While the biggest-spending Formula 1 teams—namely Ferrari, Mercedes and Red Bull—are bracing for staff reductions as F1 enters a budget cap era in 2021, Ferrari team principal Mattia Binotto is hoping for a little pandemic relief to the plan.
F1 teams have agreed to a $145 million budget cap for 2021. That cap is a soft cap in that many expenses are not factored into the cap, including drivers marketing costs, driver salaries and the costs of the team’s three highest paid personnel. Still, the sports “Big Three” are believed to be spending more than $400 million annually on their programs.
Ferrari, according to Forbes, spends close to $570 million in Formula 1. Nearly $100 million of that is dedicated to staff, with the combined salaries of drivers Sebastian Vettel and Charles Leclerc accounting for nearly half of that figure.
Binotto knows that personnel cuts and reassignments back at the shop are coming. He just hopes he doesn’t have to make too many of those cuts during a pandemic.
Complicating things for Italy-based Ferrari is an Italian Pandemic Decree, which only allows layoffs in that country during the COVID-19 pandemic in the event that a company “permanently ceases operations through liquidation, declares bankruptcy without temporarily continuing operations, or enters inter a collective agreement with unions aimed at encouraging voluntary employee separations.”
“Knowing that the COVID situation, the fact that it has been very difficult to dismiss people, to lay off people in that period,” Binotto said on Friday in Bahrain. “Knowing that as well in terms of message, it would be completely wrong, I think, to lay off people when we are in such a COVID pandemic situation, and I think the fact that the pandemic is not finished and we still have now, let me say, an emergency matter.”
Binotto hopes that the FIA and Formula 1 at least takes another look at the budget cap in terms of personnel until the pandemic has subsided.
“The mechanism needs to be reviewed, and eventually we should try to postpone that mechanism, eventually by the end of the year,” Binotto said. “I think that, again, as social responsibility, it would be again, very bad to business people during the COVID, and knowing that we need to do it very soon, we don’t believe that would be the right approach—so it’s something on which I’m very keen and I would like and I will discuss with FIA to understand, and with the other teams, is there any possibility to accommodate what is still an emergency situation?
“That’s on one side. On the other side, as you said, how are we organizing ourselves. Obviously we were trying to restructure our whole team. We’ve got somehow…we are trying to reallocate people on the road cars because we are still a very big company. These are some opportunities we’ve got, but it’s a difficult exercise on which we have started. The solution is not obvious.”
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