WOKING, England // McLaren’s partnership with Honda has not worked so far and the team are now approaching a "fork in the road", executive director Zak Brown said on Wednesday.
Speaking to Reuters in his office at the Formula One team’s headquarters, Brown said that a parting of the ways was a real option under consideration by management.
The American said engine upgrades promised for this weekend’s Canadian Grand Prix were not ready and the Japanese manufacturer could not say when they might be.
And while McLaren still wanted to win championships with Honda, there were serious concerns as to whether that was achievable.
"Honda’s working very hard but they seem a bit lost," said Brown, who replaced Ron Dennis at the helm late last year. "We were only told recently that we wouldn’t have the upgrade coming [for Montreal] ...a nd we don’t have a definitive timeline, which is concerning because the pain is great and we can’t sit around forever.
"We were eagerly awaiting this upgrade as were our drivers and it’s a big disappointment that it’s not coming. It’s not lack of effort, but they are struggling to get it to come together."
McLaren, the second oldest and most successful team in Formula One after Ferrari in terms of race wins, are the only ones yet to score a point this season.
They have not won a race since 2012.
The renewed partnership with Honda in 2015 was billed as a return to the glory days, when French great Alain Prost and the late Brazilian Ayrton Senna dominated the late 1980s and early 1990s.
Instead it has brought failure and embarrassment to the former world champions, whose cars have failed to finish races – and sometimes even start them – due to engine failures.
Spanish driver Fernando Alonso, a double world champion whose future is uncertain, said in March that "we have only one problem, and that is the power unit. There is no reliability and there is no power."
McLaren were ninth in 2015, sixth last year and this season could become their worst ever.
MARCHING ORDERS
"The executive committee have now given us our marching orders," said Brown, who is also chairman of the fast-growing Motorsport Network media group. "We’re not going to go into another year like this, in hope.
"I don’t want to get into what our options are. Our preference is to win the world championship with Honda. But at some point you need to make a decision as to whether that’s achievable. And we have serious concerns.
"Missing upgrades, and upgrades not delivering to the level we were told they were going to, you can only take that so long.
"And we’re near our limit."
McLaren have sounded out former partners Mercedes about a possible supply of engines, according to unconfirmed reports.
"It will all come together," said Brown, who said there were some big decisions to make in the next 90 days with the team needing to plan for the new car and give Alonso a reason to stay. "There’s lots of things that go into the decision and we’re entering that window now of ‘which way do you go when you come to the fork in the road’."
Brown said the decision to partner with Honda in what has so far been an exclusive deal was "100 per cent right".
"However, so far it hasn’t worked," he said. "A year in Formula One is an eternity. Three years is a decade. And you just can’t go on forever."
Honda spokespeople were not immediately available for comment.
Brown said there were clear advantages in a "works" partnership but pointed to Red Bull Racing and 2009 champions Brawn GP as examples of "customer" teams that won titles.
"Do I think you can win with a customer engine? I think you can," he said.
Honda contribute more than US$100 million (Dh367m) a year to McLaren’s budget, according to informed sources, and some have questioned whether the team can afford to lose such sums.
Brown said the reality was that McLaren had lost some big, long-term sponsors and significant prize money in the past three years.
"When you actually look at the impact of loss of FOM [Formula One payments] money and loss of sponsorship, it starts to diminish the commercial benefits of what Honda brings to the table," he said.
"And when you start to net it out, it doesn’t have quite the commercial benefit it might appear from the outside."
* Reuters
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UAE currency: the story behind the money in your pockets
RACECARD%20
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S23%20ULTRA
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The%20specs
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Punchy appearance
Roars of support buoyed Mr Johnson in an extremely confident and combative appearance
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