Questions from the floor
(Joe Saward – Grand Prix Special
Three of the four of you are involved in Formula One to sell cars. At the moment there's a bit of a financial crisis around the world; what do you think the real impact of that will be on Formula One and as a secondary question, how do you feel about not being in North America at all, the world's biggest car market?
The second question first: obviously we are not happy about not being in North America. The US is the most important and biggest car market for BMW and I think for the industry as a whole. It has always been difficult to set foot into the US but Canada has always been a very strong Formula One supporter and the race in Montreal. I have seen the race in Montreal as an operational base to get a second race up and running in the US, and so we would, rather than drop the Canada race, use it or expand the operations in North America to have a Canadian plus at least one US race.
The other question? Financial crisis, economical crisis world-wide. Well, the answer is simple. Formula One is of this world and so Formula One will be affected as other industries are affected, as all the sponsors are affected. Basically every stakeholder in Formula One is affected and so we have to deal with it like any other operation.
I think we need to put things in context really. The first is if you look at some of the figures released for the British premier league in terms of teams' liquidity, the issues being faced by F1 teams are relatively minor. If you look at the advertising budgets of large corporations excluding car manufacturers, they are over $2-3bn a year, so I think one of the issues is to continue… because Formula One is so powerful and so strong, to actually work with the commercial rights holder to actually demonstrate the value of utilising Formula One as a marketing tool and I think we need to use more effort on that. Clearly as a car manufacturer we will come under pressure because a number of markets are depressed, others are fairly buoyant like Russia and China, but I think the strong companies who continue to invest in marketing, who continue to invest in technology, will become the winners. We should also look at the opportunity that this sort of situation presents, not only the pressure, so you can paint a very black picture or you can say there is a lot of upside here for Formula One and also for those well-managed Formula One teams and well-managed manufacturers. So yes, we will go through a hard time, I'm sure that we will all survive, we will probably come out with a strong sport.
Canada? We are sad because it's a great race, we like to go there. I think one of the targets of FOTA is to actually ask the commercial rights holder to really establish a strong foothold in North America, particularly the US, with a race which showcases Formula One well, and is, if you like, economically beneficial to Formula One as a whole. So I think this is one of the core discussions FOTA wishes to have because it is a very important market for our sponsors and for Formula One and hopefully in the next one to two years we can establish a proper race in the United States which is good for all of us.
On Canada, we are hugely disappointed – it's difficult to emphasise by how much. Honda is very successful in Canada, we make cars there, the local company there is hugely enthusiastic about Formula One. We have large numbers of guests from America and from Canada. We sponsor the event, we would like to see it back on the calendar as soon as possible and I support John's comments that I think it will be a major topic of conversation among the teams at the next meeting of the teams. I think we need to look at North America on a more strategic basis. As soon as we were down to one race on the continent, things inevitably were going to get difficult because the costs of transportation and appearing just once across the other side of the Atlantic were huge and I think really we need to look at how we're not just going to get back Canada but how we get back to America, potentially more than once, as it is such an important market.
On the other subject, I agree completely to the previous comments. The thing I would add is that we do need to work together as ten teams to make sure that the ten teams stick together, work together and survive. We've got a fantastically successful series, we've just come off the back of arguably one of the best weekends and we need to preserve that. Like Mario, I'm incredibly encouraged by the first round of meetings of FOTA but the first meetings are inevitably usually the easiest ones. It's when you get down to the nitty gritty it gets somewhat more difficult. There's a lot of diversity in the income and the levels of sponsorship, the parent company ownership of the teams. At one of the scale is probably a company like Honda or Toyota or BMW which are extremely successful in share price. Certainly Honda has done rather better or lost rather less than most of the others but we shouldn't be complacent and what we've got to do is to make sure that other teams which maybe aren't making money and do have sponsors that are hugely affected by the latest financial crisis do come through it and I think FOTA and the meetings with the FIA and with Bernie (Ecclestone) are the mechanism to try and make sure that happens. We really do have to pull together, we've got off to a good start but the difficult bit is yet to come.
(Ken Kawakita – Sportiva
Again, I would like to ask you about the recent economic crisis. The situation is very difficult to predict; how quickly do you have to react to this economic situation? You have been talking about cost-cutting and now it looks as if you've made a practical step but is the regulation about the long-term future quickly enough? Will you have to make a change a bit earlier than you expected?
We have heard right now that Formula One is a very strong operation and it's a big operation and it's very much technology-driven, so that means there is no need to panic, that's message number one. Message number two: you cannot change things of this technical complexity overnight, so we need to take a reasonable approach, an approach which satisfies all the needs including the need for all the teams involved to cut costs. On the other hand it has to be a viable route which means we cannot come up with a low cost engine within a few months. This would require huge additional expenses on the manufacturer side, so that means we have to look at a certain period of time and at a combination of measures which can lead us to the final target which is do-able in the short term and then prepare for the long-term future in a commercially viable way.