Covid-19 strains McLaren & Williams, but Renault stay committed
1200 McLaren employees will lose their jobs and Williams is now for sale. Meanwhile, Renault has issued a long-term commitment to Formula 1.
Renault’s proclamation of long-term Formula 1 involvement should’ve topped the news recently - instead, it was overshadowed by announcements from McLaren and Williams which suggest both may not survive the coronavirus pandemic.
On May 29, Williams F1, long known as one of Formula 1’s most vulnerable privateers, confirmed the team was for sale and they had terminated a primary sponsorship agreement with ROKiT.
Meanwhile, on May 26, it was confirmed 1200 people would lose their jobs at McLaren in a restructure. The cuts are being made across the entire company, not just the Formula 1 team.
In the weeks beforehand, Sky News confirmed McLaren was considering mortgaging the McLaren Technology Centre in Woking and its classic car collection in a bid to raise up to £275 million to balance the books.
Bundled together, this news from Williams and McLaren is the first indisputable sign some Formula 1 teams may not survive the financial squeeze of Covid-19.
The last time the sport was faced with similar financial woes, during the Global Financial Crisis, both Honda and Toyota ultimately pulled the plug on their Formula 1 involvement.
McLaren’s Team Principal, Zak Brown said in April he believed up to four teams may not survive the pandemic. Brown has also pushed to lower the cost cap to $100 million for 2021. The teams have since agreed to lower it to $145 million.
[Click here to read how McLaren pushed to lower the cost cap, while Ferrari threatened to quit].
The reprieve for the week for Formula 1, though, comes from Renault, with interim chief executive Clotilde Delbos confirming “we intend to stay in Formula 1”, according to MotorsportWeek.
Delbos, reportedly answering questions on a conference call, said Renault was encouraged by the recently-agreed budget cap, saying it would be “very good for us”.
However, Renault has still made significant cuts - confirming about 15,000 jobs would be lost worldwide.
The disparity between these newsworthy topics epitomises the modern-day issues with Formula 1.
McLaren and Williams, two of Formula 1’s longest-standing teams, are clearly at a far greater financial risk and may not survive, while the cash-strapped behemoth manufacturer can afford significantly more breathing room.
It’s a simple statement, but one that’s been put on full display in light of Covid-19.
When Williams announced their team was for sale, their statement summed it up, stating Formula 1 had, in recent times, been “very heavily weighted in favour of corporately-backed teams with comparatively large annual budgets”.