Features - Financial
FEBRUARY 1, 1996
The future shape of F1 teams
BY JOE SAWARD
It goes against all conventional F1 logic - which says that F1 is no longer a sport, but rather a light industry; miracles do not happen; new teams do not win races. To be competitive one needs to invest time and money to construct a manufacturing infrastructure with which to challenge the big teams. The only problem is that the big teams invest more every year and so catching them is a tough enough task, overtaking them is almost impossible unless they make mistakes.
Long gone are the days when the best F1 teams featured a good manager, a good designer and a handful of mechanics. A look in the history books shows that top teams needed dynamic duos like Brabham's Bernie Ecclestone and Gordon Murray; Williams's Frank Williams and Patrick Head and McLaren's Ron Dennis and John Barnard. In the mid-1980s, however, the characters were replaced by infrastructures and within a few years Grand Prix teams became specialist engineering companies, with specific departments looking after different areas of the car. Chief designers and technical directors do not now actually draw any of the car. It is now impossible for one man to do the work necessary. The design and build of the average F1 car in the 1990s takes 3500 drawings and around six months. In F1 there is no such thing as mass-production. Each car is a handmade prototype, which needs around 1000 hours of laminating work by highly-skilled and highly-paid specialists.
Today the F1 technical director will spend most of his time behind a desk. He will have a chief designer to oversee the design and build of a car. The technical director and the chief designer may do some concept work on the design - with input from the research & development departments - but the actual drawing will be done by a small army of detail designers. There will be a gearbox design engineer; a rear suspension designer; a front suspension engineer, a composite engineer for the chassis and a systems engineer for the electronics.
The chief designer coordinates all this work. He inspects the work of others and chases up the production departments and suppliers to make sure that everything is finished on time and that all the parts fit together.
If the process works correctly the process of designing and building a chassis starts with a concept, fans out into parallel design groups and manufacturing processes and comes back together again as a single product - which should reflect the original idea.
Building the chassis, however, is not really what takes the time. The build programme is entirely process-dependent. It takes a fixed amount of time to machine the buck and laminate the moulds. Some teams cut the lead times by working in shifts around the clock but this is expensive and depends on the industrial capacity of a team - and the quality of the organisation.
There are some who argue that the more money and the more people you have the more success you will have. As Ferrari and McLaren have proved in recent years this is not true. Efficiency is a strong weapon for the middle-sized teams. They have to make the most of their budget and how best to use their manpower. This can take a variety of forms. A lot of teams suffer because of production backlogs which delay testing and development programmes. Tyrrell, for example, has recently revamped its entire production system. The team no longer has to wait for new parts. This means that the team now designs and builds more parts. These parts are correctly made and arrive on time which means that testing is more easily scheduled and that improved both performance and reliability.
A small team can arrive in F1 and make an impact if they make a great car with a good engine. But not many small teams can survive after they have build a bad car. Having the correct infrastructure when things go wrong is vitally important. If one builds a bad car but can improve it, one has more chance of keeping sponsors and achieving results - as McLaren showed last year.
The problem for new teams is that to build such an infrastructure is enormously expensive unless one has backing from huge and very loyal sponsors. New teams rarely do.
In the last 10 years, in fact, only two new F1 teams have managed to keep going: Sauber and Jordan. The Swiss enjoyed enormous backing from Mercedes-Benz which enabled them to build a state-of-the art F1 factory. Jordan was fortunate that a brilliant chassis from Gary Anderson enabled the team to find Sasol money for its second season. The team, however, employs a very different approach to others and is still small in comparison to the opposition.
While the bigger teams do all their composite work in-house, Jordan has pioneered the idea of forging special relationships with independent companies. There is no shortage of such companies with specific expertise in F1. Many experienced F1 fabricators have set up independent operations to use their skills to make a greater profit than they can working directly for a team. These include such firms as G-Force in Poole, Dorset, under John Biddlecombe; Galmer at Bicester under Alan Mertens and Seamus Campbell; SPA under Bob Simpson and Richard Barnes; Gordon Coppuck's Adrem; John Macdonald's Superpower and Dave Price's DPS Components.
Jordan's theory is to keep suppliers competitive rather than hiring their best fabricators are having to coordinate another entire in-house department. Other teams have arrangements which are halfway between Jordan and the in-house operations. Tyrrell for example has some of its work done by Yamaha offshoot Activa, based in the old Brabham factory at Chessington; and Ligier now has parts made at TWR Composites (formerly known as ASTEC) in Derby.
To date Jordan has survived and each year it gains more of the industrial capacity it needs to survive. All the other new teams have closed. In fact, since the recession began in 1989 17 F1 teams have closed down Andrea Moda Formula, AGS, Brabham, Coloni, EuroBrun, Fondmetal, Larrousse, Life Racing Engines, Lotus, March, Modena Team, Onyx, Pacific, Rial, Scuderia Italia, Simtek and Zakspeed - and several of these teams went through various incarnations before closing down, notably Fondmetal (Osella), March (Leyton House) and Onyx (Monteverdi).
The surviving teams all date back to the early 1980s - before the arrival of the major motor manufacturers in F1. If was the money of the car-makers which enabled the old teams to invest in the necessary departments and equipment.
The major lesson which teams with F1 ambitions need to learn is that the most effective way of breaking into F1 is to buy an existing team with the facilities in place. Benetton did it with Toleman; Project 4 did it with McLaren and TWR is in the process of doing it with Ligier.
This is enormously expensive in the first year but means that the teams can concentrate on the racing rather than building vital facilities. It is better to use old facilities and replace them later than try to build new ones and go out of business trying to pay for them.
But can the big teams continue to grow bigger? At the moment this seems to be so. In recent weeks Williams has moved into a vast new facility at Grove near Wantage; McLaren is planning a vast new corporate headquarters and Ferrari and Benetton are both talking about new facilities.
When Frank Williams and Patrick Head opened Williams Grand Prix Engineering in 1977 they were working in an old carpet warehouse. The team moved to its 6.5-acre site in Didcot in 1984 and are now moving to a 28-acre facility. The new site - formerly owned by a pharmaceutical company - includes ample workshop and office space. There will be a 50% rolling road windtunnel on-site, plus four post rigs, autoclaves and multiple-axis cutting tools. In addition there is room for the company's museum and conference centre and there is even a 95-seat lecture theatre. The entire complex is ranged around a lake.
Williams justifies this by arguing that as technology advances so teams must investigate every avenue which might make the cars go faster. They create new departments for each new exotic science which F1 stumbles upon. The ultimate limitation is that a team can only grow as big as its money supply allows it to. While a competitive technical package remains vital for success in F1 there is increasing investment these days in expanding commercial departments which will find and nurture big sponsors and media departments which will make sure a team gets us much coverage as possible around the world. In order to pay for the cars, the teams will have to learn to sell themselves more professionally. Creative marketing - such as the networking of sponsors and technology sharing - will play an important role.
Now matter how successful the F1 marketing men may be, the research & development scientists will use the money. One can imagine a Formula 1 team with 500 people so long as there is money to justify its existence. But even the best marketing men can only get so much money and so there is now developing a system of technical partnerships with aerospace companies which research on behalf of the teams in exchange for signage on the cars.
On question which every small team eventually has to face is whether or not it needs to invest in the expensive machines used by the top teams: windtunnels, four-post rigs, autoclaves and five-axis cutting machines. These cost millions of dollars.
Williams reckons that its windtunnel to be a vital part of its success story and all the top teams now want 50% rolling road tunnels. Ferrari has access to the British Aerospace tunnel at Filton, Bristol and Benetton is using the Fondmetal Technologies tunnel in Italy. The only other 50% rolling-road tunnel in the world is the Swift tunnel at San Clemente in California.
F1 engineers are never happy and so while some aspire to 50% tunnels, others are already talking about 100%-scale tunnels. There are a lot of full-scale tunnels in the world - Lockheed has one in Marietta, Georgia capable of speeds of 200mph - but there is only one full-scale facility with a rolling road. The DZW tunnel in Holland - designed for testing aircraft landing gear - does not give accurate results for cars.
The most important thing in F1 is not so much the speed and size of the tunnel but rather its accuracy, particularly the movement of the car in relation to the ground.
The problem with the big tunnels is that the bigger the facility the more problems there are getting the necessary air-speed without generating high temperatures. There are also hugely expensive. The Indianapolis City Council recently did a study into establishing a 100% rolling road facility, but gave up when estimated costs reached $25m.
Ligier and Arrows invested in their own 40% rolling road tunnels some years ago while others have special arrangements with specialist facilities. Benetton and Ligier use the Defence Research Agency tunnel in Farnborough, Britain while McLaren has a special arrangement with the National Physical Laboratory in Teddington. The other teams tend to rent time in commercial windtunnels such as the Honda tunnel at Imperial College London or the facility at Southampton University.
Today this costs around $2500 a day and with engineers demanding 25 days in order to build a safe car and understand how it works, most teams have to budget for $60,000 a year or more - and they have to take the time when it is available. Teams with their own tunnels can test all the time.
The general consensus has long been that a team needs a windtunnel of its own but today some are beginning to ask whether the theory is as good as the reality. They have found that running a windtunnel is very difficult and costly. One needs more people - which increases the cost - and there is a lot of "down-time" if a team does not have the back-up necessary.
As a result some teams have looked at water-tunnels while others are concentrating on developing ways to do aerodynamic work with computer models. This can be extremely accurate and once set-up is not expensive to run. The problem is that you need very powerful computers to simulate everything you need and F1 teams cannot afford the millions needed. The Ford Motor Company - which uses the most powerful privately-owned computers in the world (built by the Cray company) - have used some of this technology to help Sauber develop its cars.
Sauber has also been using Ford's four-post rigs at Cologne in Germany with good effect and throughout F1 rig testing is getting more and more important - although it too will probably be all done with computer models within five years.
Until the new computational possibilities become reality, teams have to struggle on with big departments and expensive machines. Some organization have resorted to hiring high-powered industrial managers - like McLaren's Martin Whitmarsh, who came to Woking from British Aerospace.
The problem with becoming a corporation is that the bigger the corporation the slower the reaction times because of the need for decisions to go through more complicated management structures. There is a danger that the pursuit of excellence - on which F1 is founded - can be lost in bureaucratic compromise. Good cars are not designed by committees. Such structures also deter the more imaginative engineers from joining a big team because these people tend to impatient and want instant results. This is one reason why one finds so many ex-missile industry engineers in F1. It was simply a more exciting world in which to work. If it ceases to be so, the brilliant minds will turn elsewhere.
Big corporations are also prone to problems of internal politics. Several F1 teams in the last 10 years have suffered from personnel with clashing egos and inevitably this leads to messy divorces.
There are other dangers too. There are only so many sponsors big enough to support F1: currently cigarette and oil companies and motor manufacturers. The Benetton clothing company was once a sponsor but then decided that it would gain more if it actually owned and ran a team. It is quite likely that in the years ahead car companies will look at what they are spending in F1 and decide that it is better to have their own F1 teams.
Currently they pour money into the teams. Much of this used to invest in higher technology. As the teams get bigger so do the ambitions. Teams begin to ask themselves why they cannot build road cars. Enzo Ferrari did it. McLaren has done it. Williams is souping-up Renault models and other teams have tried similar things.
To a manufacturer this is a threat: what is the point of pouring money into a team if it then becomes a car manufacturer and eats into your market share?
There have been suggestions over the years that the major reason that Honda split with McLaren at the end of 1992 was because of the team's desire to build road cars.
In the circumstances it is logical for the big motor manufacturers to establish their own teams or - if they do not wish to invest to such an extent - to buy shareholdings in teams, to protect their investments.
And with that kind of backing F1 teams will be able to grow more than ever...