The F1 racing teams are in talks with the FIA about the increase in the pre-season regulation budget cap. The Russian war on Ukraine has resulted in the highest inflation in decades in several European countries. The rise in inflation has led to increased transportation and energy costs. So, the top F1 teams are struggling to stay within the budget cap of $140 million.
The budget cap was set before the Ukraine invasion, and Toto Wolff has claimed that F1 needs to provide an allowance to make up for the inflation. The big F1 outfits like Mercedes, Ferrari, Red Bull, and McLaren have requested a temporary adjustment in the cost cap to make up for the increase in freight and fuel costs. The bigger teams were forced to downsize when the cost cap was introduced. Now they are under threat of further downsizing if they have to stay within the budget limit.
On the other hand, the Haas team principal Guenther Steiner has advocated that any change or increase in the budget cap will massively affect the competition in the midfield. However, Steiner was willing to introduce a temporary allowance to cover the freight cost monitored by the FOM.
Wolff Assures Mercedes Have No Intention Of Ruling Smaller Teams Out By A Budget Increase
Toto Wolff pointed out that he would use the extra allowance to adjust the team staff\’s salaries to compensate for the rising inflation. The former Austrian racer told that Mercedes is not trying to generate more profit. Instead, they want to compensate peoples\’ salaries for the extraordinary inflation the employees are suffering from.
Toto further stated that the cost of everything is completely different from how things were last year. He hoped that the F1 fraternity could find a way to adjust. The Mercedes boss also mentioned that he had no interest in lifting the ceiling for the increase in cost cap. He does not intend to outmaneuver the initial concept of a budget. The cost cap allows smaller teams to spend the same money as bigger ones. However, Toto Wolff wants his people to be paid well in such tough circumstances.
Further, the Mercedes boss said that the smaller teams were in a stubborn position if they thought the bigger ones were trying to get an advantage. Wolff added, \”And we\’re going to screw them by not allowing them to do this and us on the other hand side seeking to lift the ceiling. Which we don\’t want to do.\”
Toto also suggested that F1 could avoid risking funneling extra budget over development by monitoring the teams\’ accounts to ensure the money is used to cover the energy and transportation costs, which have increased to around £8m. The fifty-year-old shared that energy costs in Brackley have risen from £2.5m to £6.5m. Meanwhile, the freight costs have bumped up from £2m to £6m. Wolff revealed that the adjustment would allow the Silver Arrows to pass some of the funds to increase wages.
The Austrian motorsport executive wants to avoid downsizing and restructuring once again just to be within the cost cap. He feels that it would be quite damaging for Mercedes as a team and for the industry. Toto Wolff reckoned that the cost cap was introduced to assist the smaller teams. There should be no bargaining to increase the budget every year. However, Toto feels that F1 should understand that the exceptional circumstances demand some financial support for the teams.