by F1 making it easy to monitor/enforce.

 

He also pointed out that the teams are paid in dollars which has seen it's value increase versus the pound and euro which are used to pay the teams expenses, reducing the true impact of inflation.

Only Haas is an US team and Liberty. Most are based in Europe with a weakening Pound or Euro.

Yes, but only to cover the increased costs of freight.

 

 

Only Haas is an US team and Liberty. Most are based in Europe with a weakening Pound or Euro.

I don't think you follow. The teams, ALL teams, are paid in dollars by Liberty. The budget is $140 million US dollars. Not euros. Not pounds. The dollar increasing in value compared to the pound/euro offsets a good chunk of the inflation some teams are crying about.

Utilities when talking salaries? Misdirection.

Edited by BoDarvelle, 24 June 2022 - 14:12.

It strikes me as the only teams that want to have it changed, are the teams that are likely to have spend/allocated all their money already and are subsequently finding out that inflation is holding them back now. Tough luck, i'd say.

They are also the ones that have ambition and are not just here to collect the prize money at the end of the year.....

Edited by MasterOfCoin, 24 June 2022 - 14:09.

For those who voted 'No':

Would any amount of cost inflation justify lifting the cost cap? For you is it a matter of principle or is it a question of degree?

That's not the issue. If these whining teams had only $140m or less (like Haas), they would find a way to make do. Teams have been extraordinary creative in making a budget stretch when necessary.

For those who voted 'No':

 

Would any amount of cost inflation justify lifting the cost cap? For you is it a matter of principle or is it a question of degree?

 The Concorde agreement has a mechanism to adjust for inflation. Use that.

It should also be noted that the budget cap base figure, before any inflation adjustment, is $135 million next year iirc. Boosting the budget midseason when it is supposed to lower next year will simply destroy the whole idea of a cap.

Basically some of these teams, those that still claim to have 800+ employees, apparently had little intention of following the cap in the first place. And the rate at which they are bringing updates it looks like they are refusing to change their plans midstream, but rather expecting an adjustment to save them from themselves.

For those who voted 'No':

Would any amount of cost inflation justify lifting the cost cap? For you is it a matter of principle or is it a question of degree?

April 12th. Since then, Mick totalled a few cars. He will do that until Steiner supports Ferrari. 

 

 

Edited by ARTGP, 24 June 2022 - 14:40.

I suspect that teams might resort to only fitting only the higher placed driver in the WDC with upgrades in the later stages of the season.

Edited by ARTGP, 24 June 2022 - 14:43.

It should also be noted that the budget cap base figure, before any inflation adjustment, is $135 million next year iirc. Boosting the budget midseason when it is supposed to lower next year will simply destroy the whole idea of a cap.

No.

They should adjust it for next year.

All the big players will overspend anyway

I suspect that teams might resort to only fitting only the higher placed driver in the WDC with upgrades in the later stages of the season.

Wait for the outrage if teams start to outsource parts from China to save money...

Edited by Viryfan, 24 June 2022 - 16:09.

How about 1 point deduction per $100k USD in excess of the budget cap?  

Nah, I still say there should be no increase.  The teams complaining are the ones who blew their development budgets and are not acting in good faith.

I don't think you follow. The teams, ALL teams, are paid in dollars by Liberty. The budget is $140 million US dollars. Not euros. Not pounds. The dollar increasing in value compared to the pound/euro offsets a good chunk of the inflation some teams are crying about.

Utilities when talking salaries? Misdirection.

It isn't about what Liberty pays you. It is what the teams pay for everything. Almost every team has a wind tunnel and it uses energy like no other. A team could spend a few million on electricity to run everything.

Does the power come from the grid, or do they have their own generators?

No.