Some 55 years after it withdrew from Grand Prix racing Mercedes-Benz will be back under its own name and running with a pure ‘Silver Arrows’ livery in 2010.
After a false start with Sauber and 14 rocky years of marriage with McLaren, the purchase of 75.1 per cent of Brawn GP will allow the company to run its own show, albeit with Ross Brawn and his existing management team overseeing day-to-day operations.
The Mercedes decision was a rare piece of positive news for a sport which over the past 12 months has been rocked by the withdrawals of Honda, BMW and Toyota. In light of those decisions the Mercedes move may seem out of step, but the company insists that ultimately it will be better off financially than it was under its previous arrangement with McLaren, a claim that may have reassured shareholders.
Indeed Daimler CEO Dr Dieter Zetsche said that within two years it will be spending a quarter of its current budget, and that Mercedes GP will become self-financing. Thanks to agreed ‘resource restrictions’ budgets will fall, while commercial revenues from Formula One Management are going up. All sponsorship income will go directly into the team’s pot, whereas previously it was absorbed by the McLaren Group.
The purchase may prove to be a relative bargain. Existing McLaren Group shareholders have agreed to reclaim Daimler’s 40 per cent holding over the next two years, and that will probably prove to have been a good investment. Daimler is only buying 45.1 per cent of Brawn with its own funds, and it is likely to be spending a lot less than it will receive. The remaining 30 per cent will be paid for by Aabar Investments, the Abu Dhabi government-backed group that owns a chunk of Daimler.
Zetsche sees the Silver Arrows team as providing “an excellent platform around the globe in many new and emerging markets, with the shining star in front”.
The reasons for the divorce from McLaren are complex, but Zetsche concedes that McLaren Automotive’s road car ambitions are the major concern. It is known that the recent scandals did not sit well with Stuttgart, but the bottom line is that Mercedes was never fully in control of its own destiny. Now it can claim all the glory, but equally it has nowhere to hide.
McLaren will continue to use Mercedes engines until 2015. It remains to be seen how cordial the relationship will be, and it is not clear whether the team has the option to make an alternative choice. A new engine formula is due in 2013.
Intriguingly McLaren Automotive will be ‘spun out’ of the rest of the company, which will allow the race team and road car business to have different shareholder groupings as the Mercedes stock is reassigned.
Perhaps the real winners are Brawn, Nick Fry and the three other former Honda F1 team directors who leveraged the management buyout in 2008. Even after the lucrative sale they have retained a 24.9 per cent shareholding – an extraordinary windfall. Adam Cooper
• Ross Brawn interview, p44
• Mercedes ‘Silver Arrow’ sports car, p74