Luxury automotive, motorsport and technology company McLaren Group has raised additional equity to support its long-term strategy. The Group has also confirmed Paul Walsh as Executive Chairman.

The existing, long-standing shareholders have provided £300m of equity to support the group and McLaren’s commitment to the brand’s strategy.

Paul Walsh brings a wealth of business experience to McLaren having worked at the FTSE 100 listed drinks company Diageo for more than 30 years, 13 of which he spent as Chief Executive Officer.

After successfully leading the reintegration of the McLaren Group, Shaikh Mohammed Bin Essa Al Khalifa, will become non-executive director and continue to support the Group’s ambitions.

Mr Walsh takes up his position at McLaren Group with immediate effect.

Paul Walsh, Executive Chairman, McLaren Group:

“I’m delighted to take up the position of Executive Chairman at McLaren Group, a remarkable British-based company that has built a reputation through a unique combination of modern luxury products alongside leading-edge technology applied on the racetrack and in businesses around the world.

“Shaikh Mohammed Bin Essa Al Khalifa has led a vital reintegration of the Group and I’m now looking forward to get working on the next phase of McLaren’s development.”

Shaikh Mohammed Bin Essa Al Khalifa, Non-Executive Director, McLaren Group:

“On behalf of all the shareholders, the Board and more than 4,000 talented people who work for McLaren around the world, I’d like to welcome Paul to the Group. He brings with him a vast wealth of experience which will be invaluable to the company.”

McLaren has announced that it will produce just 249 examples of the ultra-exclusive Elva speedster, down from a planned 399 units.

The decision, confirmed by CEO Mike Flewitt in an interview with The Australian Financial Review, is said to have been taken as a means of enhancing the car's rarity value. "The feedback from our customers is that they think the car should be more exclusive than that, so we’ve capped it at 249," he said.

Autocar's sources suggest, however, that McLaren over-estimated market demand for the model, hence the decision to reduce production numbers. The similarly conceived Aston Martin Speedster is limited to 88 examples, while Ferrari will build just 250 examples each of its SP1 and SP2 Monza roadsters.

McLaren Formula 1 drivers Carlos Sainz Jr and Lando Norris volunteered for a pay cut as the team became the first to commit to furloughing staff amid the coronavirus crisis.

F1 and its teams are discussing how to protect themselves amid the financial pressure caused by the global COVID-19 outbreak, which has cancelled or postponed the first eight rounds of the 2020 season and threatens to impact more.

Wider measures, including delaying new technical rules to 2022 and rolling over most of this year’s car designs to 2021, have already been taken to shore up the medium-term future of the respective teams.

However, McLaren is the first team to take short-term action to protect its staff.

It will take advantage of the UK government’s coronavirus job retention scheme which allows employers to pay the lower of 80% of an employee’s regular wage, or £2,500 per month.

Though it is not clear how many staff will be placed on furlough, McLaren has confirmed to The Race that the process will be undertaken across the company.

The process could last three months. It is unclear when the F1 season will resume – the first race still on the schedule is the Canadian Grand Prix but its mid-June date appears unlikely to remain.

Staff members who are not furloughed, from McLaren’s executive tier down, will take a pay decrease. This includes CEO Zak Brown and its F1 drivers.

The Race understands Sainz and Norris, who joined the team last year, volunteered for reductions in line with other staff when they were informed of the situation.

“The McLaren Group is temporarily furloughing a number of employees as part of wider cost-cutting measures due to the impact of the Covid-19 pandemic on its business,” a McLaren statement given to The Race read.

“These measures are focused on protecting jobs in the short-term to ensure our employees return to full-time work as the economy recovers.”

F1 teams face a serious threat, especially smaller organisations, because the prize money they receive from F1 is a big part of their income.

That prize money is taken from F1’s overall revenue, which is set to be reduced dramatically because of how many races are going to eventually be cancelled. Fewer races will also mean reduced sponsorship and TV broadcaster income.

No other team has taken the same action as McLaren yet, although it is expected.

Red Bull team boss Christian Horner told the BBC earlier this week “we’re looking at what the government have communicated” and that “all the HR managers between the teams are talking so there is as much consistency as possible”.

F1 is in the midst of establishing other cost-cutting measures in the short- and longer-term.

There are discussions about lowering the $175m cost cap that will be introduced next season, although that appears to still face opposition from some teams.

In the short-term, Racing Point’s Otmar Szafnauer has targeted a potential saving of up to £30m if the revised 2020 calendar is slashed effectively in half.

“Some of the costs are sunk already and we’re looking at how much money can we save if we only do a 10 or 12 race season,” Szafnauer told Sky.

“Every team’s different. I still think we spend the least out of everybody.

“I think we can save in the region of £25m to £30m if we only do 10 or 12 races.”

"While we're a well-funded racing team," he said, "everyone has their limits - and as it relates to F1, it is no secret we lose a lot of money and my shareholders want value creation out of F1. So just letting the losses widen is not an option.

"I don't have an unlimited cheque book, so it was the responsible thing to do, and quite frankly I am disappointed but not surprised that many teams haven't already followed suit.

"I know some have, but some haven't. And I think there is a real danger in F1 that we as an industry can put our head in the sand on topics and now is not the time to put your head in the sand."

McLaren Formula 1 boss Zak Brown says Ferrari and Red Bull are “playing with fire” if they block a dramatic reduction of the budget cap being introduced next year.

F1’s 10 teams are broadly in agreement to reduce the cost cap from $175m as planned to $150m as part of a raft of measures being introduced to help the championship navigate the financial impact of the global health crisis.

But Brown has proposed a limit as low as $100m, with a compromise of around $130m considered fair, which other teams support but Ferrari and Red Bull pushed back on.

They argue that bigger teams should be afford a higher cost cap because they have to incur R&D and infrastructure costs to manufacture parts that smaller teams buy from them at a lower price.

“Without 10 teams, or at least nine teams, you don’t really have Formula 1,” Brown said in a Sky Sports F1 interview.

“It’s really a couple teams that need to be very careful, because I think they’re kind of playing with fire, so to speak.

“It takes a full grid to have a sport.

“So if they continue to have the sport be unsustainable and a couple teams lose interest or financially are not able to participate anymore, then they’re going to be racing against themselves.”

He did not name Ferrari and Red Bull specifically, but Mercedes is known to be willing to go below $150m if it is an effort to make meaningful savings for all teams and not just competitive opportunism.

Brown also made it clear which teams he was referring to when he praised Mercedes’ parent company Daimler for doing “an excellent job recognising the situation that we’re in, so you can deduct who the other two teams are”.

He added: “It’s a marketing platform for those two teams so I understand why they want to keep the fiscal balance where it is now.

“But in sport you kind of want to think everyone can fight fairly and may the best team win.”

Mercedes and Red Bull won every title available in the previous decade, with McLaren’s last championship coming with Lewis Hamilton in 2008.

It has not won the constructors’ title since 1998 and slipped in competitiveness since its last victory in 2012, thanks to a combination of the rise of Mercedes’ works team, an ill-fated partnership with Honda and McLaren’s own shortcomings.

However, McLaren is optimistic its recent recovery under the team leadership of Andreas Seidl will help it re-establish itself among F1’s elite, and Brown believes the likes of Ferrari and Red Bull should have the “confidence” to take others on with an even financial playing field.

“It’s like a heavyweight who only wants to fight middleweights,” he said. “Come on.

“These are great teams, they should be prepared to fight everyone on more equal terms and I think that’s what fans want in sport.”

Brown pointed to the domination of F1 in recent years from Mercedes, Ferrari and Red Bull, which have won every race between them since Kimi Raikkonen’s 2013 Australian Grand Prix victory for Lotus, and the reliance on chaotic races to make F1 unpredictable.

He compared that to how IndyCar’s spec chassis allows for more varied race winners and podium finishers, but does not stop the best teams dominating the championship.

“We shouldn’t have to rely exclusively on [major variables] to have an unpredictable race,” said Brown.

“It should be that one of the teams that isn’t an A-team can have a better strategy or catch the safety car at the right time, or capitalise on someone having a bad pitstop.

“If you ask the fans, which is who our ultimate customers are, they want to see races like Brazil and Germany [in 2019].

“We shouldn’t have to rely on torrential downpours to create that level of excitement.”