Behind Button and Hamilton’s winning formula

I want to write about something other than the FIA/FOTA war today. There will be plenty of that tomorrow.

It has been well reported that Lewis Hamilton and Jenson Button have exchanged fortunes from last season to this. Button has gone from the back of the grid to the front and Lewis the opposite way.

But there is a common factor in the success of both men and that is the Mercedes engine, which is made in Brixworth, about 20 minutes from Silverstone. Button visited the staff yesterday to say thank you for giving him an engine which has won six of the seven races so far and Hamilton dropped in today to say thanks for the KERS system, without which McLaren would be even further behind!

I also went there today to take a look around and to get a closer look at the only KERS system in F1 which is really working well.

Mercedes High Performance Engines is supplying three teams this year; McLaren, Brawn and Force India. Each team requires 16 engines for the season to cover the race weekends, eight per driver. It’s a far cry from the days when engines were unlimited and before they were homologated, but there is no less effort going on.

As you would expect the place is spotless, I’m tempted to say like a hospital but I’ve never seen a hospital as clean as this. We toured the machine shop and design office and went to the engine build area. There are two men in there who build the engines, using 3,000 components. It takes five days to build one engine and they check each other’s work. Quality control is the name of the game and they haven’t lost an engine yet in a race.

Of the eight engines each of Mercedes’ six drivers will use this season, roughly half of them have already been built. Engine planning is important this year, because you want to try to have a new engine for the real power tracks like Spa and Monza.

The most interesting part of the visit was looking at the KERS system which is the class of the field. The system is used only on the McLaren at the moment and weighs just 24 kilos. Of that the motor is 5 kilos, the converter pack is 3 kilos and the battery pack is 14 kilos. The rest is cabling. The cable, which connects the battery pack to the converter carries 700 volts, which is serious current to have running from one side of a car to another! There are several fail-safes to make sure that the driver doesn’t get electrocuted. The system is 70% efficient, in other words 70% of the energy harvested under braking is available to go back into the system as boost on the straights when the driver wants it. Another thing I had not realised is that Mercedes has the system primed so that it can be used out of the final corner going into a qualifying lap and then reset when the car crosses the start line and then used again immediately.

For Mercedes the whole KERS project has worked out pretty much exactly as the FIA intended it. The F1 division has innovated and come up with a system, which is being used on road cars. So amid the political chaos of the moment is an example of one manufacturer which has worked with an FIA initiative and got something positive out of it.

Despite its success with KERS, however, Mercedes supports FOTA’s position of getting rid of it for next season, to save costs. But it is not a waste for them, because in 2013 F1 will have a new engine, which will be based more on fuel efficiency, rather than capacity and all engineers agree that this engine will have to be based on the hybrid system.

The economic situation at the moment makes throwing cash at KERS difficult to justify but it will the standard in a few years time, with a system like the one Mercedes are running now at the heart of it.

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Car makers take a further hammering

Today’s Financial Times has some shocking information about the state of the motor industry. And as F1 is seen as an extension of that industry because of it’s reliance on, and domination by, the car companies, you need to know about this.

One story says that for most manufacturers, sales of new cars in the United States are down between 40-50%. That includes Toyota who have taken a 40% hit.

A little lower down on the page there’s a story from Tokyo about how Toyota is seeking a $2 billion bail out from the Japanese government. The company is facing its first net loss in 60 years.

Meanwhile the number of cars exported from Germany has halved. The bosses of BMW and Mercedes are arguing against government intervention in the car industry because they believe that it will lead to irrational consequences and the wrong businesses being propped up. They are talking about the mass market producers like Renault, which recently received a share of a £6 billion hand out from the French government. The BMW boss said, ‘If we go much further then there is a danger that we will have only one or two independent manufacturers and the rest will be state or semi-state owned. If governments did not get involved we would have a much stronger selection process. Because then only companies with high liquidity and no cash-burn would survive. Both BMW and Mercedes are in this position..

From Geneva comes word that one of Renault’s most senior managers has said that the company wants F1 to cost less and demands a fairer share of the commercial revenues and that if this is not forthcoming ‘there really are no taboos’ – ie Renault would be quite prepared to quit. This comes a day ahead of the Formula One Teams Association press conference where these subjects will be addressed. FOTA is engaged in discussions with Bernie Ecclestone about the commercial revenues from 2013 onwards, not the short term.

But there is a glimmer of hope for car makers in another FT story. Apparently the German government has stepped up the scrapping of old cars with an incentive scheme whereby owners of cars nine years old or more get a £2,500 subsidy against a new model. And as a result new car registrations of small cars in Germany have risen steeply. As you can imagine this too has upset the bosses of BMW and Mercedes, who have not seen any gain from the policy.

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Mercedes deny narrow vote story

There is a story doing the rounds on the websites at the moment, based on an article in a German magazine called Focus, to the effect that Mercedes’ continued participation in F1 was the subject of a recent vote by the board of parent company Daimler and that the vote only just carried, by three votes to two.

Sounds dramatic, another warning sign to F1 from the crumbling empire of motor manufacturing.

Except that it isn’t true. I rang Mercedes to find out more about this and it turns out that the story is completely bogus. “There was no voting by the Daimler board of management concerning F1,” I was told. “However it is true that we are staying in F1.”

Mercedes’ involvement in F1 has to be judged a success, in terms of how much bang they have got for their buck. They’ve won a lot of races and been ‘players’, up at the sharp end of the competition more often than not. They could and probably should have won more world championships with McLaren, but have been thwarted by a mixture of bad luck, some bad judgement and some big set-backs s like the death of engine builder Paul Morgan and the banning of aluminium beryllium, a key material in the manufacture of their engine blocks.

Unlike the other manufacturers in the sport, however, Mercedes do not own the team and therefore do not have the scale of overheads of a Toyota or a Honda. At the outset they were an engine supplier to McLaren. They converted that into a minority shareholding and then into a larger shareholding, 40% of the team, but still they are not the name above the door.

Mercedes have spent a lot of money in F1, make no mistake, but it was always their deliberate policy to be a partner, rather than an owner, to keep the costs down. The engine freeze will have brought down their share of the costs significantly. They have an impressive operation at Brixworth, which used to be called Ilmor. They make a significant contribution to the team budget and paid, for example, the €70 million development cost of the KERS system. But given the economic picture at the moment, it looks like the team structure they have with McLaren and the Bahraini investment fund is the right one to weather the storm. And the partnership with McLaren extends beyond F1, with the SLR road car and a new, cheaper model due to launch in a few years time.

There is big pressure from the boards of all the manufacturers in F1 to cut costs, but some are more desperate than others.

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