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Analysis: Kaltenborn remains at the helm as Sauber secures F1 future with new backers
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Marcus Ericsson
Posted By: Alex Kalinauckas  |  20 Jul 2016   |  2:57 pm GMT  |  62 comments

The Sauber Formula 1 team has been bought by financial investment firm Longbow Finance S.A, it was announced today.

The deal means that Peter Sauber, who founded the team back in the 1970s before entering it entered F1 in 1993, will retire and Longbow Finance’s President and CEO, Pascal Picci, will replace him as chairman. Significantly Monisha Kaltenborn, who was also a shareholder, will continue in her roles as CEO and team principal.

Peter Sauber

The new deal follows years of speculation about the future of the Swiss squad, which has been in financial trouble that resulted in salary payments being paid late to team members.

In a statement unveiling the new arrangement, Longbow Finance said it would, “stabilise the group and create the basis for a competitive and successful future.”

Kaltenborn, who has been working on a deal to secure the team’s presence in F1 in recent months, explained that Sauber, which will stay as the company and racing team’s name, was grateful to Longbow Finance’s for its investment.

She said: “We are very pleased that by reaching an agreement with Longbow Finance S.A., we can secure the future of Sauber at the pinnacle of motorsport. We are convinced that Longbow Finance S.A. is the perfect partner to again make the team competitive and successful in Formula 1.

Monisha Kaltenborn

“At the same time the new structure will allow us to finally further expand our third party business in which we commercialise our know-how. This solution is in the best interest of our employees, partners, loyal suppliers, the base in Hinwil and for the Swiss motorsport.

“We are very grateful that Longbow Finance S.A. believes in the competences, efficiency and capabilities of Sauber Group, and we look forward to a new exciting future.”

Peter Sauber sold the majority of the team’s shares to BMW in 2005, before buying the squad back at the end of 2009 after the German manufacturer pulled out of F1.

Speaking about the new deal, he said: “Monisha Kaltenborn and I yesterday signed an agreement which secures the future of the Formula 1 Team and the Sauber Group.

Felipe Nasr

“I am very happy that my courageous investment to buy the team back, which I made six years ago, with the intention to secure the base in Hinwil and the place in Formula 1 has proved to be correct.”

Picci added: “As a Swiss company, we are very pleased with having secured the future of a Swiss presence in a highly specialized and innovative industry.”

Sauber has endured a difficult first half to the 2016 F1 season. The team has zero points from ten races and it has struggled to escape Q1 for much of the year, as there have been few updates to the C35.

Felipe Nasr

The low point of Sauber’s season so far came at the Monaco Grand Prix when its drivers Marcus Ericsson and Felipe Nasr crashed into each other shortly after team orders had been issued for the pair to swap places.

James Allen’s analysis: There have been plenty of potential buyers who have kicked the tyres on the Sauber team since it was rescued by its founder following the BMW withdrawal. These include wealthy individuals like Lawrence Stroll as well as companies like FIAT Chrysler Automobile, whose ambitious chairman Sergio Marchionne wanted to turn the team into Alfa Romeo. One of the sticking points in some cases was believed to be Kaltenborn’s position, as she wanted to remain involved.

Another of the main handicaps to a deal was the cost of operating an F1 team in that part of Switzerland, close to Zurich, where wages are amongst the highest in the world. Also the difficulty of attracting the best engineers and technicians to live in Switzerland, far from the UK’s F1 silicon valley of the M4/M40 corridor.

At the start of 2015 the team ended up in court when Giedo van der Garde claimed he was owed a drive, with backers interested in the team, while in the background Colin Kolles was also waiting to see if he could gain control of the team.

This year has been a huge struggle financially, with relatively modest prize money of around €60m from F1 Management and sponsorship income from Marcus Ericsson and Felipe Nasr in the region of €30m. A recent injection of cash, believed to be from one of Ericsson’s backers, settled some debts and paid the salaries and kept the team going until the Longbow deal could be done.

One of Sauber’s strengths is the wind tunnel it owns in Hinwil, which is rented by clients including Audi. It is a 100% wind tunnel which operates at 60% for F1 purposes as per the rules, but which is large enough to fit two transit vans one in front of the other. The exploitation of this and other automotive services is part of what Longbow sees as the potential of the business.

But the first order priority will be to score some points as the team trails in 11th place in the Constructor’s Championship after Pascal Wehrlein’s single point for Manor in Austria. If Sauber are outside the top ten at the end of the season it will have significant financial repercussions.

What do you make of the news Sauber has been bought by Longbow Finance? Leave your thoughts in the comment section below or head over to the JAonF1 Facebook page for more discussion.

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1
Anthony Jenkins

And credit to Sauber for having big, visible numbers on their cars for easy identification for fans.
What a concept!

2
Anthony Jenkins

Farewell to Peter Sauber, a fan and a classy gentleman. His team has slipped in competitiveness ( and class) in recent years as he took a lesser role but his name will continue in the sport and that is a good and fitting thing.

3

I fear this may not be the secure future they are hoping for. We have seen capital investors in F1 before, and they do not desire/or succeed in improvements on the track; they are only interested in a way to make a quick buck selling to the next investor. Shame also that Kaltenborn is staying on; particularly if she has been the blocker for more credible backers (such as FIAT).

4

James, is it known if he actually made any money out of the sale or if it was a $1.00 type deal……Be nice to think he, at the least, came out with something and isn’t going to retire to a swiss “council flat” and be on meal tickets the rest of his life (or whatever the equivalent is there 🙂 )

5

Working on that. I suspect not, although the debts had become quite significant

6

In the short term it’s good news. But long term, the deal feels very murky. I hope Peter Sauber enjoys a well earned retirement after 40 years in Motorsport. Was great seeing some of the Sauber Mercedes sportscars in person recently. Such iconic cars and some great drivers have benefitted hugely from Peter’s guidence. Schumacher, Frentzen, Raikkonen, Massa, Heidfeld.

It does concern me though that Kalternborn is still at the helm. She seems to have lost quite a lot of respect after the driver contract shambles of last year. Since she took over with the day to day running of the team a few years ago they’ve been in steady decline.

OK a lot of that can be pointed down to the vast changes of the V6 hybrid era benefitting the manufactures more than the private teams, but they should’ve never finished behind Marussia in 2014 for example. I really would love to see a spark back in this team, but I just don’t feel confident in that happening.

7

Good on you Peter Sauber. Job well done. Solid, understated bloke who saved my favorite team after the Qadbak fiasco, saved it again with the Longbow deal and deserved much more F1 success than he got. Great judge of driving talent, very low rating on the histrionics scale, astute businessman, remarkably tenacious competitor. All the best in a well-deserved retirement, sir. You will be missed.

8

“I am very happy that my courageous investment to buy the team back…”

Nothing like a bit of modesty, eh, Peter…

9

LOL

He has been known to wonder why he did it given the grief it’s given him!

10

keep it ticking over on the edge of extinction till someone like VW decides to get involved ka-ching!
As long as they dont ka-ching! too soon…

11

Well that is a gem of a piece of information. Previous deals have faltered because Kaltenborn wanted to remain involved. So what was once a decent, well run team has been starved of investment and driven in to the ground because of it’s team principle’s vanity.

12

I also have reservations about Monisha’s ability – I would be interested to her James’ view on her. I don’t feel too excited at this “great”news for Sauber – sounds like another shady deal which will buy some time, but not sure if this Company is really in F1 to make a real go at it? Hope i’m wrong, but Sauber may die a slow death like Brabham, Lotus etc ….

13

Good. While they do not change the team’s historic name, I hope atleast they can hire an awesome graphic designer with better taste. Frankly that car doesnt bring its A-game when it comes to car graphics, color schematics and aesthetic visual cues – that fans would expect and be wowed at in the pinnacle of motorsport.

Even though the Manor team also suffers budget issues, their car looks easy on the eye and very smart. The sauber looks like it is seriously sick and wears the sickness on its skin.

Hoping for a massive refresh of its visual schematics from Sauber soon – to mark its new ownership change. Show us what you have Longbow FInance 😀

14

Longbow, yes an interesting name with a lot of motorsport heritage.
That said, I’m happy for the team and for Peter Sauber himself. He should be able to retire and hopefully he won’t have to step in again. Sauber have been in F1 for so long and they deserve a place on the grid, preferably a bit higher up than they currently are. I like the smaller privateers to be honest and the best news about this all is that we won’t lose another team (for now).

15

I for one would sincerely like to wish them the best of luck. plenty of the great drivers got their start with the Swiss team and the team is to be congratulated for their resiliency. Kimi, Felipe, Nick and Seb are just some of the great alumni. go Sauber!

16

I can’t somehow get too enthusiastic about all this. yes, it’s good to see that they are continuing in F1 but they have always been, at best, mid field runners that really go nowhere in particular. If you cap that with the fiasco when kaltenborn signed four drivers for two seats it seems as though there are management problems there as well as a severe shortage of cash. obviously there is a business case to be made and the new investors would’ve done all the due diligence to support their acquisition. hopefully it will assist in giving the team the opportunity to flourish but i won’t be holding my breath. I would’ve loved to see the team beome a factory backed entity under the banner of alfa romeo…now that would’ve been exciting!!

17

Yes that was ridiculous when they signed 4 drivers for 2 seats Kenneth.
I’m sure there’ll be more shenanigans at Sauber in the near future. It’s a bit odd that Sauber himself has been shown the exit. Bit of a kick in the teeth for Mr Sauber while Kaltenborn has 30% ownership in Sauber (even though it was Peter who offered it to her willingly a few years back).
I mean the opposite masterful exit was Brawn. He left Mercedes with saddlebags full of money.
First when he bought the company of Honda for a pound then Brawn F1, he sold it to Mercedes for millions and then he got a massive golden handshake payout and lucrative incremental payments for a few seasons when they showed him the door…politely ?. That’s how to leave an F1 team ?????? carrying money and whistling a merry tune.

18

Where does it say that Peter Sauber was shown the door? It may have been entirely voluntary. My understanding was that he bought the team back from BMW in order to save jobs, rather than a burning desire to be in F1. Perhaps now he feels he has secured the future of the team, and he wants to do something else?

19

@ BKF…. I somehow don’t think that peter sauber will be mourning his departure at all. He wanted to retire some time ago but came back when the ‘merde looked like jamming up the fan’!! i should think that he’d be very happy to be leaving considering that he is reputedly an extremely wealthy man and even more so if he has been able to completely offload his shareholding at a decent price. As for longbow, well they might just be in a warehousing arrangement, who knows but i would be pretty sure that they would be aware of the costs of participating in F1 and they would have a strategic plan in place. As they don’t appear to be ‘racing’ bred i would seriously think that they will invest, build on results and then possibly flick it on, after all marchionne has said that he wants alfa romeo in the business and he might just be using longbow as a foil!! i guess that well see soon enough.

20

I don’t know enough about Longbow Finance S.A; a search doesn’t reveal too much information. But my initial concern is that this deal will replicate what happened with Renault/Lotus and Genii Capital.

A finance/investment company taking a stake in a team in the (false) belief that it can be a profit centre. Realises it’s in too deep / does not offer a reasonable return on investment. Pulls funding, team on last legs etc.

While there might be some infrastructure that could generate a profit as the article states, will that be enough to cover the expenses of an F1 team? Sauber (unlike Renault Lotus) isn’t starting from a position of strength. By the sounds of it, the team was already one foot in the grave. There is very little latitude for Longbow to pull a Genii.

21

Results & administrative blunders (embarrassments really), show Monisha should not remain at the helm. This is part of the problem. Obviously she has used her shareholding for control at the expense of what’s best for the team. I Really like Sauber, but Monisha like any leader has to accept ultimate accountability of that role.

22

Bitter-sweet news, James.
Although I am happy that team Sauber remains in F1, I’m quite sad to hear that Peter Sauber will have to retire. For me, his path in F1 symbolises the fight of the independent teams for survival in the harsh, distorted, hostile environment of F1.
For what it worth, I wish him all the best in his future endeavours and thank him for all he has done for motorsport.

As for the team, I hope Kaltenborn’s selfishness doesn’t drag them further down (as if there was any more place left for them to fall).
Her leadership was at the least detrimental, hearing that one of the reasons for the delays of some possible agreements, leading to financial relief for the team, is her unwillingness to let go, makes it even worth.
Under her rule, the team endured some embarrassing moments, and unfortunately not only on track, the 2015 start of the season being its nadir, when they had under contract 3 pilots for only 2 cars – the one left behind being the driver that helped them survive the second half of 2014 (money payed in advance for the 2015 season!).

Hopefully Sauber’s team will improve in the following seasons, allowing them to carry on further in F1, the paddock would be strange without them.

23

sounds like this was written in a lunch break, no wander it is so skinny on the detail. like kaltenborn’s % share in the company before and after the deal.
also sounds like kaltenborn has learned from ecclestone selling majority share holding to a financial company while remaining in charge. smart move kaltenborn.

24

I don’t quite know which is the lesser evil
1) being bought out by a manufacturer that might pull out at the whim of board members
2) being bought by an investment firm that might do “A Lotus”…..

Food for thought

25

This is great news for the team and the sport,any investment like this is really important for the future of the sport. Let’s hope that the team can move forward into a more equal midfield position along with all the other teams…….except Mercedes of course who are the only team not in the midfield.

26

Is Monisha still a shareholder? Are Longbow in it for the ling term or are they just looking to flip the team? What kind of budget will the team have?

27

Is there good money in analysing the aerodynamic benefits of tailgating in a Transit?

28

Good luck to them, though I disagree with the decision to keep Monisha, I think it is a mistake.
Hopefully next year they are more competitive, or I guess it will be their last year in F1.

29

Great news! I feared that they would vanish like all the other teams of yesteryear. Very pleased, hope they can score some points now and work towards at least one decent upgrade for the car.

30

Excellent analysis at the end of the article James. I’m not surprised by your Kaltenborn comments. I figured that was the only reason why she was still in the team. I remember when Sauber was at the forefront of aero innovation. I was hoping for a buyout and rebranding. It looks like Kaltenborn’s Sauber will chug along.

31
Rob in Victoria BC

Good for Sauber. I always admired Peter Sauber for taking the team back when BMW left. The same way l admire Ross Brawn.
Good for the team, good for the sport, to have this security now.

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