Carfiend wrote:It makes me wonder what these people saying the caps on headcount (RRA) would think if they were one of the many people now being made redundant from their jobs within formula one. Many of these people have families and dependants. Budget caps are a good idea to an extent but surely it is not legal for a group of companies to form a 'cartel' effectively to control each others business. The FIA could not do it to the teams due to EU Legislation so how can FOTA...
You are addressing a very serious issue there. FOTA and FOM have been setting up a cartel since 1981 to control
the business side of F1. In 2009 we had a recession as we had one in 2000 and in 1991.
The difference of
the 2009 recession to
the other two was it has not been painted over by huge growth of
the cartel revenues.
The 2000 recession was completely missed by F1's employment due to a concentration effect. Some teams went bust but their personnel was largely absorbed by
the biggest players who could expand their budgets rapidly due to
the influx of
the manufacturer money and
the additional money FOM made from
the spectators and tax payers.
Nevertheless
the crisis was realized by those who knew that a third of
the cartel revenues was coming from five large scale automotive manufacturers who all pumped $200-300 mil into F1. If a recession would hit those companies, one billion $ could go up
the chimney any minute.
And in 2008 exactly that started to happen. This time
the recession wasn't triggered by
the Dotcom and Telecom bubble blowing up but
the by
the globalization crisis and
the following loan crisis when
the US simply made
the world pay for their Asian imports. That recession hit F1 harder than anything before.
The teams could not compensate for
the loss of
the manufacturers and financial services sponsors.
The governing body managed to force
the cartel to accept new teams. That was
the only positive side because
the new teams absorbed some of
the personnel of
the bust manufacturers. Still
the cartel finally had to reduce cost to keep enough teams viable to stay in business with
the TV companies. Five or six teams would not have been accepted by
the viewers as a legitimate series.
The compromise that was found is still one which is going to bring down employment in F1 significantly.
So is
the present cost cutting really necessary and legal?
The necessity is quite obvious when you see that
the recession is more or less weathered but
the loss of sponsoring by
the manufacturers and
the banks has not been compensated. F1 failed to lure Aston Martin, Hyundai, TATA or VW into
the cartel because
the cost of competing successfully is still too high.
The question of
the legality of
the Concord agreement as a business cartel has never been examined by a European court because nobody wanted to upset
the apple cart. If a large group of unionized F1 or ex F1 employees brought this in front of a labor court all hell could brake loose. At
the moment this prospect is not very realistic as there is no such thing as an F1 union and individual workers with redundancy grieves do not have
the financial means to fight a law suit. So there you are.
There is no alternative to
the RRA and if by chance someone made a successful legal complaint against FOTA/FOM things would go from bad to worse for
the residual employees.
