“The mechanism needs to be reviewed”- Italian pandemic decree compels Ferrari boss Mattia Binotto to request considerations in the budget cap.
Because of the losses incurred to Formula 1 teams, it was unanimously decided that there would be a budget cap of $145 million for the 2021 season, and would be increased in the following seasons.
Though there are a lot of things excluded from the budget cap list, like the salary of the driver, still the big 3 teams of F1- Ferrari, Mercedes and Red Bull cross their budgets by $400 million.
Ferrari, according to Forbes, spends close to $570 million in Formula 1. Nearly $100 million of that is dedicated to staff, with the combined salaries of drivers Sebastian Vettel and Charles Leclerc accounting for nearly half of that figure.
However, things over here gets complicated for Ferrari, as the newly introduced decree by the Italian government prohibits layoffs in the pandemic until they terminate their operations.
An Italy based company can only lay off employees if it “permanently ceases operations through liquidation, declares bankruptcy without temporarily continuing operations, or enters inter a collective agreement with unions aimed at encouraging voluntary employee separations.”
Mattia Binotto asked for consideration
With so much of sum going into the staff, Ferrari is now under a fix as their national guidelines don’t allow to make cost-cutting by shelving people off the company. Hence, Mattia Binotto has urged for a review.
“Knowing that the COVID situation, the fact that it has been very difficult to dismiss people, to lay off people in that period,” Binotto said on Friday in Bahrain.
“Knowing that as well in terms of message, it would be completely wrong, I think, to lay off people when we are in such a COVID pandemic situation, and I think the fact that the pandemic is not finished and we still have now, let me say an emergency matter.”
Binotto hopes that the FIA and Formula 1 at least takes another look at the budget cap in terms of personnel until the pandemic has subsided.
“The mechanism needs to be reviewed, and eventually we should try to postpone that mechanism, eventually by the end of the year,” Binotto said.
“I think that, again, like social responsibility, it would be again, very bad to business people during the COVID, and knowing that we need to do it very soon, we don’t believe that would be the right approach—so it’s something on which I’m very keen and I would like and I will discuss with FIA to understand, and with the other teams, is there any possibility to accommodate what is still an emergency situation?
“That’s on one side. On the other side, as you said, how are we organizing ourselves. Obviously, we were trying to restructure our whole team. We’ve got somehow…we are trying to reallocate people on the road cars because we are still a very big company.”
“These are some opportunities we’ve got, but it’s a difficult exercise on which we have started. The solution is not obvious,” he concluded.