Interesting Item on New Chassis in Indy Star (Merged)

[bjohnsonsmith]

Originally Posted by JagtechOhio

Here's the new Honda 2.8L V6 twin turbo. This engine exists, Ryan Briscoe wrote that he had seen it on the dyno about a month ago. At first I thought the new IRL engine would be similar...maybe, maybe not.

http://www.autoblog.com/2010/06/11/h...cars/#comments

By ACO/ ALMS regulation, this engine is based on a stock block. I didn't see that mention in the IRL announcement for their 2.4L spec.

And it's a twin turbo (the side you can't see is identical to the side view). I don't recall the IRL mentioning the term "twin" in their descripton. If anybody can sort these points out, please do.

So we could see this same engine de-bored and/or de-stroked down to 2.4L, or something completely different. The IRL engine might be a proprietary racing block, and the decision to make it a stressed member has been stressed by Berkman of Honda. That's the "expensive jewel of a racing engine" that Berkman described some months ago.. .

Interesting. There's a rumour that Mercedes might be the major engine supplier to F1. The current spec is 2.4L aspirated.

So do Honda have aspirations to go back to F1 as an engine supplier, without turbos?

Equally could we see a return of Mercedes to IndyCar, with turbos?

[JagtechOhio]

No Idea.

honda: Pull out of F1, build a new motor for ACO, a new derivative of it for IRL, then another version sans turbo and go back to F1 ? Sounds bizzare to me.

Mercedes or anybody else...Menard said he spent $50M on the Buick V6 turbo program. I don't know if you could do it for half of that now, or why you would do it for the IRL. No bang for the buck.

[bjohnsonsmith]

Originally Posted by JagtechOhio

No Idea.

honda: Pull out of F1, build a new motor for ACO, a new derivative of it for IRL, then another version sans turbo and go back to F1 ? Sounds bizzare to me.

Mercedes or anybody else...Menard said he spent $50M on the Buick V6 turbo program. I don't know if you could do it for half of that now, or why you would do it for the IRL. No bang for the buck.

I did say it was a rumour. You watching Le Mans?

[JagtechOhio]

No coverage, but OMG...

I just read somebody say the RSR Jag ran 5 laps and puked. Fine freakin' laps at Le Mans???????

Headed over to sportcars forum to see what's up.

[JagtechOhio]

Back on the subject of the Delta Wing and its investors, here's a bit from an interview with Bowlby from Indy:

DN [interviewer]: Is there a Plan B if you don't get the deal?

BB: "Obviously first refusal and the whole reason that Chip and other team owners have put resources into the project is that it's for the IndyCar series. That's what it is all about. "

That scentence is a little confusing to me. "First refusal" means that if IRL says no, that doesn't mean the end of the project, right?

[JagtechOhio]

Here's the interview. Leave a comment there if you wish, I enjoyed the priviledge.

http://www.popoffvalve.com/2010/6/13...wing-interview

[JagtechOhio]

This article confirms that there may be little or no relationship between the new Honda 2.8 and the proposed 2.4 for the IRL:

http://www.motorsport.com/news/artic...FS=ALMS-LEMANS

[djb]

was away watching LeMans and the Canadian GP at a friends out of town. Glad to get garner a few chuckles with the joke.

as always, am interested following this thread just to try to keep up with the news of all the business/politics behind the changes of the future. And on the Lemans topic, if you can ever go, its worth it just for all the diff engine sounds, really fantastic the range of them.

[JagtechOhio]

bjohn, it just occurred to me that Lola may have a problem. They plan on manufacturing the monocoques and other large components in England for exportation.

In Feb 2010 when the proposals were announced, the Euro was worth $1.39. Now it's $1.21, and expected to continue to devaluate.

If the IRL is mandating a fixed low cost that provides a relatively low profit margin, Lola just lost 15% on the profit of components they intended to produce domestically.

Is there a point where they might look at the bottom line and say "forget it"?

That also motivates Dallara to move their manufacturing to the U.S., provided they can finance the relocation with U.S. investment funds. And move as much of their manufacturing as they can, the sooner the better.

Big money is something I know very little about. I do realize the exchange rate fluctuates greatly over time, but we're talking about a 1-2 year projection. Anybody have any thoughts?

[awrb]

Originally Posted by JagtechOhio

In Feb 2010 when the proposals were announced, the Euro was worth $1.39. Now it's $1.21, and expected to continue to devaluate.

If the IRL is mandating a fixed low cost that provides a relatively low profit margin, Lola just lost 15% on the profit of components they intended to produce domestically.

Is there a point where they might look at the bottom line and say "forget it"?

Lola is based in the UK though, and we use the pound, which isn't doing quite as badly.

[JagtechOhio]

Cheers mate, I'll double check the math.

$1.60 down to $1.45.

10% discount.

Not a good trend, if you have to lock in a contract price and watch the margin evaporate as the trend continues.

[bjohnsonsmith]

Originally Posted by JagtechOhio

Cheers mate, I'll double check the math.

$1.60 down to $1.45.

10% discount.

Not a good trend, if you have to lock in a contract price and watch the margin evaporate as the trend continues.

The new British government are purposely keeping the pound down to drive up exports; there is a massive deficit here in the UK, no thanks to the previous lot. However, I believe the US government wants a weaker dollar for exactly the same reason, so that will prove interesting and certainly won't help the Euro and the mess the Eurozone is in; Dallara better get that factory sorted out asap as the Italian economy is in nearly as bad a shape as Greece.

As far as Lola are concerned, I thought they were looking to setup an assembly facility in the US?

[JagtechOhio]

Thanks for your insight, there is a lot for me to learn on the subject.

It reads like we are in agreement about Dallara, however.

As for Lola, quoting Steve Charsley of Lola North America:

"The next item is affordability. Because of the economic climate we have to work to a budget and that means it still has to be a single-make series. We would love to have two or three manufacturers out there but that would escalate costs. It would be great for competition and great for us. We'd love it, but if they want to keep to a budget it's not going to work."

Lola Managing Director Robin Brundle:

"The safety-related design work will be done at Huntingdon in England because that's where our technical facility is located," Brundle added. "Things like the safety cell and crash structures will be designed and manufactured in the UK initially. The first two or three cars will also be built in the UK and we will then go into the American process."

Now that I read this again, I might have stepped on my d*ck. I was under the impression that much of the component manufacturing and assembly was slated for the U.S., not all of it. Looks like I got that wrong.

[bjohnsonsmith]

Originally Posted by JagtechOhio

Thanks for your insight, there is a lot for me to learn on the subject.

It reads like we are in agreement about Dallara, however.

As for Lola, quoting Steve Charsley of Lola North America:

"The next item is affordability. Because of the economic climate we have to work to a budget and that means it still has to be a single-make series. We would love to have two or three manufacturers out there but that would escalate costs. It would be great for competition and great for us. We'd love it, but if they want to keep to a budget it's not going to work."

Lola Managing Director Robin Brundle:

"The safety-related design work will be done at Huntingdon in England because that's where our technical facility is located," Brundle added. "Things like the safety cell and crash structures will be designed and manufactured in the UK initially. The first two or three cars will also be built in the UK and we will then go into the American process."

Now that I read this again, I might have stepped on my d*ck. I was under the impression that much of the component manufacturing and assembly was slated for the U.S., not all of it. Looks like I got that wrong.

The way I read the section on safety-related design work, is as they say. Initially it will all be done in the UK. Then after they've built and done all the relevant tests with the first 2 or 3 cars in the UK, then the manufacturing process is taken over by their facility in the US.

Unfortunately Steve Charsley is right but I hope ICONIC have enough forsight to allow other manufacturers to get involved, when and if the economic climate improves.

As for Dallara, their most pressing problem will be the Eurozone. I said in the previous post the Italian economy is in not much better shape than Greece but Spain, Portugal and Ireland are all in equally bad shape, with massive debts. If another situation like that in Greece were to arise, in one of those other countries, I don't think France and definitely not Germany would be able to rush in and bail them out.

Another thing, with a weak Euro, it's going to cost Dallara more to setup their factory in the US. Combine that with the potential of another Greek type situation occuring and their could be a part built factory or none at all.

[climb]

Originally Posted by JagtechOhio

Cheers mate, I'll double check the math.

$1.60 down to $1.45.

10% discount.

Not a good trend, if you have to lock in a contract price and watch the margin evaporate as the trend continues.

On the contrary, mate!

If the dollar get stronger, sales become more profitable!

[climb]

Originally Posted by bjohnsonsmith

...
As for Dallara, their most pressing problem will be the Eurozone. I said in the previous post the Italian economy is in not much better shape than Greece but Spain, Portugal and Ireland are all in equally bad shape, with massive debts. If another situation like that in Greece were to arise, in one of those other countries, I don't think France and definitely not Germany would be able to rush in and bail them out.

Another thing, with a weak Euro, it's going to cost Dallara more to setup their factory in the US. Combine that with the potential of another Greek type situation occuring and their could be a part built factory or none at all.

What has the Greek problem to do with a single company?

In a financially weak country there can always be healthy companies; Dallara may have their own money to invest despite the general trend.

The main problem could be about coordinating activities from different outfits, but it's true for virtually every entrant; even Swift, whose production is currently based in California, and will have to be displaced to Indiana

[climb]

Originally Posted by JagtechOhio

...
Now that I read this again, I might have stepped on my d*ck. I was under the impression that much of the component manufacturing and assembly was slated for the U.S., not all of it. Looks like I got that wrong.

You also have to consider the time factor: cars will have to be designed, produced and assembled by dec 2010; which means that no entrant will have the time to set up a new factory (lease land, buildins, hire people, organize a business unit) and be able to produce them in Indiana.
It would demand one more year to say the least

[bjohnsonsmith]

Originally Posted by climb

What has the Greek problem to do with a single company?

In a financially weak country there can always be healthy companies; Dallara may have their own money to invest despite the general trend.

The main problem could be about coordinating activities from different outfits, but it's true for virtually every entrant; even Swift, whose production is currently based in California, and will have to be displaced to Indiana

I was using Greece's economy to highlight the problems within the Eurozone; what happened to Greece's economy has affected all countries in the Eurozone and the value of the Euro and there are several other countries with the same predicament; the Eurozone can't afford another Greek situation.

Dallara may well be healthy, but any future investment they make won't be helped by a weak Euro; everything will cost more.

[JagtechOhio]

I think I mistakenly unopened a can of worms that doesn't matter. So long as the financial health of Lola or Dallara is intact, no problem.

[bjohnsonsmith]

Originally Posted by JagtechOhio

I think I mistakenly unopened a can of worms that doesn't matter. So long as the financial health of Lola or Dallara is intact, no problem.

No, I don't think you have. This has brought an aspect to racing that's much overlooked.

[Flyin Ryan]

Originally Posted by JagtechOhio

Cheers mate, I'll double check the math.

$1.60 down to $1.45.

10% discount.

Not a good trend, if you have to lock in a contract price and watch the margin evaporate as the trend continues.

Just part of the exporting business. It happened for every major manufacturer and supplier in the world over the past few years once this recession kicked in. If you think that euro movement is bad, go read up on what happened to the Korean and Japanese manufacturers in 2008.

I know one racecar constructor based in Europe took out currency insurance to cover any change in currency for cars sold in the U.S. over a set period of time. Safe to say that bore out to be a savvy business manuever. Don't know how routine that is but I think some others would be doing it as well.

bjohnsonsmith:As for Dallara, their most pressing problem will be the Eurozone. I said in the previous post the Italian economy is in not much better shape than Greece but Spain, Portugal and Ireland are all in equally bad shape, with massive debts. If another situation like that in Greece were to arise, in one of those other countries, I don't think France and definitely not Germany would be able to rush in and bail them out.

Just take my word on this. If not, go read this guy: http://eurowatch.blogspot.com/2010/0...ng-things.html or any other number of financial bloggers. The Italian economy might not be in great shape, but it's closer to Britain's financial position than it is to Greece's. The Italians have a lot of debt but the one item in their favor is it's mostly domestically held and they're nowhere near being far and away screwed like the Greeks were, so Dallara is going to have little to fear from domestic economic collapse which is a minor prospect on the horizon at the current (the one bright side of the Greek crisis is it scared everyone; and even in that case the bailout was not to make the Greeks whole or improve their society but to give them the money to pay off their creditors which were...French and German banks) and the Spanish and Portuguese to name two would go down first. The Irish will be fine because they recognized the problem and took care of it even though it was a painful bullet to swallow. The Spanish...it's an open subject. As for the broader European economy, well, if it declines, it's declining for everyone, which would mean all racing companies and all racing industry would suffer.

[JagtechOhio]

If an overseas company can borrow relatively low interest dollars to build manufacturing facilities here, I guess it would make a lot more sense than waiting to play victim to the exchange rate.

I just tried to look them up, apparently Lola and Dallara are private companies not listed on European stock exchanges. Is there another way to get financial data?

Ryan, I see you added some expertise while I was writing. Thank you.
Your first paragraph supports the reasoning for foreign manufacturers to build U.S. facilities, right?

[Flyin Ryan]

Originally Posted by JagtechOhio

I just tried to look them up, apparently Lola and Dallara are private companies not listed on European stock exchanges. Is there another way to get financial data?

know someone that works for them and ask

this kind of information is not going to be made public

Your first paragraph supports the reasoning for foreign manufacturers to build U.S. facilities, right?

Depends on the business and where you think it stands in the future 5 years, 10 years down the road. You can't read too much into short-term variations in currencies. It's a very volatile game.

[JagtechOhio]

Well that all is pretty obvious, but at least Lola and Dallara have some faith for the long-term prospects of IndyCar.

[bjohnsonsmith]

Originally Posted by Flyin Ryan

Just take my word on this. If not, go read this guy:http://eurowatch.blogspot.com/2010/0...ng-things.html or any other number of financial bloggers. The Italian economy might not be in great shape, but it's closer to Britain's financial position than it is to Greece's. The Italians have a lot of debt but the one item in their favor is it's mostly domestically held and they're nowhere near being far and away screwed like the Greeks were, so Dallara is going to have little to fear from domestic economic collapse which is a minor prospect on the horizon at the current (the one bright side of the Greek crisis is it scared everyone; and even in that case the bailout was not to make the Greeks whole or improve their society but to give them the money to pay off their creditors which were...French and German banks) and the Spanish and Portuguese to name two would go down first. The Irish will be fine because they recognized the problem and took care of it even though it was a painful bullet to swallow. The Spanish...it's an open subject. As for the broader European economy, well, if it declines, it's declining for everyone, which would mean all racing companies and all racing industry would suffer.

The problem with the Italian economy is, it's tied to the Euro, Britain's isn't, it still uses the pound.

Dallara has a lot to fear. If there is another crisis like the Greek one in the Eurozone, there will be a run on the Euro, which will be catastrophic and neither France nor Germany will be in a position to afford to bail out yet another country; they too have debts and have just come out of recession. Also there was a lot of internal opposition to the Greek bailout in Germany. As for Italy's debt being only domestic, they are financing their economy/debt through further borrowing.

I don't think you realise how bad it is in Europe.


To Jag and for your information:
As for finding out financial data on Lola, that information is public and can be found out in the UK, through http://www.companieshouse.gov.uk/, but I think you need to subscribe. As for Eurozone companies I couldn't tell you; you'll probably have to wade through endless red tape to find it.