Gene Haas got into Formula 1 for one very specific reason, and that was to increase brand awareness of Haas Automation around the world. On a North American scale he was doing just fine, but F1 could help the cause globally.
And it all started so well. The Haas F1 story kicked off spectacularly in 2016 when the team delivered incredible results in Australia and Bahrain, and although the team only scored 11 points over the rest of the season, its final tally of 29 shouldn’t be sniffed at.
The following year brought more progress as 47 points were picked up, although the constructors’ championship finishing position of eighth remained the same. And then came 2018, the first year of stability for Haas in terms of regulations, and the Ferrari partnership helped produce a car good enough for fifth overall and 93 points.
But since then it has seemed all downhill. The 2019 season yielded just 28 points , marking the beginning of a dismal three-year stretch, during which the team stopped updating the car in order to save money. Guenther Steiner openly admitted the priority over the past 12 months was keeping the team going.
“Sometimes survival is a racing strategy; just trying to survive,” is the last line I get out of Gene Haas as we discuss exactly where his team stands right now. But it sums up its recent past.
“I think up until 2019 we were really doing very well, and we had plenty of horsepower and the cars were very competitive,” he says. “But then we wound up doing fuel mileage races where we actually had to do a lot of lift and coasting, so that really hurt us. Then in 2019 we were down on horsepower considerably compared to the Ferrari cars, and that hurt. We did really well in qualifying, but when the race came, our horsepower was just off.
“Then in 2020 when Ferrari had a reduction in their horsepower, it was pretty obvious that all of the Ferrari engine cars had horsepower deficits compared to Mercedes, Honda and Renault. Our boat’s tied to the Ferrari ship, so when they’re going slow we’re going even slower – I don’t think there’s much you can do about that.
“We have no control over the parts that we obtain from Ferrari. We have faith that Ferrari can fix the problem, and not only does Ferrari have this problem, but so does Honda and Renault – everyone’s at a deficit to the Mercedes engine. They built an extremely high performance, high fuel efficiency, durable engine that no other team’s been able to come close to.
“To me, it’s really killed what Formula 1’s all about. More power to Mercedes for being able to dominate so much of the thing, but who wants to go to a race when you know who’s going to win every friggin’ race that’s out there? That just gets boring.”
Those words suggest frustration, but Haas is pragmatic about where his team stands in F1 terms. The COVID-19 pandemic could have spelled the end for several teams, but protecting Haas F1 – even at the cost of performance – was not a tough decision for the 68-year-old.
“It really wasn’t difficult,” he says. “Early on as a group we took the viewpoint that this COVID thing was going to be a bigger lockdown than when people said it was just going to be a few months and then go away. So we immediately shut down the spending monster of spending huge amounts of money, mainly because we weren’t going to be going to the races.
“The most expensive part of going to the races is usually freight and travel, so we shut a lot of that down almost immediately. We got a big saving there, and that was really helpful. So instead of us having a budget of $150 million, it went down to like $80 million and a lot of that… $35 million came from FOM and then more from sponsorship, so we actually did pretty good.”
Part of those savings were also achieved through the lack of an upgrade program, as Haas felt it wasn’t providing a valuable enough return to justify the amount being spent.
“I’ve always talked to the drivers, and I think in 2018 and 2019 we were spending between $20-40 million per year for these updates, and every time I talked to the drivers it was like ‘Well, that didn’t do anything!’” he says. “So why are we spending all this money on updates?
“That is one of the things we eliminated pretty quickly, was doing all these updates, because I was pretty convinced we weren’t going to do any races. I thought at best we would do four or five races, so bringing all these updates for a very short season wouldn’t work. But ultimately we got a lot of races in. We didn’t really bring any updates per se – and I’m not really sure who did bring a lot of updates – but from a practical standpoint, they didn’t seem like they really improved the car much.”
Although Haas fears the budget cap being introduced from this season in F1 might actually limit the ability for smaller teams to invest and reach the same level as the bigger outfits, he very much has his business hat on rather than his racer’s one when he looks at where his team is heading.
“I’m optimistic about the future,” he says. “I know that this year’s going to be difficult because we basically have the same car as last year, and the power plant from Ferrari is going to be very similar to last year, so we know that’s not going to give us any competitive advantage. So I think that we have the mindset of realizing our position is always going to be probably three of four positions behind Ferrari. It kind of tells us where we’re going to be racing.
“And that’s OK, this is Formula 1, the pinnacle of motor racing. We know we’re not going to be beating any of the Mercedes teams, so we just have to take what we have and learn to make the best of what we’ve got, which isn’t bad. This whole sport is a lot more than just the engineering challenges and the engine development and all that stuff, it’s also participating in races and drivers and the whole other aspect of the glory of Formula 1 racing. Which is fun!”
Part of this optimism comes from the way Haas was able to run in 2020, still picking up a few points despite being hamstrung by the Ferrari power unit. The outlay had been reduced and the team made more efficient, meaning its owner was willing to sign up to the new Concorde Agreement and commit to the sport.
“When we got in the middle of the global pandemic last year, Guenther (Steiner) and myself came to an agreement on ‘OK, how much money do we actually want to spend on this?’” he says. “I actually set a very lean budget, and quite frankly we actually scored more points (relatively) with a smaller budget than we did with a bigger budget. I just feel like maybe it was eating too much, and sometimes being leaner, you can produce more results.
“So we leaned everything down, and we came up with a figure that I was comfortable with, and Guenther agreed that he could work within that. We changed our focus a little bit, we do have some well-backed drivers and I think from a financial standpoint we’re very stable. That’s what I’m looking forward to. With the cards that have been dealt, we can’t sit there and win any hands here or bid up the pot, so our position is basically to hold on and see what the future holds.
“We’ve got a lot of things changing in 2022 and 2023, so we’re in holding-type mode of, let’s see what we’re going to do here. But we’re also very financially stable. I didn’t have to mortgage my real estate or my race shop or any of that stuff. We’re not doing what some of the other teams do and mortgage everything they have to go racing. We’re just operating on the money and budgets we have, and we can do that very successfully. So that guarantees us that at least we will be around for the next five years.”
And through that management approach, Haas feels like he’s in a strong position. Despite specific contrasting incidents of Romain Grosjean’s lucky escape in Bahrain and Nikita Mazepin’s actions on social media towards the end of last year, the overall reason for owning an F1 team continues to provide the return the Ohioan hoped for.
What’s more, Haas is now in a place where he feels in stable in the sport, with a business model that works for him and in control one of the valuable franchises that are signed up to race for the foreseeable future.
“From a business standpoint, being in Formula 1 has been extremely successful as far as promoting our brand name,” he says. “It’s a great sport to be in, because there’s no other sport like Formula 1, and there’s a lot of excitement. We’ve brought a lot of customers to races, and I hope that Formula 1 can continue to bring that kind of prestige and excitement to races, because let’s face it, sports are a big part of a lot of people’s lives. Auto racing has been around for, like, 120 years, so I think it’s something that I would like to see continue, and certainly want to be part of it.
“A satellite team? Yeah, we want to be the best satellite team we can be. Do I want to take the investment and try and duplicate a Mercedes, Red Bull or McLaren? No. Because first of all the budget cap won’t let you do it, so you can’t do it anyway! So the best we can hope for is to be fundamentally a good satellite team, and to have a strong relationship with the team we’re satellite team to, which is Ferrari.
“Ferrari is obviously a huge name in automobile racing and it’s great to be aligned with them, but I don’t think I ever have any expectations that we could ever beat a Ferrari straight up, because their cars are always going to be better than anything we can build. That’s our lot in life, and I have to live within that, and I can do it fine.
“It makes a business, it’s not as expensive as it used to be. I think with the budget cap and the deals I’ve cut with Guenther and so forth, we’ve come up with a budget that is very sustainable and doesn’t require hocking all of my assets in the world. I don’t have any loans at all actually, so going forward we can stay in Formula 1 as long as we want, and that’s kind of where I want to be at the moment.
“Going forward in 2022 and 2023, maybe doors will open. Maybe things will happen. Maybe some of the big teams might call it quits. This whole electrification of the whole automobile industry is going to be very upsetting to the tried and true conventional builders of cars, so you never know when one of them might pull out and there might be some opportunities to do something else there. So who knows…”