Risky Business
The TWR Arrows Years 1996-2002


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"I can tell you they didn't. Instead, they promised that Arrows would be the best business."

That was the answer given at the start of 1999 by Scott Lanphere, a director of Morgan Grenfell Private Equity. He had been asked if MGPE had been lured into buying a 45% stake in the Arrows team by Tom Walkinshaw and colourful Nigerian Prince Malik Ado Ibrahim with the promise that Arrows would become the best team in F1. If any quote summed up the Arrows philosophy under Tom Walkinshaw Racing (TWR) ownership, there are few more telling one-liners. And perhaps it goes some way to explaining Arrows' demise during 2002, and ultimately TWR's receivership recently.

Grand Prix teams reflect the character of their owners. Ferrari demonstrates the Machiavellian passion of Luca Montezemolo, McLaren the ruthless professionalism of Ron Dennis, Jordan the flamboyance of Eddie Jordan, Williams the hard-nosed racers' edge of Frank Williams and Patrick Head, and Minardi the grit and determination of Paul Stoddart. Jaguar's bland mediocrity, on the other hand, reflects the rudderlessness of never having had a long-term team boss. But when it comes to Tom Walkinshaw, words like 'wily' and 'shrewd' have been used to describe him on more than a few occasions.

Tom W buries his head in his hands at Silverstone, 2002.

Walkinshaw took over Arrows in 1996, when Ricardo Rosset was underwhelming at the helm of one car. Walkinshaw took over Arrows in 1996, at the time when Ricardo Rosset was underwhelming at the helm of one car.

They are epithets that have aptly applied to Walkinshaw as a businessman, as a racer and as a manager. The Scot has never been a man to hesitate when an opportunistic deal has presented itself. Since the early 70s, Walkinshaw drove for Lotus and March in F3, and for Ford, BMW, Mazda, Rover and Jaguar in the BTCC and ETCC. In so doing he set up TWR to develop the Rovers and Jags, before the company spread its wings to build victorious Paris-Dakar rally machines, the legendary Jaguar sports cars, Holden V8s in Australia, Volvo super-tourers and even Jaguar XJ220 and Aston Martin road cars.

In terms of his Formula One involvement, Walkinshaw's curriculum vitae had only been slightly less varied. In the early 1990s he had become Engineering Director of the Benetton team, and was still in that role when Michael Schumacher won the 1994 World Championship. Benetton supremo Flavio Briatore then moved him to the Benetton-owned Ligier team for 1995, but one race into the 1996 season Tom fell out with the Italian and, with his associate Peter Darnbrough, bought a controlling 51% stake in the Arrows team instead.

Arrows had been competing in Formula One since 1978. Although better known, even by 1996, as the team with the most races under its belt without a single win, the team had also acquired the identity of being midfield survivors, never experiencing much by way of continuity in terms of drivers, sponsors or engine deals, but always doing enough to produce well-presented and competitive machines. But by 1995, after the Footwork organisation withdrew its support, and with the world still emerging from a recession, Arrows had fallen on hard times, and had had to rely on pay-drivers.

All of this meant that, potentially, Walkinshaw's takeover was a godsend, with the Scot's technical nous and business sense and the might of the TWR empire promising to take Arrows from perennial midfielders into the big league, which made the team's demise even harder to swallow. And what an embarrassing demise it turned out to be during the course of 2002, starting with Charles Nickerson and the Phoenix debacle, which in a rather unsubtle way was Walkinshaw trying to use his old pal as a front for getting his hands on the Prost money to rescue his own team.

Mika Salo at the wheel of the John Barnard-designed A19 in Japan in 1998. The A19 proved to be a radical and complex machine. Mika Salo at the wheel of the John Barnard-designed A19 in Japan in 1998. The A19 proved to be a radical and complex machine.

Then, as this grand plan failed and the Arrows finances became more fraught, there was the failure to participate in Friday practice, the farcical deliberate DNQ in France, the only time in recent memory that anyone actually tried to do that, and finally the team going AWOL altogether towards season's end. But, in hindsight, perhaps a wheeler-dealer like Walkinshaw was the last thing Arrows needed. His overly business-like instinct to snaffle up new deals from an engineering, driving and commercial point of view gave the team an instability which was no platform for achievement.

One undisputed reason for Ferrari's current success is that their engineering team of Ross Brawn, Rory Byrne and Paolo Martinelli has remained constant for many years, allowing them to refine and evolve their design philosophies, concepts and ideas. Witness on the other hand Arrows' revolving door of designers. Alan Jenkins penned the 1996 FA17 before leaving for Stewart, before Frank Dernie came up with the A18, the car that bore the expectations of success which lured reigning World Champion Damon Hill to the team in 1997.

The highly-regarded John Barnard came on board midway through 1997 and, as was his usual practice, he designed an expensive, complicated A19 for the new narrow-track groove-tyred regulations for 1998. But he too left the scene, and Arrows had to make do with an updated A19 for 1999. Iranian Eghbal Hamidy then conceived the brilliant, slippery A21 and A22, which was used to great effect in 2000 especially, until he departed in early 2001, before Sergio Rinland joined from Sauber and penned the A23, another aerodynamically-efficient machine, which turned out to be Arrows' last.

So Walkinshaw had no shortage of reputable designers, but he never held onto them for long. It meant that often the team began a new year with cars that bore no resemblance to their predecessors. That lack of continuity put the team at an obvious disadvantage, and a regular glut of early-season unreliability was testament to that. Moreover, he had an uncanny knack of bringing in a new man after the car had already been designed. Not surprisingly, the successor would have little knowledge of - and perhaps little enthusiasm for - the new car, with predictable effects on development throughout the year.

In 1997 Walkinshaw and Diniz were still getting on well. By the end of 1998 Arrows were taking the Brazilian to court. In 1997 Walkinshaw and Diniz were still getting on well. By the end of 1998 Arrows were taking the Brazilian to court.

Arrows also had a regular turnover of engine suppliers. In 2003, McLaren enters its ninth year with Mercedes as its engine partner. True, Mercedes is a large manufacturer whereas none of Arrows' suppliers were, but that stability has been vital for keeping McLaren near the top, especially since chassis can be conceptualised with the engine in mind. The advantage of such unity in design can never be underestimated. But in the TWR years, Arrows started with the underpowered Hart engine in 1996, before using the relatively powerful but not always reliable Yamaha the following year.

Then Arrows reverted to Brian Hart's engines for 1998, except that in a bizarre decision TWR actually bought out Hart's business and badged the engines themselves. Hart was impecunious to start with, and Arrows never had enough money to develop the engine properly, but persevered with it until the end of 1999. Then came the driveable Supertec in 2000 which matched the A21 perfectly, the free ex-Peugeot Asiatechs which remained gutless in 2001, and finally the fatally expensive Cosworths in 2002. All these changes were not a recipe for loyalty or committed developmental partnerships.

And there was a merry-go-round in the cockpit as well. Under Walkinshaw no Arrows driver had more than two consecutive years with the team, and not once did the team keep the same driver pairing for two years. Moreover, such was the acrimony and controversy that surrounded most of their drivers' tenures or departures, that in the eyes of the rest of the paddock it must have fostered a sense of distrust, or at least amazement at the insensitivity of Walkinshaw's man-management. Indeed, seven times during the TWR years did a driver leave the team with something of an axe to grind.

Jos Verstappen was the first at the end of 1996. As early as the Monaco GP that year (which, incidentally, was won by Olivier Panis for the Ligier team Walkinshaw had just left, whilst both Arrows of Verstappen and Ricardo Rosset crashed early), Walkinshaw had given him an ultimatum to re-sign for 1997, lest he be replaced by a pay driver before 1996 was out! In the end neither happened, and though Jos and his manager Huub Rothengatter aren't always the most tactful negotiators, it did nothing for the confidence of a driver who had already been tossed from team to team like a hot potato.

Soon after Walkinshaw left Ligier for Arrows, the French team won the Monaco GP, while both Arrows had crashed out early.

(Cartoon © Jim Bamber, Autosport, 1996).

Soon after Walkinshaw left Ligier for Arrows, the French team won the Monaco GP, while both Arrows had crashed out early.

Damon Hill was lured to Arrows not only by a healthy retainer but also by guarantees of competitive machinery. By the British GP, when he had barely recorded any finishes let alone points, Walkinshaw went into pot-calling-kettle-black mode, criticising the 1996 World Champion's commitment in the media even though the car was clearly below par and nowhere near expectations. He said: "Any professional sportsman is only as good as his last race. If money does not motivate you, then the fear of failure certainly should. It's an application problem and we need to sort it out."

True, Hill had not blown the doors off team-mate Pedro Diniz, the man who was effectively paying his salary. Indeed, Diniz kept pace with the reigning champion throughout 1997, and even out-qualified the Englishman at Spa. But Hill never received the credit he deserved for constantly trying innovative set-ups, and though he responded to Walkinshaw's criticisms with that sensational 2nd in Hungary and 4th on the grid at Jerez, he was clearly dissatisfied himself with how the Arrows was not the package promised to him, and before year's end it was clear that he was going to Jordan in 1998.

Mika Salo came over from Tyrrell to partner Diniz instead. They both scored points at Monaco, and Diniz also scored in the rain at Spa. But at the end of the year, Pedro himself left of his own volition, taking his funding to Sauber, much to Walkinshaw's chagrin. Arrows launched legal action against the Brazilian for an invalid termination of contract, a claim that was defeated in February 2002 after protracted proceedings. It served no purpose other than to drain the team of some valuable resources, as they were forced to pay Diniz $700,000, not to mention their inevitably hefty legal bills!

Salo, though, was hoping to stay with Arrows for 1999, and looked like doing so throughout the off-season until Walkinshaw's last-minute decision to drop him in favour of the moneyed Pedro de la Rosa. Although not entirely unexpected, the Scot won no fans by the way he kept the Finn hanging, during which all other seats had been filled. And even if Salo's dumping was a blessing in disguise, for it allowed him to take guest drives first for BAR and then for Ferrari as Michael Schumacher's substitute, the fact is that at the start of the season he had been left completely out in the cold.

Pedro Diniz snuck up on Damon Hill throughout 1997, and even out-qualified the World Champion at Spa! Pedro Diniz snuck up on Damon Hill throughout 1997, and even out-qualified the World Champion at Spa!

De la Rosa finished 6th on debut, but soon both he and his team-mate Toranosuke Takagi discovered that their A20 was a geriatric machine that was slower even than the Minardi. Verstappen then returned in 2000 to partner de la Rosa, and in a dramatic turnaround the A21 turned out to be the fastest car in a straight line all year. Particularly dynamite in race trim, thanks partially to a small fuel tank, both drivers were able to match it with the big guns from time to time. They managed four points finishes, although there could have been more, and at times even podium places were not out of the question.

But the Salo episode had set something of a precedent which Walkinshaw was not afraid to repeat. At the start of 2001, Arrows looked set to keep the successful pairing of Verstappen and de la Rosa for another year, before they plumped for Enrique Bernoldi's Red Bull money and got rid of the Spaniard, again at the last moment. To many commentators, this was a foolhardy decision, for de la Rosa had had the better of Verstappen in everything but the scoresheet. He had easily been one of the top 10 drivers of 2000, and many believed Walkinshaw should have kept him at all costs.

In what turned out to be tough 2001 in which the only joy came from Verstappen running 2nd in Malaysia and finishing 6th in Austria, Bernoldi's arrival did nothing for the ambience within the team. Jos the Boss called the Brazilian "the worst team-mate I've ever had", criticising him for his supposed arrogance. But in the end, however, Bernoldi got the last laugh when Verstappen became the third victim of Arrows' 'eleventh hour dumping' syndrome on the eve of the 2002 season, in blatant contravention of the fact that, as early as July 2001, the Dutchman had been re-signed for the following year!

Walkinshaw had been negotiating with Heinz-Harald Frentzen throughout the 2001-2 winter ever since it became apparent that Prost was unlikely to survive. With Bernoldi bringing valuable cash, Jos was always going to be the one to get the axe, but when it fell it did seem in particularly bad taste for the unfortunate Verstappen. It was the second time that Walkinshaw had dealt him a cruel hand, and quite rightly he took Arrows to court for breach of contract. His victory during 2002, and the winding up orders he sought, were vital in Arrows' downfall.

The superb A21 brought a temporary resurgence, with both Verstappen and de la Rosa dicing near the front and scoring points. The superb A21 brought a temporary resurgence, with both Verstappen and de la Rosa dicing near the front and scoring points.

Meanwhile back on the track, Frentzen made the best use he could of the competitive A23, and finished 6th in both Spain and Monaco. But eventually after the German GP, Heinz-Harald himself, who was on a race-by-race contract with the team, turned his back on them on not particularly amicable terms, having not been paid for his services as promised. He too instigated legal proceedings against the team, and combined with the pay-out to Diniz earlier in the year and the Verstappen litigation, it was a triple whammy that broke the camel's back.

Such wheeling and dealing in terms of designers, engine suppliers and drivers did nothing for continuity and progress. But at the crux of it all was the philosophy Walkinshaw took to running the team, treating it as a business in a rapid-moving marketplace, rather than as a racing team in need of long-term commitment and stability in order to earn results. True, it takes money to bring in the best people and keep them, but it is a fine line between making deals on one hand to maximise resources, and gelling all the ingredients together to help the team perform on the other.

It was a line that Walkinshaw did not tread well, and neither did Alain Prost. Walkinshaw's preference for making get-the-team-rich-quick deals led Arrows to make all those personnel and engine changes as exigency required, which hurt the team's results. Without results to attract further sponsors, the outfit depended more and more on business deals for funding, which led to more personnel changes as required and convenient, and so the vicious cycle continued. And when business went pear-shaped, especially in the worldwide slump, that was enough to send Arrows to the brink.

And for a man who had garnered a reputation for pulling off some extremely good deals over the years, a rather incredible number did go bad during Walkinshaw's time at the helm of Arrows. After Danka had come and gone as title sponsor, and Diniz had departed with his funds at the end of 1998, the first major shake-up occurred at the beginning of 1999. Up to that point Walkinshaw had owned 40%, Darnbrough 11%, and Arrows patriarch Jackie Oliver the remaining 49%. Now Oliver was bought out as first Prince Malik and then equity house Morgan Grenfell came on board.

The smiles soon disappeared for Walkinshaw and Malik once it became clear that the Nigerian prince couldn't deliver on his promises.The smiles soon disappeared for Walkinshaw and Malik once it became clear that the Nigerian Prince couldn't deliver on his promises.

Walkinshaw reduced his shareholding to 25%, with Malik holding another 25%, MGPE 45%, and the remaining 5% being for team employees. Morgan Grenfell insisted that they were not going to take an active part in the team, so what such a financial institution was doing buying into a Grand Prix team was not exactly clear, other than as an investment opportunity which had little relevance to the racing side of Formula One. Meanwhile the Nigerian prince, proclaiming himself to be the first black team boss in F1, was confident he could deliver funds through marketing his mysterious T-Minus brand.

By mid-1999 it was clear that Malik was unlikely to meet his promises. By the Hungarian GP he had left the scene, and by season's end T-Minus was no longer on the cars. Walkinshaw himself admitted that the involvement of the flamboyant prince had been a mistake: "We had to address the shortcomings and it was decided by everyone that the best thing was for Malik to resign and to bring in professional, full-time marketing people He came in thinking he could do a lot of things on the marketing and investment side which, at the end of the day, were not delivered."

So the Malik adventure was over, but Morgan Grenfell was still there in the shadowy background, and in fact was a lot less silent than many realised. As it turned out, Walkinshaw turned to the investment company to fill the funds void the Nigerian had left. To cover the shortfall, MGPE entered into a long-term loan with Arrows with a burdensome repayment schedule that yoked the team's budget, especially when that loan had to cover further losses that hit the team in the years to come, and eventually strangled their finances altogether during the debacles of 2002.

In addition, when Orange, Chello and Lost Boys all arrived as Arrows sponsors in 2000, so too came Eurobet, a Morgan Grenfell-owned betting company. MGPE also sold shares to German media company EM.TV, but those shares cost MGPE an astounding $365 million. Eurobet then suffered losses of $70 million in 2000 alone and immediately pulled out with two years of their sponsorship contract to go. So here was MGPE, whose own financial fortunes heavily impacted upon the team, but who had been drawn into F1 by the lure of a business opportunity and not any passion for racing or the sport in general.

The beginning of the end: by the 2002 British Grand Prix, Arrows' participation in F1 was in doubt. The beginning of the end: by the 2002 British Grand Prix, Arrows' participation in F1 was in doubt.

The arrival of Red Bull in 2001 brought with it some temporary relief, but just as Walkinshaw was negotiating with prospective investors for the following season, September 11 arrived along with the worldwide economic jitters it brought, and any interest those investors may have had were put on the backburner. Arrows were fast coming to the edge of insolvency, which would jeopardise their entry in Formula One altogether under the Concorde Agreement. Walkinshaw was forced to start funding the team out of his own pocket.

Arrows' funds shortage was exacerbated in 2002 by the need to pay for Cosworth engines, and by mid-April Walkinshaw must have been ruing the fact that he ever enticed Morgan Grenfell on board. He kept trying to find new backers, and Red Bull was interested in purchasing the team altogether, but MGPE vetoed all of them unless they were willing to buy out MGPE's 45% stake in the team. So with an angry unpaid engine supplier, a 45% shareholder strait-jacketing the team's finances, several lawsuits from ex-drivers, and no consortium able to buy out the team, Arrows hit the wall.

In the end, wheeling-and-dealing entrepreneurship and the resultant lack of commitment shown towards designers, engine supplies and drivers was not the way for Arrows to survive, let alone succeed. What Arrows needed most of all from Walkinshaw was some degree of financial and personnel stability that would allow the team to grow steadily. No team has ever been able to rise to zero to hero overnight. Walkinshaw ought to have known that. And yet the team lurched from desperate commercial deal to desperate commercial deal, the most ill-fated being the link-up with Morgan Grenfell.

It was an ignominious end for a team with a proud history, if not always a successful one. Indeed, one has reason to wonder if Walkinshaw himself was fully aware of exactly what he was trying to do, whether he was primarily attempting to fashion a competitive Formula One racing team, or endeavouring to run a profitable business, just one of many under his TWR umbrella. One suspects, sadly, that it was the latter, with success on the track as a mere afterthought. If so then it was a poor indictment on Grand Prix racing today. To so many, F1 is now business first, sport second.

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