I don’t get to England that often and usually it is only London. The other morning, however, I found myself in Lambourn en route (a circuitous one) from the M4 to the Williams factory in Grove. I had a little time to kill and so I was pottering about. And it struck me as I headed into Motorsport Valley, that I was already in a very mature “business cluster”, because Lambourn has been all about horse power since the 18th century. The downs make for great galloping country and it seems to be an ideal environment to breed and train racehorses. There are reckoned to be over 2000 of them in training in the Lambourn valley with over 50 different racing yards and a big chunk of the population is employed in the racing industry. They even have equine swimming pools!
The clustering of firms with specialist skills is not unusual in other industries. If you traverse the Black Forest in Germany you will find an extraordinary number of cuckoo clock makers; financiers have long gathered in the City of London, the automobile companies have long been concentrated in Detroit, film companies are gathered in Hollywood, computer firms in “Silicon Valley”, diamond traders in Antwerp, ceramics companies around Modena and so on. There is a pool of expertise and ideas circulate very quickly and it takes time for those outside the clusters to keep up. The cluster of constructors meant that there was also a support structure of component manufacturers, engine tuners and other associated businesses, all dedicated to motorsport. Constant competition provoked technological breakthrough and those who could not keep up went out of business.
The strength of the cluster was such that by the 1980s it made little sense for anyone to set up an F1 team anywhere other than Britain. Even Ferrari experimented with British design offices. Today all F1 cars except for Ferrari, BMW Sauber and Toyota are built in the UK, in an arc of 1200 or so performance-engineering companies that goes from McLaren in Woking to Williams at Grove, Renault at Enstone and then up to Brackley and Bicester, Northampton and Brixworth, across to Huntingdon, Thetford and Norwich. It includes the university towns of both Oxford and Cambridge. It is reckoned that motorsport in this region employs 25,000 people and generates revenues of $4bn a year.
But while Britain remains strong in F1 terms, things have changed in the junior formulae. Formula BMW has eclipsed Formula Ford with the cars being built in France; even the best Formula Fords now come from France. Formula Renault chassis are built by Tatuus, at a factory near Monza in Italy. Formula 3 is now dominated by chassis from Dallara in Italy. GP2 chassis are built by Dallara. Today the British cluster is under threat from the NASCAR cluster around Charlotte, North Carolina. The suggestion that there may be an F1 team building cars over there is simply the latest stage in that process.
On the day of my visit Williams was feeling rather aggrieved by the coverage given to RBS’s decision to end its F1 sponsorships at the end of 2010. It was not really a story. There are two years to go on the deal, which is plenty of time for the teamk to find new backers and there are several other teams in far more trouble: Honda and Renault being the obvious candidates, as both need to find considerable money is the next nine months. The bottom line in F1 – even in a recession – is that the money comes if the team is a winner.
To my mind Williams is the last real racing team in F1 because it is the only one that exists simply to go racing, rather than to sell canned drinks, Indian beer, automobiles or whatever. Perhaps it would be wiser to expand the business into new areas but Sir Frank Williams and Patrick Head are really not that bothered. They are racers. What made Williams great was ingenuity and good engineering and the team hopes that this will bring about the revival that is needed. At the event the talk was not of expanding the business but rather of whether the team’s unique KERS system will give it an advantage. It is a good moment for the team to redefine itself as the rule-changes offer opportunity to upset the pecking order.
“It is fantastic thing for us,” said Nico Rosberg. “There is no copying. Everyone has their own ideas. It is a time for creative ideas. A time to be ingenious. There are grey areas to be used. It is a big chance.”
Sir Frank is too wise and seen too much to make predictions. He is by nature a pessimist but he admits that this year F1 might see “a few surprises and a bit of movement up and down the grid”. He will not say more than that. The team believes that the cost-cutting thaty is to come will bring the other big teams back towards Williams, which dropped behind in recent years because it did not have the manufacturer backing enjoyed by others.
Ingenuity was always important in F1 but in recent times money was as important, if not more so. But money will never buy success in F1 – as Honda has discovered over the years. It is how the money is spent that is important.
The good news up in Brackley is that it seems that the management buyout of Honda Racing F1 has now been agreed and that Ross Brawn and Nick Fry will run the team, using Honda money plus the money that comes from TV income, plus whatever sponsorship can be found. The biggest challenge will be for the team to find the money to go ahead in 2010 when Honda will probably stop paying, although I cannot really imagine that Honda will not retain some kind of option to buy back the operation in the future, when the car markets of the world calm down again. Honda has always used F1 rather differently to other teams. It likes to explore the new technologies involved; it likes to use the sport to publicise its products, but most important of all is that Honda has used F1 to train its engineers in the F1 thought-processes. This has been hugely valuable in the past.
Throwing away all that investment and all the potential makes no sense at all.
Interesting piece. And to prove you learn something every day – equine swimming pools?!?!
I didn’t even know horse could swim.