Until a few years ago when referring to Lotus and Formula 1 things were pretty straightforward. In my view, with the exception of Ferrari, Team Lotus were the greatest team ever to race in Formula 1. Perhaps from the statistics and race performances they were not so great, but their contribution went far beyond mere statistics. If you look at today’s F1 car: many of the key features can be attributed to innovations pioneered by Lotus: monocoque chassis, the engine being a structural part of the chassis, rear mounted radiators and the use of underbody aerodynamics are some of the list. Lotus were a great team (note the underlining) and like Ferrari deserve to be remembered as playing a major role in the history of F1.

Sadly of late the name of Lotus is no longer associated with such greatness but with petty legal arguments and as a name which is for sale to the highest bidder. This is a sad state of affairs and appears to have got even more confused with the sale of Group Lotus’s owner Proton, the Malaysian car manufacturer, to another Malaysian automotive operation: DRB-Hicom. This has led to the end of ‘Lotus’ sponsorship for the former Renault team (and before that Toleman and Benetton) who are now called Lotus F1. So perhaps this means the Lotus name will finally be allowed to bow out of this sad attempt to resuscitate the Chapman legend? It seems not, owner of Lotus F1, Genii Capital’s Gerard Lopez is recently quoted “We are happy to carry the Lotus name as we believe it is a good name for F1″. Actually I think the opposite, please treat the name and legacy with some respect and let it be, we’ve seen how great automotive brands can be destroyed by those who are simply trying to make a fast buck. If someone is going to regenerate the Lotus name we need someone like Ferrari’s Luca di Montezemolo, someone who understands the care and attention needed to make an established brand live on, not those who seek to make a quick return from its sale and exploitation. It’s time for everyone to move on and leave the Lotus F1 legacy in peace.

Apparently an exchange of views has occurred between Bernie Ecclestone and Lewis Hamilton regarding the choice of management Lewis made, following his split with his father Anthony, back in 2010. Bernie having the view that it would have made more sense for Lewis to stick with his father, and Lewis declaring himself very happy with his move to Simon Fuller’s XIX Entertainment.

The subject of driver management in motorsport is an interesting one. There have been various forms of ‘manager’ over the years, the fact that Bernie is commenting on Lewis’s management is germane as he began his involvement in F1 as a driver manager, first advising Stuart Lewis-Evans in the 1950s and then with Jochen Rindt in the 1960s. Here the focus was very much on negotiation and contracts, something that Bernie, as we now know, had a bit of talent for. These tend to be independent managers, focused on motorsport who are directly advising one or several drivers and who certainly tend to be with them at races. They have often moved into management either from being a driver, or more often when they supported the driver at an earlier stage in their career. Examples would be David Robertson who looked after Kimi Raikkonen and Jensen Button, Martin Brundle looking after David Coulthard and Willi Weber with Michael and Ralf Schumacher.

Today it is very much the norm for drivers to have their own managers, effectively managing their financial affairs and negotiating on their behalf, although there are still one or two who like to handle things themselves such as Gerhard Berger and current world champion Sebastian Vettel. At the F1 level there are not often the close family relationships between driver and manager, such as that which existed between Lewis and his father, although Mark Webber took things a stage further and is living with his former manager, Ann Neal, and Jean Todt’s son Nicolas was managing Felipe Massa when Todt was CEO of Ferrari, which must have made negotiations interesting. Flavio Briatore may have had to negotiate with himself when he was Team Principal of Renault and also managing Fernando Alonso. So things have sometimes got a bit complicated.

An alternative approach is followed by those who go down the professional sports management route: using a specialist organisation to provide the support, such as the services provided by CSS Stellar which in addition to a range of sports/entertainment businesses includes individual sportsman/woman management.  This was founded by lawyer Julian Jakobi, formerly Ayrton Senna’s manager. As far as I’m aware the first driver to go down the route of using a professional sports management organisation was Jackie Stewart in 1968. JYS enlisted the help of Mark McCormack’s IMG operation, (he of – ‘What They don’t Teach you at Harvard Business School’ fame), which up to then had focused on professional golf players such as Arnold Palmer, Jack Nicklaus and Gary Player. Famously JYS’s first ‘assistant’ ,provided by IMG, was one Martin Sorrell who went on to do rather well for himself eventually becoming chairman of marketing communications conglomerate WPP. Here the benefit of the management company is more geared towards the wider ‘celebrity’ of the driver and makes a lot of sense – as was the case with JYS – if you have an eye on the longer term earning potential of the individual ‘brand’. It is therefore probably too early to say whether or not Lewis has made the right decision in going to XIX Entertainment. However one thing I did find out on a visit to Tennessee was that XIX Entertainment owns Graceland, Elvis’s former residence, I wonder if they’ve now got an eye on a certain property in Stevenage?

Over the years car manufacturers have come and gone from F1, given the mass exodus we had in 2008/9 with Honda, BMW and Toyota all leaving and with Renault downscaling to engine supply, you could be forgiven for thinking that we were entering another manufacturer free period, similar to that that existed in the 1970s when only Fiat (via Ferrari) and Ford (via Cosworth) were involved.

However we have recently seen a new phenomenon with car manufacturers such as Proton’s Group Lotus and Nissan’s Infiniti entering F1, not as constructors or even engine suppliers, but as sponsors. This is an interesting shift and one which seems to suggest a changing business model for the manufacturers in F1. It may be that both Lotus and Infiniti will become more involved, but currently they have decided the acquisition of a team or building, or badging, their own engine is not the way to go. Perhaps we will see more partnerships of this kind between car manufacturers and F1 teams – watch this space!

The current dispute between Tony Fernandes’ Lotus F1 team and Group Lotus, owned by Proton cars, underlines the importance of brands and who owns them. Formula 1 is a brand business, F1 itself is owned by CVC Capital Partners, a brand which they protect and enforce in order to make significant returns on their investment. But even Formula 1 is secondary, in terms of global presence, to its most successful team – Ferrari, and it is the Ferrari brand that provides an example to all in F1 as to what can be achieved from fast cars and motorsport. Of course the irony is that Enzo Ferrari wasn’t interested in building brands, he just wanted to win races and his road car operation was only there to fund the race team – the exact opposite of the other automotive manufacturers who have typically looked to F1 to help them sell road cars. And it is probably for this reason that the Ferrari brand has always been so different and so enigmatic.

A number of teams have attempted to emulate Ferrari, the most recent being McLaren. McLaren’s foray into high value road cars and other luxury items such as audio systems have underlined McLaren Group’s aspiration to become a global brand to the same value and impact as Ferrari. There is clearly a long way for them to go, but their recent move away from the Mercedes brand and their focus on a new road car, the McLaren MP4-12C, has indicated a clear strategy where the F1 team is a key element, but not the only component in a brand building activity.

Enzo Ferrari was famously contemptuous about the British constructors during the sixties and seventies, referring to them as garagistes and assemblatori, in other words he did not consider them to be proper race car manufacturers, but it was also recognised that the one person he really respected was Lotus founder Colin Chapman, you only need to read Enzo’s foreword to Jabby Crombac’s excellent book on Chapman, “Colin Chapman: The Man and His Cars” to recognise this. Chapman’s Lotus was the thorn in Ferrari’s side during both their heydays from the sixties through to the late seventies. The most remarkable thing about Chapman was that he was not only a very capable leader and negotiator as, of course, was Enzo, but he was also a brilliant engineer. If you track the evolution of the F1 car from 1960 through to 1980 the majority of the major innovations and trends were down to Colin Chapman. The Lotus team were famous for their ‘all-nighters’ during this time and we are not talking about partying until the small hours, but working on the cars, rebuilding and modifying through the night to ensure that Chapman’s latest tweaks and ideas were incorporated in the car before the race. During this period Lotus was the name and brand that was equal to, and often beating Ferrari. And like Ferrari, Lotus also had a flourishing road car business, focusing on both tuning existing mass produced cars such as the Lotus Cortina with Ford and the Lotus Sunbeam with Chrysler, and producing light, innovative sports cars such as the Lotus Elan and Lotus Elite. They were in a different space to Ferrari, less of the luxury and more of the fun and performance.

And so today what we see between Tony Fernandes’ Lotus F1 team and Malaysian car manufacturer Proton’s Group Lotus is a battle for the Chapman legacy. Proton acquired and rescued the ailing Lotus company in 1996. Through investment in new products such as the Lotus Elise they sought to regain the ethos and spirit of Lotus, with a relatively low cost sports car that acquitted itself well on the racetrack and also used innovative technologies such as a bonded aluminium chassis. Certainly in rebuilding the business they did not see F1 as an essential ingredient, and focusing at the club level they have rebuilt the Lotus motorsport presence. Then along comes Tony Fernandes and Mike Gascoyne with a vision and passion to rebuild the Lotus F1 team, locating in Norfolk and using the Lotus name licensed from Group Lotus. The new team is very much the best of the new entrants it has impressed on the paddock and (most importantly) Bernie Ecclestone that they mean business and are here to stay. In reaction to this event Group Lotus appear to realise that there is an opportunity here, they recruit Dany Bahr from Ferrari to help build up their brand, who then brings in a number of Ferrari personnel and then start to look at running their own GP2 race teams in conjunction with ART and Felipe Massa’s manager Nicolas Todt. The licensing deal with Tony Fernandes falls apart and now the lawyers are going to get rich.

Of course this is all about ego and power, something that crops up in F1 rather frequently. But isn’t it a real shame that they can’t work together and, as in the old days, have both Group Lotus and Team Lotus working off each other, driving forward the Lotus name to become a global brand exemplifying fast cars, high performance and competition? Perhaps good sense will ultimately prevail and if they are able to work together maybe they’ll even have Ferrari worried.

The gap between McLaren and Mercedes is increasing

It looks as though McLaren are moving to accelerate their separation from Mercedes. Mercedes owned 40% of the Woking based team, but following on from Mercedes establishing their own F1 operation through the acquisition of Brawn at the end of 2009, it was announced that McLaren would buy back their shareholding. In a statement released by Reuters Martin Whitmarsh is quoted as saying that there is now only around 11% of the Mercedes stake remaining, which he described as an ‘insignificant’ number.

McLaren under Ron Dennis have long held ambitions to emulate Ferrari, their split with Mercedes allows them more freedom develop McLaren as a luxury brand – but let’s hope they don’t go into HiFi again. The interesting question is how their engine supply situation will develop. I wouldn’t be surprised if we see a McLaren engined McLaren on the grid when the new engine regulations come into play in 2013.

By the way this is Post 100, thanks for all the feedback and support, I’ll let you know when we get to 1000!

The Ferrari and Virgin brands have many similarities as well as some clear differences

You can tell a lot about a brand by its history and there is a fascinating contrast between new entrant Virgin and the team who were founded before F1 arrived in 1950 – Ferrari.

Both Ferrari and Virgin are global brands, both are inherently linked to a charismatic individual – Enzo Ferrari and Richard Branson – whose main focus in life has been to promote and stand up for the values of their brands. As is the case with Walt Disney, Henry Ford and even Steve Jobs, the individual and the brand are inseparable.

Both brands have strong national ties, Ferrari epitomise everything that is Italian, going back to the days when F1 cars were colour coded according to their home nation – the Ferrari red has therefore always been synonymous with Italy, it is their national F1 team and always will be. But beyond Italy the prancing horse is recognised globally to represent performance and aspiration, it is certainly more globally recognised than Formula 1 itself, particularly in North America. Similarly Virgin, although operating at a global level, have strong British, or specifically English, roots. Sir Richard Branson’s epic challenges in boats and balloons made him a national hero in the UK, he is portrayed as the archetypal British Entrepreneur, someone who could get things done and addresses problems in a practical no-nonsense way. When British Airways famously lost its way on branding and decided to remove the Union Jack from its tail fins, it was Virgin Atlantic who stepped in with the British flag featured on their new designs. When British building society Northern Rock got into trouble, Virgin were quickly on the scene with a proposed (and subsequently rejected) rescue bid.

But there are also some interesting differences. The Ferrari brand has always been linked to a very specific product range – luxury performance cars and motor racing, yes they have dabbled in merchandising perfumes, pens and laptops in a similar way to the brand leverage approach of Harley Davidson, and no doubt generate a reasonable return through licensing, but a Ferrari is a car, nothing less, nothing more. In contrast the raison d’être of the Virgin brand is to support new ventures and create innovative new business models. It is in effect branded venture capital. Virgin seek to make a return from using their brand to start up new concepts and then bring in new investors to take the business forward. They are not interested in stability or maturity, or any particular kind of product; they focus on dynamism and change. Whereas Ferrari epitmise tradition and stability (former Ferrari Technical Director Mauro Forghieri once told me that Ferrari had been slow to imitate ground effect aerodynamics as Enzo had refused to allow his cars to be fitted with ‘skirts’!), the Virgin brand has always worked best when up against the establishment. It is the cheeky newcomer which challenges the rules of the game and transforms an industry. Whether it’s taking on the big music retailers, the major record labels, transforming the concept of the recording studio, taking on British Airways in transatlantic air travel and the US airlines on the home territory, or even providing accessible space travel for the not-quite-so-mega rich. The Virgin brand works best when it has competition and it thrives on adversaries who are well established and the dominant player in their industry, in F1 this can only mean one team: Ferrari.

It therefore comes as little surprise to hear Sir Richard Branson responding to the comments made by Ferrari (see previous post) in traditional Virgin style; we may not be beating you today or even this year, but we will prove that we can be at least as good as you using a fraction of the budget and a different approach that will bring change to the industry over the next two or three years. Let battle commence.

Nico Rosberg - Will he be one of the losers from the return of Schumacher?

With the confirmation that Michael Schumacher will be returning to F1 in 2010, I wanted to start my 2010 blog by reflecting on the possible winners and losers from this amazing turn of events.

Winners:

Formula 1:  With four brand new teams, Button alongside Hamilton at McLaren and Alonso in a Ferrari, 2010 was already shaping up to be a classic F1 season. The return of Michael Schumacher adds another powerful ingredient to boost global interest in F1, it also revitalises interest in Germany which had been waning since his retirement. With the withdrawal of three car manufacturers in 2008/2009, new sponsors and investors are needed and this is the way to get them.

Mercedes: Having lost the number one on their first F1 car for over fifty years to McLaren, Mercedes have recaptured media interest and positive momentum behind their new team. Given the success of Brawn in 2009, they were unable to play the “we’re a new team playing ourselves in” card, and needed a big impact for their inaugural season, something they have now achieved in spades.

Rubens Barrichello: It is probably reasonable to speculate that had the management at Brawn realised that there was a real possibility of their losing Button to McLaren, they would have retained Rubens for 2010 to provide some continuity in the driver line up. If this had happened the revitalised Barrichello would have found himself, once again, playing the support role to Michael Schumacher, something that no competitive driver would want to do once, let alone twice in their career. As it turns out Rubens is now the undisputed lead driver at Williams, a position he has not enjoyed since his time at Stewart in the late nineties. So Rubens escaped being Michael’s number two for the second time and now finds himself lead driver with a team with an impressive pedigree and a real hunger to get back to the front of the grid.

Losers

Ferrari: Despite their dignified support for Michael’s return to F1, Ferrari must be deeply disappointed that they have lost their lifetime ambassador to their closest rival in terms of global luxury brands. It is clear that the Ferrari/Schumacher relationship will never be the same again, with Ferrari regarding Schumacher’s second career as something that is removed from his history at Ferrari. In a press briefing reported in Autosport.com President Luca di Montezemolo stated ‘What is important is that the real Michael was at Ferrari’. The irony of the situation is that it was Schumacher’s desire to help Ferrari following Filipe Massa’s accident that started the chain of events that led to his return.

Nico Rosberg: Nico has now moved from being the Number 1 at Williams to a clear number 2 at Mercedes. He would have been effectively in the same situation had Button remained, but the arrival of Michael to work with his old partner Ross Brawn and to renew his relationship with Mercedes will make Rosberg’s challenge of establishing himself as a potential champion increasingly difficult. Schumacher has a well earned reputation for requiring subservient team mates, and it will  be interesting to see how this works out during the season. Will we see a situation where Nico is there simply to support Michael at all costs, including making use of his more recent knowledge of cars and circuits? Or will the previous Brawn approach of letting the drivers race each other be maintained? Either way Nico has an uphill struggle to establish himself as more than a ‘good’ F1 driver.

Winner or Loser?

But what about Michael himself? Will he be a winner or loser? This is very much an open question. Schumacher’s first race win was in 1992 and he won a grand prix in every subsequent year up to his retirement in 2006. Therefore anything less than a race win in 2010 could be deemed as a failure, with expectations running so high it is hard to see how anything less than being a major contender for the championship would be acceptable to Michael. The 2009 Brawn car was very good, but they made the decision early in 2008 to focus on the 2009 car, in 2009 they were fighting for the championship right until the penultimate race – so it is unlikely that the 2010 car would have had the same level of commitment as early in the season. So there are many uncertainties and pressures involved in his return, at best he will be as good as he was, at worst it will become a personal and reputational nightmare. What is certain is that Michael is prepared to take on these risks in order to race again, roll on 2010.

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