V8 Supercars - Cost Cutting

[Peter Nightingale]

Now we have the powers to be looking at methods to rain-in the costs as they are getting out hand......

[tiko]

The costs of employees are probably the most expensive single item now. To be competitive in this catergory you have to build the best cars, which means make all the compoentry to the best standard which inturn means hiring the so called best people to complete all the work. HRT/HMS/TWRPG are rumoured to have over 70 staff. So from that 70 lets average the wage to 50k each, obviously people such as drivers and engineers get paid more but also apprentices and alike are paid considerably less. That 3.5 million dollars before the race meeting has even started! The areas for concern are that your fully qualified car mechanic is earning 10k+ on award wage. So a mechanic at your local dealer is on avg 30-40k per annum, at a v8 team their earning close to 60k. As the teams with more money need experienced staff they just poach other team staff and offer them more money, and sending the less fortunate teams into the cold looking for someone to work on less money than other teams! Add in driver wages, engineers wages, pr people wages and managers wages and your looking at 4-5million in wages, thats probably more money than any naming rights sponsor tips into a team! (other than GM and Ford)

[pete55]

Limiting the number of staff allowed to be employed would help reduce costs and so would allowing only X number of staff to attend the race meetings. Car building and repair costs also need to be reigned in.

[Razor]

I think a NRL style salary cap for the drivers. That will be a major talking point with V8SA and TEGA

[storyline]

Except you are then heading into territory that is outlawed by Australian law you can't say to a company that is part of your series 'You can only come play with us if you have no more than n employees'.

First question would be 'Define an employee'

If the answer if 'someone who works for you full time' then the good ones suddenly go onto part-time contract. Problem solved.

If they define them as 'anyone who works for you - full or part time' then you have massive problems because of all the temporary staff needed at actual race meetings.

Then of course, who is to say that another company can't emply these people for you on a contract of, say $1 (Hiya Skaifey!) a year to the contract company?

And then there is the laww - commonly known as the Trade Practices Act which would negate this type of force anyway.

[retro]

Did any one notice a couple of days ago Ford got a $50 million handout from Johnnie.

Wouldn't this very neatly pay for their v8 program.

[GTRMagic]

I find it funny that it is always the underperforming teams that bleat the loudest about cost containment and the need to reduce costs of running in the series.

Mr Rogers seems to have assumed Mr Larkham's role as chief spokesperson and Captain Complainer about costs if the interview on RPM was anything to go by.

The solution in salary capping can be breached. It is breached in the NRL by teams that get caught because they are sloppy, and teams that dont get caught because they have far more creative legal eagles creating the magic in the background

Putting a limit on the number of people allowed at a race meeting may be controllable.. you could say there are 10 people allowed per car, and therefore here are 10 AVESCO issued passes... except how do you account for teams like Tasman with 7 owners and a kazillion hangers on??

Or you build something like the HMS model where a group that isnt a signatory to the TEGA teams agreement can employ everyone the racing squad requires, and is funded externally... how do you legislate against an entity that may not be a party to the legal agreement governing your series?

Same goes for increased numbers of rounds... Mr Rogers complained that any more rounds would cost too much money, that his event income would need to increase to cover the costs.... is this really correct?

Is it really cheaper to run at the AGP than at say Winton? Sure its in the Melbourne metropolitan area... but you are paying your team anyway, so no extras there... you run the cars for a couple of hundred kilometres at the AGP, so no change there... the only pain is a hotel bill at the Benalla Hilton

The answer to cost control is far simpler than may be experienced. Control parts or control specification of parts is the way to go.

Motor manufacturers getting behind a single engine specification and developer and preparer would knock the hell out of budget costs. If HMS could put together a program where all teams running the Holden marque ran powerplants sourced from that entity... and the engines were in a pool, and a team could pick any powerplant from the pack... the cost of development in this area would fall dramatically.

Some teams have as many as 4 people in their engine shop to satisfy a 2 car team's requirements... these are not usually inexpensive employees... and on top of this is the development bits in flowing heads, new valve & spring systems, exhausts etc etc etc that just burn up money collectively.

If you have a single source of supply for powerplants, the parity argument for engines also goes away.. for they are all the same by marque.. and if anything is required, it can be done with better information than one team building a better engine...

Quite where that would put an outcast like WPS Racing may be something to get clarified...

[Just Do It!]

Originally Posted by retro

Did any one notice a couple of days ago Ford got a $50 million handout from Johnnie.

Wouldn't this very neatly pay for their v8 program.

Ummm, I think it's actually $100 million sovereigns over 10 years

[GTRMagic]

Originally Posted by retro

Did any one notice a couple of days ago Ford got a $50 million handout from Johnnie.

Wouldn't this very neatly pay for their v8 program.

Meantime Nero has his fiddle warming up while the fat lady ascends the soap box over at Tonsley Park, Adelaide...

The Federal Government used to do this stuff in the old days, by committing to buy a shedload of new Leylands/Fords/Holdens/Chryslers at a less than super discounted price... in that way the dollars still flowed to the carmaker, and the public need never know the fix was in....

[Just Do It!]

Originally Posted by GTRMagic

Putting a limit on the number of people allowed at a race meeting may be controllable.. you could say there are 10 people allowed per car, and therefore here are 10 AVESCO issued passes... except how do you account for teams like Tasman with 7 owners and a kazillion hangers on??

Anyone would think you were at Pukekohe, where not only was there a kazillion hanger-on Supercar, but also shareholder Boult's son (or perhaps it is shareholder Boult himself???) and hangers-on support crew for his races in the Mazda RX8.....ironically a name stolen off one Kieron Wills who created an RX8 15 years or so back.

Tasman was a hive of activity - but just one of many - as you rightly point out

[Peter Nightingale]

Originally Posted by retro

Did any one notice a couple of days ago Ford got a $50 million handout from Johnnie.

Wouldn't this very neatly pay for their v8 program.

The payout was for a program FORD australia completed for FORD INDIA on a new model program for the sub-continent, and for the largest TOOL-ROOM in AUSTRALIA, FORD-GEELONG......

[davester]

One simple step towards cost-cutting is to veto the "grouping" restrictions.
Teams who take advantage of sharing resources currently get slapped with testing restrictions through grouping.

Get rid of the scary grouping threats, and more small teams will either pool resources or join larger grouped entities. They will all save money, and reassure their sponsors by still being able to test and hence perform on a higher plane.

As far as common components go, well this will upset the equilibrium within the supply industry for only a small cost saving, and may drive some suppliers out of the sport. The largest cost as already mentioned is development staff, and the only cost saving way around this is by teams sharing these costs.

The devils advocate may also suggest (and I say this with the highest respect for all participants) that underfunded teams may need to get realistic about their ability to compete without management providing the right resources. Before we drag those succesful teams back to the bunch, maybe the question needs to be asked about whether the bunch need to first lift their game?

In all forms of motorsport there are always teams that perform consistently better than others. The English Football system of relegation is a great incentive for strugglers to keep pushing for improvement. Could be implemented here with best FV8SS team moving up with franchise being transferred at a VESA set price.

Oops, too many topics in one post. Better go and hibernate for a while.

[GTRMagic]

Originally Posted by davester

The devils advocate may also suggest (and I say this with the highest respect for all participants) that underfunded teams may need to get realistic about their ability to compete without management providing the right resources. Before we drag those succesful teams back to the bunch, maybe the question needs to be asked about whether the bunch need to first lift their game?

And the biggest noisemakers in the last two seasons have had 2 of the most underperforming teams in the series, in LMS & GRM.

Ultimately you cannot blame a team for sourcing a better budget, a better crew, a better driver, a better chassis, a better engine.... if these things are a direct function of a budget, then there will always be the haves and the have nots...

.. a function of motorsport since the dawn of time... or indeed in any business.

Get better or get out is the harsh way to put it

[retro]

Originally Posted by Peter Nightingale

The payout was for a program FORD australia completed for FORD INDIA on a new model program for the sub-continent, and for the largest TOOL-ROOM in AUSTRALIA, FORD-GEELONG......

Ok mate thanks for that when I heard it they said it was a Government grant.

eta....still very generous.

[mountainstar]

A salary cap for drivers would be a waste of time as there would always be ways around it to 'wash' the money. They tried it in the new DTM back in 2000 by limiting driver salaries to 150,000 pounds. Mercedes and Opel who had both signed off on the rule found ways around it and now the rule is gone.

I believe letting costs sort themselves out. If V8 technical rules remain stable then at some point diminishing returns will kick in if you are employing heaps of people. Remember in F1 how the FIA keeps changing technical rules constantly, so the teams are constantly developing. There will also be a limit as to how much commercial funding can be obtained and if that doesn't increase at the same rate as the costs, I can't see these guys running at a loss and giving up their helicopters and boats.

[RotorFan]

Originally Posted by Just Do It!

the Mazda RX8.....ironically a name stolen off one Kieron Wills who created an RX8 15 years or so back.

Well really its called the "RX-8" (the dash is important!) and since the RX-increment has been consistent with Mazda for close to four decades I'd say Wills stole it

Renault stole the "RX4" for their new car (I don't think theirs has a dash).

Originally Posted by davester

The devils advocate may also suggest (and I say this with the highest respect for all participants) that underfunded teams may need to get realistic about their ability to compete without management providing the right resources. Before we drag those succesful teams back to the bunch, maybe the question needs to be asked about whether the bunch need to first lift their game?

Absolutely. How many team managers have been seen to complain about costs anyway?

Originally Posted by mountainstar

I believe letting costs sort themselves out. If V8 technical rules remain stable then at some point diminishing returns will kick in if you are employing heaps of people. Remember in F1 how the FIA keeps changing technical rules constantly, so the teams are constantly developing. There will also be a limit as to how much commercial funding can be obtained and if that doesn't increase at the same rate as the costs, I can't see these guys running at a loss and giving up their helicopters and boats.

Hehe, well put! Thats what one helicopter owner had to say about it, too, as you probably know

[Peter Nightingale]

Originally Posted by RotorFan

Well really its called the "RX-8" (the dash is important!) and since the RX-increment has been consistent with Mazda for close to four decades I'd say Wills stole it

Renault stole the "RX4" for their new car (I don't think theirs has a dash).

Absolutely. How many team managers have been seen to complain about costs anyway?

Hehe, well put! Thats what one helicopter owner had to say about it, too, as you probably know

Since when has this thread changed to talking about RICE -BURNERS?????????

[Chucky]

Originally Posted by mountainstar

I believe letting costs sort themselves out. If V8 technical rules remain stable then at some point diminishing returns will kick in if you are employing heaps of people. Remember in F1 how the FIA keeps changing technical rules constantly, so the teams are constantly developing. There will also be a limit as to how much commercial funding can be obtained and if that doesn't increase at the same rate as the costs, I can't see these guys running at a loss and giving up their helicopters and boats.

Exactly. With every rule change comes additional costs of building and developing. If the rules stay stable for a period of time, then teams come to a point where throwing money at an area of development netts such small returns that it's just not worth it anymore.

[PVDA]

Originally Posted by GTRMagic

hotel bill at the Benalla Hilton

I wonder if Larry & his crew will still be having Saturday night dinner at the Royal Hotel in Benalla or go more up market now that he has a new team sponsor??

[Peter Nightingale]

Why they don't go to pooled engines , i will never know ????????????

[pete55]

If engines were obtained from one manufacturer for each Holden and Ford it would not necessarily produce cheaper racing. What would be needed in conjunction with that would be control shocks, brakes clutches and various other bits and pieces so that money could not be spent in areas that are so costly. I think it is time to introduce sequential gearboxes now too, although a bit dearer to start with should in the end reduce costs.

[Peter Nightingale]

Originally Posted by pete55

If engines were obtained from one manufacturer for each Holden and Ford it would not necessarily produce closer racing. What would be needed in conjunction with that would be control shocks, brakes clutches and various other bits and pieces so that money could not be spent in areas that are so costly. I think it is time to introduce sequential gearboxes now too, although a bit dearer to start with should in the end reduce costs.

We are not talking about closer racing ,what we are talking about is containing & raining in fixed costs so the teams are economically viable for their owners.....

[storyline]

The problem is that ideally, to cut costs overall, you need a pool of common elements - engines, gearboxes, suspension etc.

Sounds all very well and good - remove the high cost of devlopment from each team and move it to a centralised body.

But you have to leave something up to the teams to be able to play with to allow them to try and gain that little bit of superiority otherwise you end up with a silhoette forumla where over taking is impossible, everybody has exactly the same accelleration, braking, suspension etc .

Oh sorry - we nearly have that don;t we?

This works for NASCAR because they have ovals where this type of development then comes down to the drier being able to draught and use other cars to pass. Teh benefit behind all of this is that the ovals are, basically, all the same (yes sizes vary and angles may be slightly different, but not enough to worry them.

With V8's we have no two tracks alike therefore using a common formula isn't going to work because at Circuit A you need Package A, whereas at Circuit B you need something different.

[retro]

Larkham tried to do it....didn't work...move on.

[chavez]

Introduce $5.00 engine rule. Effectively curtails engine development.

Replace headlights and tail lights with decals.

Ban shock dynos

Ban car to pit telemetry (exception oil pressure, water temp)

Run only one race (of say 300km minimum) at each meeting.

Replace rear wings with steel blade spoilers.

Restrict the number of employees (or contractors or whatever) each team has at a race meeting.

If VESA were serious about reducing costs there is a lot they could do.