Tuesday, July 31, 2007


Formula 1 Motor racing has not been a real sport for a long time, it is Big Business.

We’ve seen this in spades over the last couple of days with the spying altercation between Ferrari and Mercedes. Ferrari, the most successful Formula 1 manufacturer over the last few years, apparently discovered that one of their staff had passed detailed information about their 2007 car, together with their operating strategies and plans, to the Chief Designer of another major team, McLaren Mercedes. The decision of the World Motor Sport Council, (the sports’s Governing body) to “impose no penalty” on McLaren Mercedes, in spite of the fact that they found them “in breach of Article 151c of the International Sporting Code” has put the cat well and truly among the pigeons. This Article covers the area of "Any fraudulent conduct or any act prejudicial to the interests of any competition or to the interests of motor sport generally."

This story became public in late June, but there seems some doubt as to when it all started. It could well have been as early as March this year that secret Ferrari documents had been passed to McLaren’s chief Designer. It apparently only came to light when someone in a Photocopying shop became suspicious when a customer came in to copy some 780 pages of documents with Ferrari’s logos on it, and presumably “Secret” or Highly Confidential” blazened all over the documents.

The photocopying shop contacted Ferrari, and the rest is typical Formula 1 viperish history. Ferrari subsequently sacked Nigel Stepney, one of their engineers and took him to court, and McLaren Mercedes suspended their Chief Designer Mike Coughlan.

You can't help feeing that this is pretty important stuff. Bond style espionage (actually Bond would not have gone to a Woking Photocopier shop to get the papers copied!), mixed up with the two teams at the top of this year's World Championship. A Ruling Body that wants this year's tight challenge to continue down to the wire, and needs a legal battle to drown it all out about as much as it needs a hole in the head, and you have the stuff to write a decent thriller.

The sport’s governing body met on Thursday to consider the issue and made an interesting, and I think very sensible decision. It does however, leave several areas where you sit scratching your head, and asking all sorts of questions.

1 – What happened during the 9+ weeks (and Ferrari say it’s a lot more than 9+) that the 780 pages of information were in the possession of McLaren’s Chief Designer. Did he, clandestinely or otherwise, use the knowledge in the documents to further the cause of McLaren’s racing programme? And anyway, once you know something, how can you ever unlearn that knowledge in the future? Some argue this view is like saying It's alright to come into possession of some else's jewelery, as long as you don't wear it.

Some say there were others in McLaren who, at least, were aware that he was in possession of the documents, although they were not made privy to the contents. Others again say not.

2 – How did Ron Dennis, McLaren’s boss, on the day after he learnt of the issue, become totally convinced in such a short space of time, that none of the 750 or so McLaren employees had been exposed to the actual documents or the knowledge contained within them? Even accepting the speed that Motor racing moves as a business, that’s moving very, very quickly indeed. It does make you wonder just how comprehensive a review anyone could have carried out in that space of time.

3 – Honda’s Chief Executive, Nick Fry, reports immediately after (interestingly, not before) the disclosure of the document transfer that McLaren’s Chief Designer and Ferrari’s Nigel Stepney (the man charged by Ferrari with having passed the documents onto people outside the company) had met him in June to discuss the possibility of “investigating job opportunities within the Honda Racing F1 Team.” Honda’s statement records that Nick Fry informed Ferrari of this meeting but, interestingly again, does not specify when they advised them.

It is only circumstantial, but Honda’s performance this year in Formula 1 (and last year's if you look) can only be described as dire, and to date this year they have shown no signs of making any real improvement using the current design team. So, it would be understandable, some people are arguing, if those in charge were looking for some sweeping changes in the future. Rumours abound that the real purpose of the document transfer, could have been in this sort of direction, rather than McLaren. Will we ever know?

4 – The WMSC is, after all, the body tasked to look after the affairs of World Motor Sport, and is not an “independent” legal body like the House of Lords. Ferrari were not allowed to take any major part in the WMSC proceedings, although McLaren were given centre stage there. The decision to find McLaren guilty of breaking the all-important Rule 151c, but to avoid an immediate penalty, is not therefore particularly surprising. Apparently, with Ferrari not having a vote, the decision was unanimous. But don't forget, they are not a Court of Law - it seems to be more like "Physician, Heal Thyself."

5 - Perhaps this explains why Ferrari are conducting a parallel claim through the (possibly) more independent Italian Courts to prosecute Nigel Stepney, their ex-Chief Mechanic. They already have experience here, where a discovery in 2003 that that year’s Toyota Formula 1 Car bore a remarkable similarity to the previous year’s Ferrari, led to two of Ferrari’s employees being found guilty, in April this year, by the Italian courts (four years later, you will note), of industrial espionage. They were each sentenced to 16 and 9 months in prison.

6 - Toyota, like Honda, has invested hundreds of millions of pounds in Formula 1, and is a company with very high expectations of success. These hopes have, to date, have almost totally failed. Several other Toyota employees are still waiting to see if the German authorities, who were apparently awaiting the results of the Italian Court cases before proceeding, press further charges against them. Watch this space.

7 - Although Ferrari are “big boys” here, one can understand their position, feeling that it seems always to be them who are the victim. I suppose, if you build the best car, and have the best team organisation, which is the undoubted situation over the last 10 years or so, then it’s not surprising that you are the team which always seems to be on the receiving end. You just have to ask yourself if someone touting similar information on the Spyker team to Ferrari would draw much interest.

8 - But then, if you go back 10 years, when Ferrari were a bit of a joke in the F1 game, and look what happened, you see how they brought in people like Ross Brawn (from Benetton), Michael Schumacher (from Benetton), Jean Todt (from Peugeot), Rory Byrne (Benetton Chief designer), and over a 4 year period turned the Italian company into the supreme winning machine it has become since 2000. There is an argument here, not for overt (or covert) industrial espionage, but recognising that in terms of transfer of information and knowledge, “What goes around, comes around”. This whole business seems to be all about where you draw the line.

The neat sting in the tail of the WMSC decision, is the sentence in the decision - “But if it is found in the future that the Ferrari information has been used to the detriment of the championship, we reserve the right to invite (what a nice word!) Vodafone McLaren Mercedes back in front of the WMSC where it will face the possibility of exclusion from not only the 2007 championship but also the 2008 championship.”

I have simply no idea how you police that, but it will give quite a few lawyers a means to keep a lot of bread on their table at home, over the next few months. Let’s hope that the championship is decided on the racetrack, rather than relying on the courts trying to decide the legalities of all the new developments on the McLaren Mercedes after the last race of the season, and even into next year.

Anyway, at least this spat is a good deal more interesting than many of the races we’ve seen this year. Be thankful for small mercies.



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