Pirelli May Cut Off Caterham

[cosworth151]

F1 may start loosing teams sooner than we thought. The Dutch newspaper De Telegraaf says that Pirelli may cut off Caterham's supply of tires as soon as Suzuka. They claim that Pirelli is one of the main creditors of ailing team.

http://autoweek.com/article/formula-one/pirelli-losing-patience-caterham-formula-one-team

[Scott]

I would wonder if the myriad of contracts between FOM, the sponsors and the suppliers and promoters would even allow for that kind of no-payment penalty.  Not really a good marketing move to force a customer into bankruptcy in front of hundreds of millions of fans.

I don't know, has it ever happened before that an unpaid supplier has ever forced an F1 team off the grid in the middle of a season?  Seems rather harsh when F1 is all about marketing.

[cosworth151]

Isn't that what happened to Arrows on 2002?

Their sponsor, Orange, had a huge display at the USGP that year. The team didn't show up for the race. I got a LOT of Arrows gear at bargain basement prices. I even got was a Verstappen Arrows cap. Jos's successful lawsuit against the team was one of the things that finished them off.

[Scott]

No, I mean if a team is able and willing to show up and run the race, should another F1 supplier, in this case the tire supplier, be able to prevent that based on non-payment.  I would have thought there would be some process that ensures that doesn't happen.

Arrows went belly up thanks to Walkinshaw not paying everyone, but I think they voluntarily pulled out (even purposefully failed to qualify so they didn't have the expense of racing - again, something to do with their not reneging on a contract Arrows had with Bernie to show up) of F1.

[Jericoke]

No, I mean if a team is able and willing to show up and run the race, should another F1 supplier, in this case the tire supplier, be able to prevent that based on non-payment.  I would have thought there would be some process that ensures that doesn't happen.

Arrows went belly up thanks to Walkinshaw not paying everyone, but I think they voluntarily pulled out (even purposefully failed to qualify so they didn't have the expense of racing - again, something to do with their not reneging on a contract Arrows had with Bernie to show up) of F1.

Presumably Caterham has a long list of creditors.  I can't imagine they chose to stiff Pirelli and only Pirelli.  Pirelli is just the only one who's decided enough is enough.

I agree that it seems odd that Bernie never planned for this eventuality.  Perhaps he's willing to guarantee 10 teams, leaving Caterham on the outside?  Still, looks bad on F1 to lose a team, especially one that nominally represents the 'foreign markets' F1 is supposed to be expanding into.

[John S]

Seems this story about Caterham not getting tyres may be a bit of a hoax, now did someone at Pirelli jump the gun in briefings, or is it just the usual; a journo putting 2 & 2 together to make 5? 
However both Caterham and Pirelli have been quick to kill the story, - see the paras below taken from Master.motorspot.com today.

The Dutch newspaper De Telegraaf had claimed Pirelli, F1's official supplier, had warned the backmarker outfit that it urgently needed to make a payment for its 2014 tyre supply before receiving service at Suzuka.

"It (the report) is just stupid," team boss Manfredi Ravetto, who recently took over from the suddenly departed new chief Christijan Albers, told Italy's Omnicorse.

"We will have tyres at Suzuka as per normal," he insisted.

Pirelli also joined in the denials, with the Italian company's head of F1 communications Roberto Boccafogli saying: "Caterham will be supplied tyres to the end of the season.

"There are no problems," he insisted.

[Scott]

Presumably Caterham has a long list of creditors.  I can't imagine they chose to stiff Pirelli and only Pirelli.  Pirelli is just the only one who's decided enough is enough.

Seems the story had no traction anyway, but just to follow up Jeri, I am obviously having trouble making my point.  Pirelli is the only supplier who can prevent them from actually showing up and racing (I guess whoever Caterham uses for fuel would also have something to hold them up as well, but I can't see them not being able to even pay their gas bill).  That is the point I'm trying to make...that Bernie and everyone should have something written into all their contracts that doesn't allow that kind of thing to happen, mainly because it would give a supplier way too much power.  They could hold the entire grid for ransom if they felt the need to, and I know Bernie doesn't much like the idea of anyone else having more power than him...so I'm trying to suggest that this kind of thing could not happen in season.

[John S]

I reckon the engine supplier or probably even the mandatory control unit supplier - McLaren - could prevent them racing once their bill has gone unpaid for too long. 

Yeah I know the bad press for the big guys shutting out the small guys weighs heavy which is why it's very much the very last resort, but sometimes drastic measures are all that some debtor firms/teams respond to.

We have to remember that these teams signed up to F1, if they haven't got the funds to finish a season it's hardly the suppliers fault. - Although in Renault's case some would argue that this year's engine is a large contributory factor in lack of performance and hence viability of one or two teams on the grid. 

 

 

[Dare]

If their not paying their bills it's hard to feel sorry
for them.If nobody paid for their tires,gas,brakes,or
other parts suppliers how are they supposed to stay
in business.

[Jericoke]

Presumably Caterham has a long list of creditors.  I can't imagine they chose to stiff Pirelli and only Pirelli.  Pirelli is just the only one who's decided enough is enough.

Seems the story had no traction anyway, but just to follow up Jeri, I am obviously having trouble making my point.  Pirelli is the only supplier who can prevent them from actually showing up and racing (I guess whoever Caterham uses for fuel would also have something to hold them up as well, but I can't see them not being able to even pay their gas bill).  That is the point I'm trying to make...that Bernie and everyone should have something written into all their contracts that doesn't allow that kind of thing to happen, mainly because it would give a supplier way too much power.  They could hold the entire grid for ransom if they felt the need to, and I know Bernie doesn't much like the idea of anyone else having more power than him...so I'm trying to suggest that this kind of thing could not happen in season.

Sorry, I did address your point, even if I didn't seem to get it.

I was figuring that Bernie would guarantee 10 teams to Pirelli, thus with 11 teams, the first team to miss a payment would be in trouble, but the second team would be covered.  (Isn't FOM's contract with tracks to supply 18 race cars?  Or is it 20?)

I'm glad to hear the discussion is hypothetical though.

[cosworth151]

My thinking was along those lines. I could see Bernie using this as a way to squeeze the smaller teams out. He's never liked them.

[Ian]

Bernie needs to remember that without the smaller teams he could be cutting off the supply of future drivers.

[Scott]

I don't think Bernie liked the little teams when he had billionaires waiting in line to buy or build teams...I don't think it's like that anymore.  Bernie needs every team he can get.  If Caterham go, maybe Marussia is next and people are saying Sauber is on thin ice.  That might make it difficult to keep things within contract terms next year.

[John S]

I don't think Bernie liked the little teams when he had billionaires waiting in line to buy or build teams...I don't think it's like that anymore.  Bernie needs every team he can get.  If Caterham go, maybe Marussia is next and people are saying Sauber is on thin ice.  That might make it difficult to keep things within contract terms next year.

I don't read the situation like that at all Scott. Bernie has been saying for a long time he prefers more cars on the grid that can compete at the front and that can only really mean some of the top teams running 3 cars. Bernie shows his contempt for the current back marker cars by starving them of TV airtime, the main thing that might generate more money for them by attracting sponsors.

The proposed budget cap that drew in new teams like Caterham/Lotus, Marussia/Manor and HRT/Hispania/Campos Meta 1 was instigated by the FIA, who are responsible for sorting out the entries for F1. Bernie may have had a hand in choosing suitable entrants from among the applicants, but the present poorly resourced are not just an accident of the Global crash.

Bernie's obligation under his 100 year agreement with the FIA is a field of not less than 20 cars to race at each round of the F1 championship. He can achieve this with standard two car teams, or some 2 alongside others as 3 car teams.

Ferrari with their special funding arrangement under the Concorde have too much to lose by not fielding a third car if asked, similarly Frank Williams will always back Bernie when he's in a corner - Bernie once saved Franks team by getting finances injected into the Williams pot at the right time no questions asked. Frank trusts Bernie to see any extra costs in the 3 car scenario will be underwritten.

Once Ferrari and Williams sign up for 3 cars apiece how long do we expect McLaren or Red Bull to hold out?  Mercedes may be a different matter but with at least 4 teams almost certain to tow the line Bernie will have the last laugh.

[Scott]

Based on the this season and last, I would say that the back markers have been getting at least as much TV time as the lead car(s).  How many times have we seen the great racing between 3-15th place well televised while the cameras all but ignore the car running in the front, only to change over to the Merc or RBR for the last lap or so to the checker?  I don't think even Caterham will complain about TV time the way things are.

I also don't know about the relationship Frank has with Bernie, but wonder if it extends to Claire automatically.  If more than one team drops out before next season begins, at least two teams would have to put together 3 car teams.  Ferrari has just changed leadership rather drastically, and they may not be all that interested in doing just whatever Bernie tells them to, especially if they can't do it more profitably.  Should they show up with THREE crap cars next season instead of 2?  That would do wonders for their brand.  Do you think Alonso would be the least bit interested in having a third c*ck in the henhouse?

By that, I don't think it is a given, as you suggest, that 4 teams would be fielding 3 car teams.  It is too drastic an event to not include the opinions of all the signatories of the Concorde Agreement, and I am not sure the remaining teams would be all that keen on having the 4 biggest teams field 3 car teams unless there was also something extra in it for them.  ...not to mention sorting out the points structure with 3 car teams.