J i m Wrote:
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> It would also push the cost of the engines up
> again... and that's the last thing the non works
> teams need.
I have seen that argument thrown around a lot, and it is both clever and tricky, because
essentially it is right, but
in actuality, it is wrong. Which means it is perfect for deceiving people, without lying, to maintain status quo.
What are the costs of a new engine formula? Or even reintroducing an old formula?
Well, IMHO, the cost that matter can be broken down into two categories. The first is the actual production costs. The second is the R&D attached to a formula switch.
Looking at production costs, you can break that into two categories that really matter (assuming materials costs will be fairly equal). The first is the cost of setting up a production line - or if you have an pre-existing one, retooling, which would be the case for almost all F1 engines. Setting up/retooling is expensive make no mistake. All the machines have to be changed/recalibrated and the flow of the unit through manufacturing has to be thought through again from the ground up. Software has to be bought or written. People need to be trained/hired/fired. The effort involves a lot of people, from management assets, to HR and production engineers. That is the essential part of the argument, and that is true. There is a large expenditure up front.
But what this means in actuality, is that the first engine to leave the assembly line, is very expensive, as it carries these costs. It is also going to be the most costly in terms of the way through the assembly line, and the slowest unit produced. From hereafter, every unit is going to be produced cheaper and faster, following an "ln function", which means fast initial gains followed by diminishing returns, until you eventually see almost no improvement at all. Unit number 25 to leave the production line comes off significantly faster and cheaper than unit 1, while unit 10000 is not going to be all that different in terms of speed and cost, than unit 9975.
So, the argument of switching to a new formula - on the production side, will increase costs of engine supply, is essentially true, and this is also why it
can be, and is, applied to the old V8s, but actually it's false. Retooling to an new/old formula will incur the costs mentioned above, and gains in mass production of the existing engine formula will be reset. But it hides the fact that an engine formula (like the old v8 or a new less complicated engine formula), that is at a base cost cheaper than the existing formula, once the initial costs are overcome will be cheaper, and will remain cheaper on the long run. And in reality manufacturers exported the retooling costs of the V6 to the customer teams as well, so there is nothing new here! It has been argued to put an engine supply cost cap in place, and effectively, this would see that the retooling costs are kept to the manufacturers and not exported to customer teams, delaying the point in time when manufacturers reach break-even and start turning profits on engine supply.
Then there is the cost of R&D. It is twofold. The first is up front R&D on new a formula. The second is development R&D as the engine is run on track and in the championship. The up front R&D is real and it is significant. But just like retooling, it is a single shot expense. Development R&D is equal to what we already have in the V6s, even with the token system. If works teams have 500 million USD to blow on development R&D on an engine, they are going to do it, even if they only have a handful of tokens. If the token system makes it so, that the costs are not worth the gains, this money is not going to disappear out of the R&D budget. It is just going to be channelled somewhere else.
So, when it comes to reintroduction of the V8s, you get retooling costs, and that is pretty much it. There is no up front R&D, and development R&D is going to be whatever the works teams can get away with. So no, it would not push up engine costs to reintroduce the v8s. Initially yes, with a one time expenditure (read, manufacturers stop turning a profit on customer teams, which they feed into their own works team, and will have to wait a while before they start doing so again), but it would in the long run be cheaper than the existing formula, and that is the economic sustainability we need in F1.
When it comes to introducing a new less complex formula, then you get up front R&D + retooling costs, and that is also a one time expenditure. In the long run, it is the same development R&D costs (= whatever the regs let's you get away with), and a cheaper formula.
Cheaper + the same = cheaper than existing engine regs.
It's only after we've lost everything, that we are free to do anything.
Edited 7 time(s). Last edit at 09/29/2015 03:33AM by Morbid.