Fernando Alonso

In the Pitlane: Hats off to Alonso

Fernando Alonso

One of the unanswered questions of Fernando Alonso returning to F1 is how much will Renault pay him?

Cash strapped Renault and Alonso are now living in the new world of Covid-19 and its economic consequences.

Alonso may well have boxed clever and structured a deal that allows his fashion brand Kimoa to become a sponsor to the team in lieu of payment.

Alonso no doubt will receive wall to wall media coverage upon his return and we will see his mug shot complete with the bright yellow Kimoa hat 24/7.

The Kimoa logo was also seen on Alonso’s helmets at the 2017 Indianapolis 500 and the 2018 24 Hours of Daytona so it will be no surprise if it appears on his race helmet next season.

Kimoa is an important part of his life post-racing so the exposure presents a fantastic opportunity for the brand.

No doubt Alonso has had the advice of his long-term mentor Flavio Briatore who made his early money running successful Benetton franchises.

Although Alonso is managed by Luis Garcia Abad the hand of Briatore was not far away during recent negotiations with Renault team principal Cyril Abiteboul telling Autosport “He’s around, and he has been amongst many people, and I’m not going to mention them, but he’s been part of today’s announcement.”

Briatore claims not to be interested telling La Gazzetta dello Sport, “If Fernando needs it, I am ready to help him, but I personally have no desire to return to a Formula 1 team. In 2021 Alonso returns, Briatore does not,”

I am not so sure and as is often the case with Briatore, the jury’s out.

Kimoa is in good company with fashion brands heavily involved in F1 with Tommy Hilfiger, Jack and Jones, Puma, and Crew Clothing all sponsoring teams.

Of course, Red Bull has taken it to the next level when they renamed the Toro Rosso team AlphaTauri, after their premium fashion brand.

If Fernando wants a bit of advice on developing Kimoa then he needs only a quick walk down the paddock to pick the brains of Lawrence Stroll who made his fortune investing in Pierre Carden and Ralph Lauren. Along with Hong Kong investor Silas Chou, he invested in clothing designer Tommy Hilfiger and Michael Kors.

On a footnote: The origins of the word Kimoa can be found in the Hawaiian language and it relates to “sitting and watching the sun going down together” which reminds me of Alonso famously sunbathing on a deckchair at the Brazilian GP in 2015 after another breakdown of his McLaren during qualifying.

Another pink Mercedes?

So Ineos owner and principal partner of the Mercedes F1 team Sir Jim Ratcliffe unveils his new 4×4 off-roader, the Grenadier.

It all started when Land Rover announced the end of production of the Defender in 2016 and Ratcliffe spotted an opportunity.

In a somewhat surprising move, the company unveiled the car two weeks ago and said testing would be in plain sight removing the need for camouflage wrapping, foam blocks, or fake panels. The company did not seem concerned with copycats but that could be because looking at the pictures well it looks remarkably like a Mercedes G-Class, even if it is not pink.

Ratcliffe has teamed up with Austrian manufacturer Magna Steyr who engineer, develop, and assemble automobiles for other companies on a contractual basis. Magna will provide the chassis and suspension crucial elements in a 4X4.

Magna’s involvement is interesting as Mercedes does not manufacture the G-Class themselves but instead subcontract the building of the vehicle to – yes you guessed it – Magna.

To rub salt into Mercedes wound the Grenadier will have a BMW six-cylinder turbocharged engine in diesel or petrol forms.

Should Mercedes be worried?

Well, Ratcliffe has spent a billion Euros on the project so he means business and will undoubtedly price the vehicle to compete with the other players in this sector.

The Grenadier will be more expensive at £50,000 than the Toyota land cruiser at around the £35,000-mark, Ford’s Ranger Raptor at £42,000 but will be well short of the Mercedes G-Class, which starts at £92,000.

The 4×4 was to be manufactured in Bridgend, Wales next to Ford’s soon to close factory in 2021. The plant would provide much-needed employment with an initial workforce of 200 that would rise to about 500 when production is at full steam.

Then in a shock development, Ineos announced last week they were in talks to buy a factory in Moselle France which had just come on the market. The seller well unbelievably it is no other than Mercedes!

Wales’ Economy Minister Ken Skates has criticised Ineos’ decision, which comes after a long public commitment to producing in Wales.

“I have told the CEO that abandoning Bridgend at this late stage, after so much effort and money has been invested in preparing the site, would be a terrible decision for Wales and the UK,” he said.

“We have impressed on the company in no uncertain terms the importance of honouring its commitment to Wales and to deliver on its promise to build a British icon here in Britain.”

Well, I would not hold out much hope as you do not become Britain’s richest individual by worrying about such matters.

On a footnote: Ratcliffe named the vehicle after his favourite pub the Grenadier, just as well he does not frequent David Coulthard’s pub, The Brown Dog.

In for a penny in for a pound

Formula 1’s owners Liberty Media have secured an amendment to the conditions on a $2.9b loan to help it navigate its way through the Covid-19 crisis.

The agreement, which also allows as additional $500m credit facility allows the company a greater debt-to-profit ratio.

Investors seem to be signalling confidence in Liberty Media with hedge funds and other institutional investors recently increasing their holdings in the company.

Liberty is putting a brave face on the recent announcement as Chase Carey CEO told Motorsport.com, “This new flexibility with our partners, ensures a stronger balance sheet of the company and gives us more liquidity to survive this difficult period,”

Liberty are no strangers to debt, the business owned by American billionaire John Malone built the cable giant over 40 years funded mainly by taking on debt.

This latest development comes hot on the heels of the agreed $38bn merger between Liberty Global’s British business Virgin Media and Spain’s Telefonica’s o2. The deal was made possible by a £4bn loan agreed with over 30 banks all hungry for business in the Covid-19 era.

The deal will increase the amount of debt on Liberty’s balance sheet give or take a few million to £18 billion.

Liberty is not alone in the borrowing frenzy with the OECD stating in March that companies outside the financial sector owe $9.6 trillion in the United States — up more than 50% in a decade twice what they owed in the financial crisis year of 2008.

So, in the harsh new economic reality companies are borrowing their way out of the potential meltdown, how it will all end is anybody’s guess.

On a footnote: If John Malone needs to offer his lenders some personal guarantees he could offer security on his Bell Ranch in New Mexico, a 290,000-acre plain, or his 800-acre Bridlewood Farm in Florida.

Other options are his land in Maryland, Maine, New Hampshire, Colorado, and Wyoming.

In total, he owns 2.2m acres of US cropland, ranch land, and woodland making him the largest landowner in America.

If it all gets too much, he could always decamp to his 32,669-square-foot Humewood Castle in Wicklow, Ireland.

Note: Garry Sloan is the author of “In the pit lane – F1 exposed” details at inthepitlane.com
Copyright ©2020 Garry Sloan

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