Why Panasonic ‘aint going nowhere

Jarno Trulli © J. Moy / Sutton

There’s been a lot of noise recently suggesting that Panasonic is set to switch allegiance from Toyota, which has pulled the plug on its F1 operation, to another F1 team, potentially linking up with Kamui Kobayashi who so impressed in his two F1 outings in 2009.

Japanese telecoms company KDDI has similarly been linked with remaining in F1, linking up with Panasonic and going where each other go.

Two big companies, it makes sense for them to want to hang around in F1 doesn’t it? Well no, I don’t think it does.

You see, both Panasonic and KDDI’s involvement with Toyota was on a B2B (business to business) basis. Panasonic and Toyota are long-term partners, with Panasonic producing the vast majority of Toyota’s hybrid batteries. KDDI, meanwhile, is 11% owned by Toyota.

So do I see them moving to another team? No I do not.

And, if my sources on the ground in Japan are to be believed, they have no intention of backing Kobayashi either. The Japanese economy and system of ultimate answerability to shareholders simply won’t allow them to financially support the kid, even if they wanted to. Despite its purchase of Sanyo making Panasonic Japan’s largest electronics corporation and a promising second quarter, a staggering first quarter loss over the past fiscal year is set to see Panasonic’s annual profits down by hundreds of millions of yen.

There seems no reason and no financial case for either Panasonic or KDDI to hang around after Toyota’s departure.

Vive la Revolution

The fallout over the FIA’s plans to introduce a £40 million budget cap in 2010 continues unabated today as Renault has become the latest team to announce its intentions to pull out of Formula 1 at the end of 2009, joining Toyota, Red Bull, Toro Rosso and Ferrari in its disillusion with the 2010 regulations.

But this is all just politicking, right? There’s no real danger that F1 2010 could be run without Renault, without Toyota… without Ferrari?

Those who assume so are quite wrong.

These are troubled times for the world of motorsport, and for the automotive world as a whole. Financial belts are being tightened the world over and Formula 1 can no longer continue at the levels of expenditure to which it has grown accustomed. So why has the notion of a budget cap caused such unrest? Part of the problem lies in the “two-tier” system of competition that the FIA has decided upon for 2010. But the greatest problem of all is the emergence of FOTA as a powerful force in F1 politics.

As far as the FIA is concerned, the tail is now wagging the dog and it is time that the normal order was restored. But just as the FIA moves to take its position of power back from the teams, so the teams themselves can now see the power that they hold as a united body. With both parties emboldened to stand their ground, we are facing a civil war between two factions who each know the power they hold and where neither one of them will be willing to show the slightest sign of weakness, nor give an inch in any potential negotiation.

Formula 1 last underwent a revolution back in the early 1980s, again a time of financial and political upheaval. The FISA/FOCA war as it was called almost 30 years ago gave us the system of governance we have today. It gave us a constitution, of sorts, under the Concorde Agreement. It gave us Max Mosley and Bernie Ecclestone as the power brokers and ultimate rulers of the sport.

Formula 1 today faces new dilemas and new issues, and the old Concorde Agreement is in dire need of rewriting. But as the FIA, Commercial Rights Holder and the teams stand their ground, there is no sign of a new constitution being written. Under increasing pressure from their boards, the car manufacturers have had to ask themselves if the sport is giving them fair reward for their services, and if they should stay involved. Over the past few days, Formula 1 has received its answer.

With just two weeks to go until the deadline for entries to the 2010 championship, Formula 1 finds itself at an impasse.

If the FIA buckles to the demands of the manufacturers, then the governing body of the sport will lose any semblance of authority.

If the manufacturers buckle, the FIA will be empowered to force through any regulation changes it sees fit in the future.

Thus the battle lines have been drawn. While FOTA President Luca di Montezemolo is set to meet FIA President Max Mosley next week, the result of the meeting will not resolve every issue that currently stands between the warring bodies. 

The threat of division in Formula 1 is very real indeed.

The FIA may have opened up three new spots on the 2010 F1 grid, but as things stand now, it has to face the very real possibility that it may struggle to fill even the ten that exist today.