68 replies to this topic

[pup]

When preparing the budget for this new season, they were explictly aware of the budget cap. Any sane time would include some budget for crash-repairs. There is not a single season in the history of F1 were there was a car that needed zero repairs. They will all have allocated an estimated amount for crash-repairs.

Actually, probably not.  Sure, they know that there will be crashes, and they know the average damage and the average amount of time to replace the parts.

 

But, each year is still different, so you don't just plan for the average.  You plan for what happens if you have more crashes; and just as importantly, what happens if you have less.  And since R&D has a long lead time before production, you'll have to plan for upgrades that will only be realized if you're on the lucky side with crashes.  So particularly at the first of the season, you'll have more upgrades in the pipeline than you'll likely ever do.  I'm sure that's exacerbated this year by a greater focus on next year's car.

 

So, I'm positive he's telling the truth when Toto says that this will cost them upgrades.  Quite the opposite to what you're saying, it would be madness if it didn't.  

Edited by pup, 19 April 2021 - 20:32.

[Requiem84]

And that’s exactly why budgeters will plan on estimations: to prevent a company from having to cancel planned procedures and work streams.

[smitten]

And that’s exactly why budgeters will plan on estimations: to prevent a company from having to cancel planned procedures and work streams.

But this is not a normal business- money allocated to crash repair and unspent at season end is wasted money. It could have been spent on upgrades.

[pup]

Exactly, it's not X amount of money allocated to repairs; it's X amount allocated to carbon fiber production.  Realistically, they know some amount of that budget will be used for repairs, but ideally all of it would go to upgrades.  And they plan for more upgrades than they could do on average, because if they have a better than average year, they don't want to pay people to stand around.

Edited by pup, 19 April 2021 - 20:56.

[loki]

There's a couple things at play here.

Surely the raw materials cost of new materials isn't that high. But producing new parts by hand and then bake them in an autoclave is a time consuming effort. And I suppose time is limited due to the reduced resources. Rebuilding half a car will surely be worse use of that time than building and experimenting with new parts. 

^^^^^^ This.  It’s the opportunity cost.  The fact you have to take people and resources that were doing something else and have them bake another tub.  At least it’s early enough in the season they’ll recover.  Even before the cap they didn’t have people and machinery waiting around for something to happen to need to bake another tub.  My understanding is a tub takes about a week from layup to completion and each of the other parts two to three days each.  If they don’t have new parts ready already they’ll have to make enough current spec parts to tide them over.  Best case new parts are ready and current spec parts can be handed down for short term spares.  That would mean only a tub. Even diverting production for a week can cramp their style.

[MikeTekRacing]

And that’s exactly why budgeters will plan on estimations: to prevent a company from having to cancel planned procedures and work streams.

so they should have planned more budget for repairs and keep that money from R&D vs putting that money in R&D and kindly asking drivers not to total too many cars?

it doesn't make any sense. If they lock the money for repairs, they get nothing. If they put it into R&D, the worst case scenario is they get nothing. But the best case scenario is different

[Singularity]

Toto was very quick in saying the chassi was "probably a writeoff". In my opinion too quickly and it felt like politics. I have not really followed it so if they have confirmed that they need a new chassi, then I'm wrong, but I am fairly certain Bottas will have the same chassi for next race.

[Requiem84]

Exactly, it's not X amount of money allocated to repairs; it's X amount allocated to carbon fiber production.  Realistically, they know some amount of that budget will be used for repairs, but ideally all of it would go to upgrades.  And they plan for more upgrades than they could do on average, because if they have a better than average year, they don't want to pay people to stand around.

So they were hoping for a better year than average, which was an unrealistic expectation to start with?

[Sparky68]

Is this really effecting them? Apart from some extra carbon fibre, they already have the persons fixing this on contract. I know it's nice to say "a front wing costs about 150.000" but that includes all engineering and man-hours to make it. They still have to pay for those. It's also not like they have to buy a new autoclave or something. The thing is already there and the operators are already being paid a monthly salary.

Rumour is Merc actually make very little at the factory , a lot of it is shipped out to external suppliers.

[Requiem84]

Rumour is Merc actually make very little at the factory , a lot of it is shipped out to external suppliers.

You work at the RB factory right? So I think youre a good source on this.

If Merc is paying external suppliers for bespoke parts I can see Toto’s point. Buying additional parts is much more costly obviously. But if it’s true, they made a mistake by keeping this supply chain instead of insourcing the production.

[renzmann]

I think most of this is Toto downplaying Mercedes as a favourite this season. We all saw the W12 was the quickest car on Sunday (maybe not on Saturday), and all we talk about is them being harmed by the budget cap. So it works.

 

However, I'm sure there is some truth to this. As people have been pointing out, in the best scenario for Merc, they only have to invest in additional material which I assume will cost far less than 500,000 $ (rather 100,000, I reckon). Sure, workers can't do another (updating) job at the same time, but developing new parts is R&D and R&D statt mostly doesn't physically build the car. So I guess opportunity costs are limited. If Sparky is right, it might be another story: If they outsourced building the car, workers will probably paid on a honorarium basis. In that case, a new car might cost well over a million dollars. But even if it's only roundabout 100,000 $, it'll harm them. That's nearly .1 % of the budget! I'm sure they will have anticipated crashes, but the crash budget will be dry after Sunday. Considering every $ of the budget has a purpose, this means they will have to reshuffle resources one way or another. Not ideal for Merc.

[Augurk]

If Merc is paying external suppliers for bespoke parts I can see Toto’s point. Buying additional parts is much more costly obviously. But if it’s true, they made a mistake by keeping this supply chain instead of insourcing the production.

Wouldn't be so quick to judge they made a mistake.

For many companies it can be more cost efficient to outsource specific parts of their production process as specialized companies are able to do it much more efficiently.

[pup]

So they were hoping for a better year than average, which was an unrealistic expectation to start with?

I don't know how better to explain it.  You've got a guy who does carbon fiber and he can work on a repair or he can work on a new wing.  You may plan for him to spend 30% of his time on repairs, but if those repairs aren't needed, you aren't going to tell him to chill, have a smoke and start up a card game to pass the time.  You put him on an upgrade; and if you're smart, you've got enough potential upgrades in the pipeline to keep him busy even if neither driver puts a scratch on the cars all season.  So yes, every bit of repair work he does ultimately takes away time from some upgrade.  That's probably nothing new for this season, just that the effects are more acute due to the budget cap and the limited time the teams have budgeted for the current car.  Though potentially with a higher budget, the bottleneck for upgrades was in design rather than production.

Edited by pup, 20 April 2021 - 14:13.

[Requiem84]

I don't know how better to explain it.  You've got a guy who does carbon fiber and he can work on a repair or he can work on a new wing.  You may plan for him to spend 30% of his time on repairs, but if those repairs aren't needed, you aren't going to tell him to chill, have a smoke and start up a card game to pass the time.  You put him on an upgrade; and if you're smart, you've got enough potential upgrades in the pipeline to keep him busy even if neither driver puts a scratch on the cars all season.  So yes, every bit of repair work he does ultimately takes away time from some upgrade.  That's probably nothing new for this season, just that the effects are more acute due to the budget cap and the limited time the teams have budgeted for the current car.  Though potentially with a higher budget, the bottleneck for upgrades was in design rather than production.

 

I don't know either how to better explain that they should have already allocated time for that guy to work on manufacturing parts that broke on the car. 

 

Not doing so is making a guess on how the season will pan out. Allocating expected time for him to work on fixing the car every other couple of races would be how to approach this from a business perspective. If that need doesn't materialize because somehow Bottas and Hamilton crash their car much less than average, that guy can always still work on producing updated parts.

 

If Toto would say to the press we have had 15 crashes this year and that is hampering our upgrade path, I think it makes sense. Saying it after only 1 crash in 2 races is mere politics. Which sadly many seem to be buying as gospel.

[pup]

Allocating expected time for him to work on fixing the car every other couple of races would be how to approach this from a business perspective. If that need doesn't materialize because somehow Bottas and Hamilton crash their car much less than average, that guy can always still work on producing updated parts.

Which is exactly what I'm saying.  

 

And if they do crash, then he isn't working on those parts.  Ergo...

Edited by pup, 20 April 2021 - 14:22.

[Paco]

I don't know either how to better explain that they should have already allocated time for that guy to work on manufacturing parts that broke on the car. 

 

Not doing so is making a guess on how the season will pan out. Allocating expected time for him to work on fixing the car every other couple of races would be how to approach this from a business perspective. If that need doesn't materialize because somehow Bottas and Hamilton crash their car much less than average, that guy can always still work on producing updated parts.

 

If Toto would say to the press we have had 15 crashes this year and that is hampering our upgrade path, I think it makes sense. Saying it after only 1 crash in 2 races is mere politics. Which sadly many seem to be buying as gospel.

 

What you may be failing to recognize is that they are working with 30-50% less budget this year.. that's huge to get use to in its first year.   So every dollar, every issue hurts.  Cause they are still trying to figure out how to work with far less resource.   And least not, he is always Anxious about getting caught and paranoia about performance.  They set their target to low this year and got caught.. so yeah, even if they were the better car the Russell debacle would have sucked, but not even more so.. cause they need ever penny going to performance not to rebuild a chassis that was destroyed due to a stupid wet track line pass.. by his future protege.

 

Perhaps you haven't worked or been responsible for a business downsizing but yet trying to stay as is.. its impossible, it takes a lot of time and internal strife to get back on a steady ground.  In those situations, people even start losing their minds when the company provides coffee and donuts at a meeting.. how can we afford that if we just let 30 staff go type crap.

Edited by Paco, 20 April 2021 - 14:27.

[Requiem84]

Which is exactly what I'm saying.  

 

And if they do crash, then he isn't working on those parts.  Ergo...

 

The thing is - and I think you seem to agree with it like this - is that Toto makes it sound like they had this guy working on updated parts for the whole year.

 

Now there is a big crash and Toto suddenly says 'well uh, this guy can't work on updated parts anymore uhhhh'. Then my point is: well Toto, what did you expect? To have zero crashes this year?

[Ivanhoe]

Maybe they didn't expect a total write off all season, let alone already in race 2. When was the last time a Mercedes had a crash like this?

Edited by Ivanhoe, 20 April 2021 - 14:59.

[Requiem84]

Maybe they didn't expect a total write off all season, let alone already in race 2. When was the last time a Mercedes had a crash like this?

 

In 2019 alone I count 4 big crashes by Bottas alone...

 

 

As of 2:20.