4. Letter from America

I have known Butch Janes for more than 20 years, first as a business colleague, then a friend, and always as a F1 enthusiast, something of a rarity for a US citizen. I know it to be at least 20 years since our shared F1 interest was well established when we decided to attend Race 585 together. We were rewarded by witnessing JV’s maiden win: “Villeneuve given stern test by Schumacher at his home circuit” is the Race Pod headline.

Butch and family live in North Carolina (the home State of Haas F1) and we regularly correspond. He is a prolific writer. His thoughts flow through his fingers to the keyboard in a way I frankly envy. Anyway, I so enjoyed his highly speculative take on Melbourne, particularly with regard to the debut of Haas F1, that, with his permission, I thought I would share it:

“If one just read the final results, you might conclude “just more of the same”. Except P6? But there was a lot more going on, and except for Alonso’s shunt, a pretty interesting race.

 After a debacle from the “let’s fix what’s not broken department” in qualifying, the surprise was Ferrari’s start. It didn’t help that Hamilton didn’t have his revs up at the start. Huh? And it looked like he was having to push the front end of his car the whole race. Could they have missed the set up after all that testing and his strong qualifying?

All entertaining, nonetheless. And a very pleasing result for HAAS who didn’t fare well under the “fix what’s not broken department” rules on Saturday. I see Haas and Steiner were quick to praise the partnership with Ferrari as instrumental to this relative success. Contrast with Red Bull’s relationship with it’s technical partner. HAAS knows they need Ferrari. Ferrari knows it has a huge base of cost-sharing with HAAS. We’ll see how their partnership works out over a couple years.  

I watched a TV special about HAAS F-1 last week. Pretty much a simple PR piece, produced by non-racing types. Throughout the presentation, anything Ferrari had blurred-out images and little mention of the relationship. In their traveling garage set up, there’s a separate garage, closed, for all things Ferrari, and no pictures or mention of that. So it seems Ferrari has to protect it’s brand, logo, and such through a “chinese firewall” with HAAS. That’s not quite up to modern standards of a “partnership”. But there is so much to protect, particularly early in the season, and it does appear Ferrari has made some progress this winter with the power unit. And the bar keeps moving; David Hobbs (NBC Sports) mentioned that Mercedes is rumored to be producing 1000hp now. And after today, there might be another question; how much success will Ferrari allow HAAS to have? Or might that become a matter of “pricing”?

The HAAS F1 business remains a real curiosity to me. I see no other significant sponsorship, yet. I’ve noted before that I don’t think his automation business can support this venture long term at its current scale (The business has annual turnover in the order of $1 billion.). Haas has been publicly (in the US) inviting Roger Penske and Rick Hendrick to attend a F-1 race with him. Haas publicly is promoting the technology aspect to tweak their interests but I think there’s more there. How can Haas make this thing work financially? Penske knows F-1, and all other racing, so this is not news to him. Hendrick is without F-1 experience, but highly successful in Nascar racing and his businesses. The common characteristic is they both have very deep pockets. They both know how to make money with racing teams. And internationally, Penske already has relationships with many potential sponsors. And now, HAAS can show them a different business model for F-1. After Melbourne, he would have a pretty good story to make a sales pitch. Could it be that Haas is ready to sell a significant portion of HAAS F-1 for cash, take his profit, and sign HAAS automation on as the primary sponsor of the team, with Haas remaining as a major stockholder?

That’s the only thing that makes economic sense to me watching this from a distance. But it’s pure speculation. I’ve not seen any such suggestions in the media or press like this. The press seems to assume Haas can keep this team going on his own. Maybe they’re right.

At the least, the cost of sponsorship went up on Sunday with HAAS F-1 phones maybe receiving a few potential sponsor calls.

Anyway, I’m glad there’s two cars with the stars and stripes on them in F-1. And it doesn’t look like they’ll be back-markers.”