Goodyear cuts F1 financial support

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For many years F1 tyre supply has been a matter which most teams have taken for granted. There have been odd moments of uncertainty as to which team might run on which brand, but generally it has been assumed that there will always be a tyre company prepared to hand out tyres and technical assistance on a free-of-charge basis. Some of the better financed and competitive teams have also enjoyed the benefit of lucrative development contracts which not only make a worthwhile contribution to funds, but also ensure supply of the best rubber ahead of the less well-endowed teams.

However, things could be very different for 1987. In the wake of Pirelli’s decision to pull out of F1 following two costly, yet unproductive years with Brabham, Goodyear decided towards the end of November that it would no longer continue its direct financial involvement in Grand Prix racing. The Akron tyre and rubber giant’s decision was prompted by an attempt by a consortium led by Anglo-French entrepreneur Sir James Goldsmith to buy a controlling interest in its share capital.

Following a Congressional hearing on the matter in Washington, Goldsmith and his colleagues decided to abandon their attempt to wrest control of Goodyear when the company agreed to buy out their shares at a highly advantageous price. Informed commentators in the U.S. business scene estimate that the Goldsmith camp netted a profit of somewhere in the region of $200 million from the sale of those shares, but the cost to Goodyear of holding on to control of its own company seems likely to be in the region of $2.5 billion.

The plans for cutting financial commitments were made during the week or so of uncertainty about the company’s future, but Goodyear’s success in that area still means no change on the F1 front. At present Goodyear supplies tyres and technical assistance free of charge to Tyrrell, Arrows and Zakspeed and has development contracts with Ferrari, Williams, McLaren and Lotus.

Now Akron has decided to close down its British depot at Wolverhampton, making 11 staff there redundant, and there will also be some job losses amongst the engineers in Akron. Goodyear has stated that it is prepared to manufacture and sell (remember that word) a specification (or “control”) tyre in 1987, provided that both FISA and FOCA agree and make up their minds pretty promptly on the subject. Otherwise, they will negotiate a severance arrangement with the contracted teams and withdraw from F1 altogether.

With Pirelli unwilling to change its mind, Michelin not prepared to return and companies like Bridgestone, Yokohama and Avon only interested on a medium-to-longer term basis, Goodyear’s announcement must be taken seriously. As the Director of International Racing Leo Mehl said 18 months ago, “Racing is a tremendously worthwhile investment and we have got a lot out of it over the years. But it is only worth so much. There has take a bottom line to the expenditure.”

That bottom line now seems to have been drawn very clearly.