Stopping Formula One in its tracks - the harsh reality facing British Motorsport after Brexit
Formula One (F1) is widely regarded as the pinnacle of world motorsport and is an industry worth around $4 billion a year.
In total, the ten F1 teams spend around $2.6 billion a year on technology, research and development in order to make their cars that split second faster than their competitors in pursuit of F1 glory.
With 7 out of the 10 F1 teams based in “Motorsport Valley” (an area covering the Midlands and Oxfordshire), the heart of F1 is well and truly embedded in Britain. However, with Britain’s exit from the European Union fast approaching, is this niche industry under threat and does Britain risk losing the jewel in the F1 crown to other countries?
Broadly speaking, the automotive sector as a whole currently has a shortage of around 20,000 professionals. Against a backdrop of falling domestic car sales of leading manufacturers such as Jaguar Land Rover, and Nissan’s recent decision not to build its next generation X-Trail model at its flagship factory in Sunderland, the industry is clearly in transition and facing immediate difficulties, with further difficulties undoubtedly on the horizon.
The obvious concern for F1 is how these wider automotive issues may replicate themselves in the motorsport industry, which remains fiercely competitive and already in a state of transition in light of its changing regulations.
One of the primary issues facing F1 is logistics. Jonathan Neale, the chief operating officer at McLaren, has recently explained how: “McLaren F1 takes 40 tons and 100 people and we pop up at an event every two weeks around the globe in 20 countries and five continents, through variety of customs borders, to put the show on the road. Currently there are well-trodden paths in how we manage customs and borders in order to move seamlessly.”
The real worry is that such “well-trodden paths” and the seamless transition between customs and borders that is currently enjoyed become restricted or blocked in light of Brexit, with extra administrative burdens and costs placed on teams as they travel across the globe to compete in races. With each team possessing a workforce of varying nationalities, Neale suggests that there is a real risk in F1 teams’ abilities to “deliver the show” given the potential delays that may ensue in light of more restrictive cross-border measures.
Talent acquisition and retention is also at the forefront of the Brexit uncertainty for F1 teams. McLaren’s F1 team employs over 800 people and in its engineering group alone there are 23 different nationalities. Obtaining such a diverse workforce is of paramount importance to McLaren and Neale is alive to the real risk of “getting into crazy, administratively costly and time-consuming visa requirements either for retention or for future recruitment”. Quite rightly, McLaren (as well as the other F1 teams) want to be able to hire talent on the basis of the right person for the job, and not have to worry about whether that person’s nationality will pose an administrative visa burden.
Aside from the obvious logistical issues and workforce supply, another key area most likely to be affected is the supply chain. An F1 car has about 14,000 parts, with the majority of these parts sources from a number of small-to-medium size enterprises in the UK and across Europe. Indeed, some complex assemblies will cross many borders before they arrive in the UK. Neale explains that “if every time a border is crossed there is a transaction, it introduces a huge amount of inertia and inefficiency to our supply chain”. Clearly with inefficiency comes extra cost; which is arguably money that ought to be invested by F1 teams in the supply chain and not in dealing with further administrative and logistical road-blocks.
With 29 March 2019 fast approaching and a no deal Brexit looking a distinct possibility, F1 teams (and the automotive industry generally) must be alive to the obstacles that may be on the horizon. The risk of Britain losing the jewels in the F1 crown in the event of F1 teams relocating elsewhere in the EU after Brexit is genuine and would be a huge blow to F1 and the primarily British-focused supply chain that underpins the sport. While we hope that such legacy remains intact and Britain remains the heartbeat of F1, the uncertainties of a no-deal Brexit could well and truly put the brakes on F1 as we know it.