Hamburg - The Cosworth company is set to build a standard engine for Formula One teams as part of a major cost-cutting scheme, the ruling body FIA announced on Friday. The announcement, made in a letter by FIA boss Max Mosley to all teams, came just hours after Honda announced its withdrawal from F1 racing due to the global economic crisis.
The news from Japan sent shockwaves through the sport but seemed to confirm the urge of Mosley and the sport's commercial area boss Bernie Ecclestone that spendings must be slashed as soon as possible.
Mosley said in the letter that the standard engine would help "enabling the independent teams to survive in the current difficult economic climate ... stabilising Formula One ... (and) avoiding any change to the Formula One spectacle and keeping the technology at current levels."
The British company Cosworth was chosen for exclusive talks with FIA at the end of a tender launched last month for a standard engine and transmission supplier for three years 2010-2012. The transmission is to be provided by Ricardo Transmissions.
Mosley said that engine costs could be slashed from around 20 million euros (25.4 million dollars) per team presently to 6.42 million euros per year and team from 2010 onwards, plus a one-time payment of 1.97 million euros.
The basis of the calculation is that four teams agree to use the standard engine. More money can be saved if more teams sign up.
Mosley said that teams can also build the engine themselves at the same costs or "the right to continue to use their existing engine, with the current ban on development and requirement for engine parity still in place."
The final go-ahead for a standard engine lies with the FIA world council which meets next week in Paris.
The teams, through their umbrella organization FOTA headed by Ferrari boss Luca de Montezemolo, met with the FIA on Thursday for talks.
Manufacturers including Ferrari, Mercedes and BMW have so far rejected the standard engine. But di Montezemolo said that the teams could cut engine costs to around 5 million euros by 2011.
