How McLaren’s Goodwill Led To Red Bull's Modern Domination | Chain Reaction

This is Ron Dennis and Martin Whitmarsh. Together they presided over an incredible run of success at McLaren over multiple decades, first with Honda and then later with Mercedes. But when Dennis departed as team principal at the same time as Honda withdrew from the sport, one key, compassionate decision by the incumbent team principal Whitmarsh began a chain reaction that returned Honda, in the back of a Red Bull, to the top tier of Formula One once again. A great day for Honda. Although Honda had been a works engine manufacturer for several years with the BAR team, they entered 2008, their third season as a full factory team, with new leadership. Incoming as team principal was Ross Braun, a talented designer and technical director, a leader of men with a huge reputation, whose Jaguar sports cars and Benetton and Ferrari F1 cars had won world championships and dominated Formula One. I have a plan over the next year or two to work with the people here and put together an organisation, a team that can win races and perhaps even win a championship. But after a poor season and at the 11th hour, he found himself forced into buying an F1 team after Honda's shock withdrawal in December 2008. Braun did get Honda to agree to finance a season of racing in 2009, but he had one problem. They wouldn't supply engines. So Braun needed a new deal with an existing manufacturer. And quick. It's obviously difficult to envisage a motor manufacturer coming in in this climate. Having said that, it is a fantastic opportunity. The whole infrastructure here is one of the best in Formula One. Back to Martin Whitmarsh. At the beginning of 2009, he succeeded Ron Dennis as team principal at McLaren, who've just won the 2008 Drivers World Championship with sophomore sensation Lewis Hamilton. And it wasn't their first championship. McLaren were one of F1's major teams. And thanks to an exclusive engine supply agreement with Mercedes-Benz, they had the technical clout to take on the major manufacturer teams such as Ferrari, Toyota, Renault and BMW Sauber. But in the winter of 08-09, and in an extraordinary gesture of goodwill to help Braun's new team to remain viable, Whitmarsh triggered an unforeseeable chain reaction that eventually saw McLaren lose their exclusive works partnership and led to the rise of not one, but two manufacturer rivals who not only eclipsed McLaren, but dominated a decade of Formula One racing. In late 2008, McLaren-Mercedes were on a high, having rounded out a great season with Hamilton, winning the Drivers Championship at his second trial after a dramatic Brazilian Grand Prix in Interlagos. McLaren's old engine partner Honda, by contrast, had a horrible year with a completely uncompetitive car. 26 days after Hamilton's title-winning success, on November 28, 2008, Ross Braun and Nick Fry, the Honda team principal and chief executive officer, thought they were being invited by Honda Motorsport managing officer Hiroshi Yoshima to a meeting at the Renaissance Hotel at Heathrow Airport to discuss budgets for 2009. They were, of course, fully aware of the global economic downturn, the most serious since the Great Depression of the 1930s, since the massive collapse of the Lehman Brothers investment bank 10 weeks earlier, the markets had been in crisis. And, indeed, Braun and Fry had already been mentally pairing areas of the budget, but nothing could prepare them for what they were about to encounter. When they entered a small ante room, their first indication that something was badly amiss was that the normally effusive managing officer of Honda was crying. Such was the state of the global economy, he told them almost immediately that Honda were pulling out of Formula One. The program was to stop immediately. At a time when the car company itself was suffering falling sales in key markets, there was no longer any place for F1, even though company founder Tsuchiya Honda once said that Honda without racing would not be Honda. After pointing out that British law simply didn't allow a company to close up and go away, how damaging the loss of 750 British jobs would be to Honda's reputation, and that there must be alternatives to explore, Braun and Fry left with a reluctant agreement that they had three months' stay of execution in which to come up with a suitable solution. Meanwhile, there had been growing unrest in F1 circles. The teams had been bandying together under the aegis of FOTA, the Formula One Teams Association. They were unhappy with the split of revenues between themselves, Bernie Eccleston's Formula One management enterprise which runs the sport, and the FIA, whose president Max Mosley operated hand-in-glove with Eccleston as the governing body regulator. The teams were extremely concerned that a player as significant as Honda were withdrawing, and for once gathered together to offer their support to Braun and Fry in their rescue efforts. By February, the rescue talks had proved fruitful, and despite Honda's misgivings, since such things smack to their cultural sensitivities of payment for failure, a management buyout was agreed, if Honda agreed to invest sufficient backing for a season. Around the £100m they would have had to spend closing down the operation. While it wasn't a familiar way of doing business for Honda, it did provide them with the means to withdraw with dignity, and without the embarrassing need to close down a factory at the cost of over 700 jobs. The sum of £1 was agreed. Braun handed Oshima a symbolic pound coin to cement the deal. Oshima still has it. With Honda's financial support agreed, Braun's attention turned to securing an engine supply. They had just one month to arrange a deal and modify their new chassis to accept a different power unit to the Honda V8 around which the car was originally designed. It was a compromise, but they weren't in a position to complain. They were fighting for survival. Honda were the obvious manufacturer for Braun to approach first, but they made it clear they weren't interested. Out meant out. At Ferrari, Braun's old employer Luca di Montezemolo made a generous offer to supply power units when he first learned of the team's dilemma. But team members of Braun's tenure and seniority are savvy enough to know that customers are not encouraged to challenge the work's Ferraris. Indeed, di Montezemolo said you can have our engines for 2009. I will organise that for you if you wish. But then added, but don't beat us with them. Braun had made the decision in early 2008 to focus his approach on the 2009 regulations months before any other team, and his aerodynamic figures suggested it had paid off. But Ferrari certainly wouldn't like that. So they were out too. Braun's engine dilemma didn't escape the Formula One team's association attention either. They were very concerned that even after the management buyout, Braun could still be vulnerable unless the right engine supply was agreed. Until it was, the team was still as good as Moribund, something that Fota desperately wanted to avoid since there was strength in numbers when negotiating against foes such as Eccleston and Mosley. Braun had already passed up Fota chairman Luca di Montezemolo's offer, but to Braun's intense relief, another sympathetic ear at Fota emerged, second in charge, Martin Whitmarsh. There are a lot of people outside the company who helped us survive. Martin was one of them. Ron did his elder statesman part and did a very good job, and I must say Fota rallied round. And we wouldn't have survived without the help of those people. Whitmarsh had risen to CEO of McLaren Racing through a long career at the team, and in 2009, in Braun's hour of need, had just been promoted as team principal, taking over from longtime leader Ron Dennis, who was moving internally to oversee other areas of the company's activities. Whitmarsh was an amiable individual who, with his Fota hat on, was worried that they couldn't afford to lose a team. Keen to help a fellow British équipe survive, he went to see the executives at Daimler-Benz to ask if they would supply engines to a second team. Following the controversy between Ferrari and McLaren 18 months earlier, exclusivity was no longer as alluring, and Mercedes accepted the proposal. Seeing the benefit to Fota, Whitmarsh massaged Dennis into agreeing that McLaren should forgo their exclusivity of engine supply. Though individually unconnected, these events all combined to secure Braun their engines. And though Whitmarsh couldn't have predicted it at the time, it had catastrophic consequences for McLaren, ultimately leading to the loss of Mercedes as their works engine supply partner, and later, steering them into a wilderness of struggle with Honda. Their core strength as a leading F1 challenger was at stake, in part due to the inherent predilection for full manufacturer teams in Formula 1 at the time. The rise of manufacturer participation in Formula 1 at the time had obliged teams to seek partners in engine supply. In direct contrast to previous eras when they could buy proprietary power units from the likes of Coventry Climax, BRM or Cosworth. In the late 2000s, it was deemed essential to have a partner who would continue development of their power unit specifically for one team, thus enhancing their chances of success. Increasingly, those who had to buy their engines from manufacturers willing to supply them beyond a specific works deal were seen to have less chance of outright success. The engines for works clients were designed in conjunction with them to achieve the optimum installation, whereas proprietary engines were not always supplied to the same specifications across a manufacturer's customer base. And the decade leading up to 2009 had been dominated by true manufacturer teams like Ferrari and Renault and the previously exclusive McLaren-Mercedes Manufacturer Partnership. Come March 2009, the teams had arrived in Barcelona for the final test before the start of the 2009 season. The majority of the teams had been testing for weeks, but the Braun GP, refitted with the Mercedes engine, was taking its first laps in a season of dramatic change. The new regulations for 2009 embraced serious aerodynamic changes, the opportunity to employ energy recovery systems and a return to slick tyres, throwing everything back into the melting pot. This represented a tremendous opportunity for teams to reset and gain a design advantage over rivals through clever research and interpretation. But McLaren, fresh from winning the Drivers' World Championship with Lewis Hamilton, failed to grasp this opportunity. Their new MP4-24 was overweight and looked a little more like a heavier IndyCar. The Scuderia's 2009 car was almost as big a flop as was McLaren's, winning just one race. This hasn't been an easy year. I mean, getting the win now is quite a long time since I last won, so it was perfect. So had the Braun performed as well with a Ferrari engine as with the subsequent Mercedes power unit, it would not have been just Ferrari's cars that were red as the season progressed. By contrast, after showing astonishing form in testing with its clever and innovative double-diffuser aerodynamics, the Braun established itself as the class of the field in the first race of 2009. Stunning. I mean, just absolutely stunning. Everything all our staff have been through. Just sensational. And I can't really put it into words. It wiped the floor with McLaren's new contender, which flopped badly and could only be massaged into winning form twice later in the year in Hungary and Singapore after huge extra developmental expenditure. The opposition gradually caught up by mid-season, but with six wins of the first seven races for Jenson Button and two for teammate Rubens Barrichello, Braun hung on to win the World Championships for drivers and constructors at the first attempt. Well done, Jenson. Fantastic. It's been a hard way of doing it this second half, but we got there. Oh, thank you so much for this season. It's been very, very emotional. Thank you so much, everyone, and congratulations to the whole team. You've been magnificent all year. This was a sensational F1 fairytale. But back to that controversy between McLaren and Ferrari in 2007. Ferrari accused McLaren staff of using their intellectual property, an accusation which was upheld by the sport's governing body. The FIA fined McLaren 100 million US dollars. The FIA has done a very thorough process. I think they've understood very well the situation. I'm not completely comfortable with the outcome, but the punishment fits the crime. And since Mercedes were a 40% shareholder in the team, they were obliged to pay 40 million of that. It was a financial and reputational blow. They'd been McLaren's engine partner since 1995. But McLaren's failure to design a winning car for the start of 2009 and Braun's remarkable and embarrassing success that season increased tensions between the two parties. Cash flow is king in Formula 1. And in July 2009, in order to receive vital monies due from Eccleston for the 2008 season, Braun were forced to break ranks with FOTA and sign a letter of allegiance to the official 2010 FIA Formula 1 World Championship. But Mercedes also made it clear to Braun that if they stayed strong, they would help with any financial shortfalls over the remainder of the season. It had become increasingly apparent that the car manufacturer was now open to the idea of starting their own team. Ross Braun later made the point that if his team hadn't beaten McLaren that year, the idea probably would never have gained traction, given the upheaval it entailed. And McLaren might well have gone on with Mercedes to enjoy another era of sustained success when the turbo hybrid formula was introduced in 2014. Great job, guys! Fantastic! The car was so nice to drive. Instead, with Honda's support coming to an end and Braun's World Championship winning team on the market, Mercedes had agreed terms to buy Braun by the end of 2009 and brand it Mercedes for 2010. From 2010 onwards, McLaren had been reduced to the status of an engine supply customer rather than partner. And even that is finite. The agreement would expire at the end of 2014, at which time Mercedes had divested themselves of their 40% shareholding in the team. McLaren continued to win races more than Mercedes in 2010, 11 and 12 before Mercedes hit back with three wins in 2013 when Lewis Hamilton switched from McLaren. Brilliant job, Lewis! Fantastic drive! This is probably one of the most important Grand Prix wins of my career, you know, to move to a new team and to win for Mercedes-Benz is just a real privilege. The writing was now on the wall and in 2014, when the first turbo hybrid engine formula was inaugurated, McLaren had lost their way so much that even with the same power unit as Mercedes, they never got a look-in. When McLaren's Mercedes supply contract finally expired in 2015, the returning run Dennis approached old partner Honda for the supply of power units. And although the Japanese manufacturer said they weren't ready, he persuaded them to return in 2015, a year ahead of their preferred schedule. It proved to be a disaster. The power unit performed poorly all season at a time when the new Mercedes proved the dominant car and power unit, prompting angry and frustrated McLaren number one driver Fernando Alonso to declaim his dissatisfaction on Honda's home ground at Suzuka. The deliberate insult, a harsh blow to Honda's pride and the hurt ran deep. While Honda and McLaren were hurting, an upcoming Dutch driver, Max Verstappen, the son of former Benetton F1 racer Jos and karting star Sophie Kumpen, debuted with Toro Rosso. Just five races into the 2016 season, Red Bull promote him to the senior team and he promptly wins the Spanish Grand Prix. It's only the fourth win for a Red Bull Renault since the beginning of the modern turbo hybrid era. Red Bull had been losing patience with their engine supplier Renault. Although they'd had misgivings about the Renault power unit before, the 2009 regulation change which cost Ferrari and McLaren their class-leading positions flattered them and they won four world championships for both drivers and constructors between 2010 and 2013. Renault had been tipped to be the most prepared turbo hybrid manufacturer, but Mercedes proved so prepared in 2014 that even with Adrian Newey's aerodynamic prowess, the Red Bull Renault couldn't consistently fight with them. Finger pointing at reliability and performance inadequacies between Red Bull and Renault became a theme of the era. I'm really, really slow down the straight. Losing out in the toe, losing a lot. It's an issue, I think, with the turbo. OK, now boxy slap, please, boxy slap. And by the Brazilian Grand Prix in November 2017, the relationship was all but over. Meanwhile, things had improved little for McLaren and Honda by 2017. I can't duck the issue that for both Honda and McLaren, we're not where we need to be and that this season is not only challenging but frustrating. I think when Hasegawa-san was here last week, he recognised some of that frustration. When asked how things were going in a meeting in Japan as the relationship with Honda declined further, Zac Brown replied to McLaren boss Jonathan Neal's text with a picture depicting a donkey and a giraffe copulating. The relationship was going nowhere. As they had done with Red Bull, performance and reliability issues broke up the partnership that had once been a world-beater. McLaren terminated their deal with Honda and did a deal instead with Renault. We feel like we're going to be competitive next year. Disappointed things didn't work out with Honda. They're such a great company. Everyone worked really hard together, so you never like it when you take on a project and don't succeed. But this is sport, there's no guarantees. And so we move on. We want to finish the season strong. We're looking good today. But excitement, that's what everyone has, is a lot of excitement back at the factory. While Red Bull kept Renault power but dipped a toe in the water by agreeing an engine supply deal with Honda for their Toro Rosso junior team. P4, P4. Fantastic, this is amazing. Very good. Unbelievable, unbelievable. Satisfied with their Toro Rosso Honda results, Red Bull moved to make a similar agreement with the senior team for 2019, ending their 12-year partnership with Renault. So by 2019, Red Bull at last had the genuine engine partnership they'd always craved with a manufacturer rather than the customer deal they'd had with Renault. Ron Dennis, who enjoyed so much previous success with Honda but had since left F1, predicted that Honda will win by the eighth race. That would have been the Canadian Grand Prix. It transpired. He was one race out. Fittingly, Verstappen won on Red Bull owner Dietrich Mateschitz's home ground in the Austrian Grand Prix, the ninth race of the year. It ended a run of eight Mercedes victories since the start of the season. Verstappen wins a Formula 1 Grand Prix! And it is Red Bull back on the top step of the podium. Mercedes, however, remained the pace setters overall. Lewis Hamilton had won the World Championship in 2014, 15, 17, 18, 19 and 20. He equalled Michael Schumacher's seven titles but set a new benchmark with 103 race wins. Only his teammate Valtteri Bottas, Verstappen and Ferrari's Charles Leclerc offered consistent challenges. But another event in this chain reaction brought Honda to the forefront. As in 2009, when new regulations presented an opportunity for Braun to excel, a small aerodynamic rule change for 2021 finally clipped Mercedes' wings and levelled the playing field with Red Bull Honda. Now, with the equality Red Bull had felt they lacked in the past, Verstappen and teammate Sergio Perez delivered the first non-Mercedes Constructors' Championship since the turbo hybrid era began in 2014. And 30 years after Honda's last championship, the silverware their full factory team certainly would have won in 2009 had so many events been different. So many small moments could have altered the course of history and left Ayrton Senna as the last driver to win a championship with Honda in 1991. Had aerodynamic rules favoured other teams more than Red Bull, if the Toro Rosso-Honda partnership had been a failure, their place at the top of this decade's championships could never have been. And if that olive branch offered by Martin Whitmarsh had been vetoed and the success of Braun Mercedes had never come to pass, this small butterfly effect would have completely reshaped the order of the entire modern turbo era of Formula 1.