McLaren has been hit hard by the coronavirus pandemic and the resulting massive drop in sales. Following the redundancy of 1200 McLaren Group employees, the company has been searching for sources of extra funding to keep everything flowing. First revealed by Sky News and confirmed by Autosport, McLaren is apparently looking to offload as much as 30 percent of McLaren Racing, which includes both its Formula One and IndyCar concerns.
McLaren was one of the major voices in F1 looking for a not inconsequential reduction in the series’ planned 2021 budget cap. In discussion for that cost cap McLaren was loudly in favor of a $100 million max, while the teams ultimately decided on a $145 million number. Allegedly McLaren’s 2019 budget was around $296 million, but that’s a far sight from the near half-billion dollar budgets that Ferrari, Mercedes, and Red Bull are spending.
McLaren is among the most famous names in the motorsport world, having secured eight Formula One world championships, and a pair of Indy 500 victories. McLaren was also the most successful constructor in the history of the infamous Can Am series. Of course, the team has not won an F1 championship in 12 years and has had a series of rough seasons since the introduction of the V6 Turbo era in 2014. After it was dropped as the defacto factory Mercedes team in favor of an actual Mercedes factory team the team had a tumultuous few seasons at loggerheads with engine supplier Honda, and has been on a bit of an upswing since moving to Renault power in 2018.
The new budget cap has McLaren optimistic that it can compete on a more level playing field with the top three cash dumping teams. As a result it is prioritizing its ability to spend the full maximum cap in 2021, which it will likely need an influx of money to accomplish.
As of right now, McLaren Racing is owned by the same shareholders as its McLaren Group parent company. About 56 percent of the company is owned by Bahrain’s sovereign wealth fund, 14 percent by Mansour Ojjeh, and 10 percent by Michael Latifi, father of Williams driver Nicholas Latifi. The company will need some form of legal restructuring to separate itself from the rest of the engineering and street car manufacturing segments of the company in order to sell a percentage of just the racing team.
During last month’s layoffs, McLaren trimmed its overall staff by 1200 but the racing team suffered only a 70 staff member reduction. Presumably this was done this way because automobile manufacturing line workers are less specialized than racing team engineers and won’t carry any secrets with them to another racing team.
McLaren has been on the F1 grid since 1966, and while things aren’t quite as dire for Macca as they are for Williams it’s a shame that either of these iconic teams have been forced into this position. Maybe it’s just too hard for these legacy brands to adapt to the ridiculous expense of modern day F1.