Bridgestone F1 Withdrawal Highlights Spec Tire Risks

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After the final Formula One Grand Prix of the season, at the beautiful but bizarre Yas Marina circuit in Abu Dhabi, a surprise announcement was made. Bridgestone, the sole tire supplier for car racing's premier class, announced that they would be pulling out of that role at the end of their contract period, the 2010 Formula One season. The statement quoted "the continuing evolution of the business environment" - probably code for the global economic crisis - as the main reason for the withdrawal, as well as having achieved the goals the company had set itself for in terms of raising brand awareness and recognition.

The company emphasized that the withdrawal from Formula One would have no effect on the other series they supply, including MotoGP. But the statement by Bridgestone holds clues to the danger of a single tire series, and the good reasons to fear that the Japanese tire manufacturer could consider pulling out after its contract to supply MotoGP expires at the end of 2011.

The Bridgestone statement reads:

Bridgestone Corporation (Bridgestone) today announced that it will not enter into a new tire supply contract with the FIA Formula One World Championship (F1) series; the current contract is set to expire at the end of the 2010 season.

In addressing the impact of the continuing evolution of the business environment on its decision, the company focused on the need to redirect its resources towards the further intensive development of those innovative technologies and strategic products which support the company's goals and further enhance the company's reputation as a technology leader.

Over the years, the company has benefited directly from its involvement in Formula One racing. The lessons learned through Bridgestone's successful participation have translated into innovations that can be applied to the design and manufacture of tires. In addition, its collaboration with F1 has contributed to increased brand awareness and the recognition of Bridgestone as a leader in the global tire industry. Having achieved these goals, Bridgestone is now poised to take its technological and brand building efforts to the next level.

Bridgestone is committed to supporting F1 and the series' teams through the completion of the 2010 season. The company also expressed its sincere appreciation and gratitude to the management of Formula One, the F1 teams and support staff, and the F1 fans around the world for their enthusiasm and support for Bridgestone over the last 13 years.

There are a number of phrases that are cause for concern to MotoGP fans. The most disturbing is that pulling out of Formula One will allow it to "redirect its resources towards the further intensive development of those innovative technologies and strategic products which support the company's goals and further enhance the company's reputation as a technology leader". The implication here is that supplying tires in a spec tire series is not a credible basis for promoting your company as involved in technological innovation. With the competition removed, the brand exposure generated is devalued, an accusation which is particularly painful in a series which is marketed as the technological pinnacle of a motorsports discipline. 

This is not a problem that faces spec tires suppliers in production-based series. After all, Pirelli (in the World Superbike and British Superbike series) and Dunlop (in the AMA series) can claim that they are using racing of production motorcycles to develop tires suitable for the street versions of the bikes being raced. The justification for the existence of pure prototype series such as MotoGP or Formula One is technological innovation forged in the heat of competition itself. A spec tire does not sit well with that image of prototype racing, regardless of the many benefits a spec tire may have on a series.

However, in the end, the issue is still likely to come down to one of cost. Right now, Bridgestone supplies tires at considerably less than cost to the MotoGP teams, and must justify those costs internally as a marketing exercise. If market conditions tighten, or marketing and company goals change, the reason for being the sole supplier to a particular series can easily disappear, as Formula One has now found to its cost.

For more background on the repercussions for Bridgestone's withdrawal on Formula One, see the story on the outstanding Formula1Blog.com website. Formula1Blog.com are friends of MotoMatters.com, and are highly recommended, providing excellent insight into the world of four wheel racing, for those of you that are interested.

After the final Formula One Grand Prix of the season, at the beautiful but bizarre Yas Marina circuit in Abu Dhabi, a surprise announcement was made. Bridgestone, the sole tire supplier for car racing's premier class, announced that they would be pulling out of that role at the end of their contract period, the 2010 Formula One season. The statement quoted "the continuing evolution of the business environment" - probably code for the global economic crisis - as the main reason for the withdrawal, as well as having achieved the goals the company had set itself for in terms of raising brand awareness and recognition.The company emphasized that the withdrawal from Formula One would have no effect on the other series they supply, including MotoGP. But the statement by Bridgestone holds clues to the danger of a single tire series, and the good reasons to fear that the Japanese tire manufacturer could consider pulling out after its contract to supply MotoGP expires at the end of 2011.The Bridgestone statement reads:

Comments

Are you sure that a spec

Are you sure that a spec tyre is any less relevant to a tyre manufacturer as a marketing tool than an environment where there are more than one player?

For years in the 500cc wasn't it a de-facto one tyre series? Likewise with World Superbike in the late 90's. If you didn't have the Michelins, you were at an instant disadvantage.

Bridgestone may be supplying tyres at less than cost currently, but with no real competition (in the form of Michelin) their costs are a known. There is no sudden technical breakthrough that requires an instant (and expensive) response. They know what tyres they need to make for the year and, given that they are all the same type, they can be made at a more predictable cost. Before, they'd make one type of tyre for Ducati, one for the Kawasaki, another type for the Suzuki. All these required different constructions, reducing the opportunity to make savings through scale.

I also don't believe that Ducati would have been paying the true cost of their tyres and the constant development required. Again, with the same construction for all the teams with only compound changes being the real difference and no real 'factory backed' team, although they may still be losing money on the deal, it should be a known amount.

As for spec tyres being ok for production based series but not for prototypes? 125's and 250's are pure prototypes, but the last time I checked the only tyre available is a Dunlop. It may not be a spec tyre, but at that price point in those classes, I would think that there isn't a lot of difference between the available tyres and this association doesn't seem to hurt Dunlop in any way.

If Bridgestone were still fighting with Michelin in F1, I think the current financial situation would still have left them to consider their future. F1 is a great sport, but cheap it is not. When they are closing factories and laying of 000's of people (as they have done here and in NZ), it's a brave MD/CEO who explains to his sacked staff that the corporate excess that is F1 is more relevant than their jobs.

Total votes: 30

The Difference is Competition

You are absolutely correct that for years, the 125cc and 250cc classes, the 500cc series, and even World Superbikes were de facto one make series. However - as Bridgestone proved so capably - they were one make series only because no one else chose to compete. Once Bridgestone entered MotoGP, and especially once the rules changed preventing Michelin's Saturday Night Specials from being shipped in for a few selected riders, competition returned in full.

To put it another way: In 2000, Michelin could claim to be world champions because their product was so good that nobody dared to challenge them. In 2006, they could claim to be world champions despite the strong challenge from Bridgestone - an even stronger marketing message. In 2007 and 2008, Bridgestone could claim to have challenged and beaten Michelin, the former world champion tire maker. In 2009, they can claim what? To be world champion because they won a bidding process which Michelin wasn't even interested in entering?

Your points are all excellent, and very well put, and all remain valid. Cost is certainly a concern, and having a stable, one-make championship means that the tire supplier has a predictable cost base in which to operate, and one in which they have the rate of progress and investment in R&D in their own hands. Those are all very good reasons to remain in the championship, especially one that has such a strong brand recognition as MotoGP.

My point, however, is merely that another powerful reason for competing in any form of sport regarded as the technological pinnacle in its discipline disappears when competition in a particular aspect is removed. The argument that competition at the highest level is helping to drive Bridgestone's R&D - an indisputable fact during the years the company competed with Michelin, and part of the reason for their success in beating the French tire company - loses much of its credibility as a supplier to a single make series. That is one powerful marketing tool which is lost to the company's marketing department, though by no means the only one. There are of course plenty of others left, and whether a company decides to continue to support a series depends entirely on where their marketing focus lies.

Total votes: 31

Wow...

Wow David, I love your site and respect you as a first rate reporter on the best sport in the world (motorcycle racing), but you're WAY off when it comes to your take on this tire competition. I see you as someone clinging to an irrelavent ideal. Haven't we seen enough evidence (via F1, WSBK, & MotoGP) that a tire competition actually hurts the racing rather than helps it?? I just can't agree with you on this because at the end of the day, these sports are not about the friggen tires or tire manufacturers. It's about the riders & motorcycle manufacturers!!! You're blind to reality if you think the tires are just as important as those two.

Total votes: 22

Not my point

The point I was making was not whether a one-make series is better than a series with open competition or not (you make the case for that argument very well, there is a good case to be made against it also), my point was that the competitive element may be a reason for a company to support a racing series. There are a lot of benefits to companies in taking part in a series with competition, the most powerful being the speed of R&D, which soon trickles down to consumers. Take the competition away, and you take one reason away for a company to participate.

That being said, there remain a number of reasons to stay in the series, including brand exposure. However, when the only person you are beating is yourself, you cannot use the argument of being the best in the world as a marketing tool. I was highlighting a risk, rather than making an argument either for or against.

Total votes: 31

For all those...

...who wanted a one-tire series, how about a zero-tire series?

I confess to being surprised (but not shocked) by this.  I had inferred that Bridgestone was willing to take the spec-tire deal with MotoGP with the largesse provided by the deal with F1.  Obviously, that was either incorrect, or limited in duration.

Without doubt, this is a pushback against the two series.  What will the series do?  Obviously the first call is to Michelin.  After they hang up the phone, Michelin will have worked on polite wording for:  "So, if we have this right, we weren't good enough for you two years ago, but now you need us?  Since our money was no good to you then, it's going to cost you now..."  Bridgestone got in to both sports to compete, not to win a bidding battle.

Beyond that, the idea of future costs being fixed and "no technological breakthroughs" is not accurate.  They cannot afford to simply rely on past engineering and make all of their product "off the rack".  Too many situations either haven't been experienced yet, or weren't accounted for, so they must continue to develop, even if not at the same pace as when competing against a rival.  Examples:  1). there should be more than just 2 tracks with the asymmetrical rubber compounds, 2). all of the GPs in the U.S. since 2005 remind us the weather is not as predictable as people think, 3). there is always hope for new circuits, and 4). quality control problems. 

Riders, manufacturers, and fans will all resent the notion that the spec-tire manufacturer should cease to improve their product, just because the cost-saving contracts state that they can.  This should serve as a life lesson about all monopolistic endeavors.

Total votes: 31

Some excellent points and

Some excellent points and counter points made by cejay and David respectively. But one quote always rings in my head when the tire debate comes to the fore... King Kenny said (paraphrased), people will cheer for a rider, people will cheer for a brand (manufacturer), but no one cheers for black rubber doughnuts.

I like everyone on the same tire, limits the variables to the things we actually care about (riders & bikes). And someone will make the black doughnuts one way or another...

Total votes: 34

The defacto one make series

The defacto one make series wasn't good because Michelin was only giving the 'special' delivery tyres to one or two guys. The riders further down the feild on nonfactory machines got less support and were at a bigger disadvantage.

That said, when 2 makes of tyres were going head to head it was great. Michelin would have sorted out there problems eventually.

Total votes: 39

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