Innovation vs Regulation

April 12, 2014

Lotus 49 & Ford Cosworth DFV

Lotus 49 & Ford Cosworth DFV

I just came across an interesting blog piece on the Virgin Disruptors Website regarding innovation vs regulation: http://www.virgin.com/disruptors/regulation-v-innovation-five-key-battlegrounds

It outlines a series of cases where regulation, often stimulated by lobbying from the incumbents, attempts to stifle some of the creativity of innovators. Undoubtedly this is sometimes the case, but a question which has interested me has been whether regulation can also stimulate innovation and create game changing opportunities rather than just protecting the profits of some rather comfortable firms who have grown lazy from success and want to avoid new competitors at all costs.
Last year I put in a research bid for some funding from the Leverhulme Foundation which aims to provide two or three years funding for academics who would like to spend some time on researching something they are really passionate about, but due to admin and teaching responsibilities haven’t had the time to do it. I felt I was a good case (but they obviously didn’t as I didn’t get the grant!) and of course my passion was to look more deeply into the world of Formula 1 and in particular the relationship between innovation and regulation. The situation today is a case-in-point, for 2014 we have totally new propulsion system, with V6 turbo-charged 1.6 litre engines combined with sophisticated energy recovery systems which create a further 160kw from mechanical and heat energy recovery. These systems are innovative, but it’s been quite interesting how some of the well-established teams and movers and shakers are unhappy about the changes and the way it has shifted the balance of competitive performance between the teams.

A major regulation change is of course both a threat and an opportunity. Back in 1966 the FIA decided to change the engine regulations and move from a 1.5 litre engine to a 3.0 litre (interesting that we have now gone in the opposite direction). For the British teams such as Cooper and Lotus this was a major threat as their engine supplier – Coventry Climax decided that they could not afford the costs of designing a new, bigger engine and so it looked like well-funded teams with the engine technology, such as Ferrari, would dominate. Colin Chapman at Lotus had a different plan. He sought to persuade Ford to fund the development of a new 3.0 litre F1 engine which would be a technological revolution. The Ford Cosworth DFV was designed as a stressed component of the car which meant that the engine could be simply bolted onto the rear of the chassis with the rear suspension and gearbox fitted onto the rear of the engine. It was powerful, light and cheap (in 1968 an F1 team could buy the engine for £7500, so Ken Tyrrell told me!), it created the many F1 constructors based in ‘Motorsport Valley’ that still remain today with eight out of the eleven F1 teams all based within a fifty mile radius of Oxford. So occasionally regulation does stimulate innovation, and with some pretty spectacular consequences.

Professor Derek Pugh, now Emeritus at the Open University, a member of the team who conducted the ‘Aston Studies’ of the 1960s, once said that every organisation has the strength of its weaknesses and the weakness of its strengths. What (I think) he meant was that strengths can become the source of a downfall, and weaknesses may provide the basis for new opportunities. .

This logic can also be applied to individuals, and in many ways you could portray this as a real sign of greatness: someone who is able to grasp the opportunity to turn a weakness into a strength. As a fan of music, and particularly the guitar, I am reminded of Django Reinhardt the great jazz guitarist who was badly injured in a fire at eighteen years old. Reinhardt re-taught himself to play the guitar and developed a unique style, only using his index and middle finger on his left hand when playing solos, as his other fingers had been paralysed as a consequence of the blaze. His distinctive style was sometimes referred to as ‘hot’ jazz, and for many he remains one of the greatest guitarists of all time.

A recent tweet from Richard Williams, concerning Ayrton Senna and his performance at the European Grand Prix at Donington in 1993, got me thinking about this question as it relates to Senna and his legacy. A few years ago I was chatting to someone at Cosworth about this amazing drive, and particularly the first lap when Senna moved from fourth, back to fifth, and then to lead the race by the end of the first lap. It is no secret that, at that time, the Cosworth in Senna’s McLaren was significantly underpowered, particularly when compared to the Renault engine in the Williams’ of Alain Prost and Damon Hill. However my friend regarded this as a potential advantage in the wet conditions, when it would be difficult, if not impossible, to use the power advantage of the Renault due to the low grip on the wet track. But he remarked that the Cosworth also had a smoother, flatter power curve which meant that it was easier to control than the more aggressive power curve of the Renault in low grip conditions, exactly like those at Donington in 1993.

One interpretation of this information is that perhaps Senna’s drive was not that exceptional because he had an engine advantage for the damp conditions that existed at the time. I prefer to look at it another way; he recognised the limitations of the Cosworth power unit during the 1993 season – which was why he moved to the Renault powered Williams for 1994 –  and he therefore made sure that, given the wet track at Donington, he would exploit this opportunity to its very maximum. That day he drove in a way that showed a confidence and commitment that none could match on the first lap. Recognising the opportunity in a weakness is what greatness is all about.

Luca Marmorini, Ferrari’s Head of Engines, has been quoted in Autosport.com as saying that it is important that Ferrari have a second (ie in addition to Sauber) customer for their 2014 power unit – note the term ‘power unit’ as effectively these are engine + energy recovery systems, so the simple term ‘engine’ no longer seems to do it justice.

The reason for this concern is that their current second customer Toro Rosso have recently announced that they will be shifting to a Renault power unit in 2014, which makes sense organizationally as they are co-owned by Dietrich Mateschitz of Red Bull with Red Bull Racing, so presumably they can share more data during development and racing and therefore improve the performance of both teams. However Toro Rosso’s location in Faenza makes Maranello the ideal partner from a logistical point of view as they are literally a few kilometres down the road. Location matters in F1, otherwise we wouldn’t have Motorsport Valley in the UK, and so the proximity between the power unit supplier and customer cannot be ignored. For this reason, Marmorini hopes that all is not lost with Toro Rosso and that they may review their decision to go to Renault, as he says on the Autosport site:  “I don’t know if Toro Rosso will be with us next year. We are still working very well with them now. They’re an important contribution to Ferrari engine development, but I also think we are giving them a competitive engine.”

A key factor in this is data. Derek Gardner, the now sadly departed designer of the six wheel Tyrrell, told me that a key problem that they had with the six wheeler was the speed of development of the front tyres, which were far smaller than the standard F1 front tyre that Goodyear supplied to all the other teams. As a consequence they were getting far less data on the performance of the tyre – as it was only fitted to two cars and so were unable to develop it as fast as the other which had feedback from twenty four cars (there were 13 teams racing back in 1976). Data therefore is everything if you want to improve performance.

So currently it seems (and things could still move around a fair bit) that if Toro Rosso move to Renault then Renault will be the leading supplier with power units in five teams: Red Bull Racing; Toro Rosso; Lotus; Williams and Caterham. Mercedes will be supplying power units to three teams: their works team plus McLaren and Force India. Ferrari will be supplying two teams – themselves and Sauber. It seems very unlikely that Cosworth, who currently supply Marussia, will be in the frame for 2014 (but never say never) and so who knows, we may see Ferrari supplying the power unit for Marussia, which will make an interesting dynamic in their race with Caterham to tenth place.

Will we see the Porsche badge back in Formula 1?

There’s an interesting piece in the June edition of F1 Racing which suggests that Williams are less than happy with the performance of their Cosworth engine this year and are exploring a link up with Porsche.

It is clear that Williams are, so far, not delivering the kind of performance you would normally expect from the Grove based team, and given the strong racing tradition within the company, I’m sure they’re not too pleased with it either. As they are the only established team to be using Cosworth power this year, it is difficult to get a clear benchmark as to how much the engine is impacting on their performance. Certainly the Renault (Red Bull and Renault) and Mercedes (Mercedes, McLaren and Force India) power units appear to be strong, and although Ferrari have been doing well with their own cars, the only established teams yet to score a point are Toro Rosso and Sauber, both of whom use Ferrari customer engines. Of course aerodyanmics are the biggest driver of performance these days, but although the engine designs are effectively ‘frozen’ they can make a difference in terms of overall power, the way the power comes in when the throttle is used (driveability), reliability, shape – to help aerodynamics – and also the centre of gravity which can impact on handling. The F1 Racing article suggests that there are concerns with the driveability of the Cosworth engine and also its ability to maintain optimum performance with increased mileage. Apparently Cosworth are working on these issues and hope to have improvements in place for the Turkish Grand Prix.

Porsche have a fairly chequered history in F1. They entered a full works team in 1961 to take advantage of regulation changes to use a 1.5litre V6 engine, they remained until the end of 1964, shortly before the regulations changed again to permit larger 3.0 litre engines, but were not really able to enjoy much success during this period, they did win one race – the 1962 French Grand Prix at Rouen. They came back as an engine supplier in 1983 when their power units were used in the McLaren F1 car and branded Techniques Avant Garde (TAG) as this was the sponsor who funded the project. This relationship ended in 1987 when Ron Dennis had persuaded Honda to move to McLaren away from supplying – guess who? – Williams.

So why is there speculation about Porsche and Williams now? Well it seems to be one of these ‘by association’ links. Williams Hybrid Power (WHP) was set up by Williams to develop their KERS system for 2009, using a electro/mechanical (generator/flywheel and electric motor) system rather than the electrical (generator/battery and electric motor) system adopted by the other teams. However WHP is also a stand-alone operation which is looking to commercially exploit this F1 based technology for other applications. Recently they have collaborated with Porsche to produce the hybrid system for the new 911 GT3 R Hybrid race car. This was announced at the 2010 Geneva Motor Show in March and the car recently lead the field at the Nurburgring 24 hour race before succumbing to engine problems. Porsche clearly believe that hybrid technology is consistent with their high performance products and are using Williams’ F1 technology to develop this. However, it is unlikely that Porsche would entertain the idea of supplying an F1 engine in the short term with F1 engine regulations being very restrictive. However the FIA is currently working on new engine regulations from 2013, which are likely to emphasize hybrid technology, so this could be something for the future, and may provide an opportunity for Porsche or other VW group brands. However for the time being it looks as though Williams will have to hope that Cosworth make some progress in terms of catching up with Renault and Mercedes.

The last time the Cosworth name appeared was on a 2006 Williams

As the Valencia test gets underway this week, aside from the car and driver comparisons that can be drawn, the one I’m going to be looking out for is engines. Admittedly Valencia is not likely to be an ‘engine’ circuit, but the performance of the engines, both in power, reliability and fuel economy is going to be a critical factor in explaining the performance of the teams in 2010. Fuel economy is a potentially critical issue as there will be no in-race refuelling and so the ability of the engine to require less fuel to complete a race is going to be a big competitive advantage. An announcement was made recently that the 2009 spec engines would not be ‘equalised’ . The FIA had given the engine suppliers the opportunity to adjust down the more powerful units if there was a view that there was an inequality, but it looks like (surprise, surprise) this could not be agreed. Of course this did not include Cosworth who have based their 2010 power unit on their 2006 spec engine. The engine was originally designed to run at 20,000rpm and will now run at the regulated 18,000.

The word on the street is that, of the 2009 engines, the Mercedes and Renault power units are likely to be the best combination in power and economy, with the Ferrari engine looking to be thirstier. Commentators have noted that Ferrari have recently registered a number of ‘reliability upgrades’ which are allowed under the regulations, which have been interpreted as Ferrari trying to address this problem. One of the most successful corporate and technological partnerships in F1 is that between Ferrari and Shell, in the past Shell have worked with Ferrari to develop fuels that both weighed less and gave a power advantage, I’m sure, if there is a problem, that it will be addressed before too long. But the really interesting question is how well the Cosworth engine will perform. The message I’m hearing from the Cosworth people is a bullish one, they are optimistic that they will be right up there in terms of performance and economy, however there are concerns that as the team have not run an engine in F1 since they partnered Williams in 2006, there could be reliability issues. Either way it will be interesting to look at the times at Valencia in terms of engines as well as cars and drivers.

Valencia first session, it looks like the engine order is Ferrari (Ferrari, Sauber); Mercedes (Mercedes, McLaren), Cosworth (Williams) and then Renault (I’ve excluded Toro Rosse [Ferrari] on the assumption that their poor performance is due to the fact that they’ve had to design their own chassis for the first time!)

Could we see the McLaren and Cosworth names together again?

The general view of the knowledgeable F1 press appears to be that the relationship between McLaren and Mercedes has totally broken down, and that Mercedes will be unlikely to remain their engine supplier for much longer, certainly not until 2015 as their revised agreement states.

So if McLaren do switch engine suppliers who would they go to? Well Cosworth could be a short term solution, particularly if their power unit is competitive, which early indications suggest will be the case. The 2009 Brawn demonstrated that you can still create a competitive car with a relatively late change of engine supplier. McLaren did use Cosworth engines at one time – James Hunt won the 1976 World Championship with a Cosworth powered McLaren, but in the post 1980 Ron Dennis team they have tended to do their own exclusive engine deals such as that with Porsche (badged as TAG turbo), Honda, Peugeot and Mercedes. There are of course other potential sources such as acquiring the Toyota and BMW designs (which are reputedly up for sale at the right price) and making them their own – this would be a big step and considering they are now buying back the 40% Mercedes shareholding it is unlikely that they would want to be extending their finances in this way, although it would be in keeping with their aspirations to build a distinctive McLaren brand to mirror Ferrari. Other options could be Renault, depending on what decisions emanate from Paris over the next few weeks. I have already posted that Red Bull could do a badging deal with Renault to take over their engine operation, so presumably McLaren could do the same, but again this could require extended funding at a difficult time. I think that the one option that can safely be discarded is Ferrari, McLaren are a proud team and even pragmatism has its limits.

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Will Renault follow the Mercedes approach to F1?

If we put Ferrari to one side as a special case, and omit Toyota, as it remains unclear as to whether or not they will continue into 2010, we are seeing a new kind of involvement from those automotive manufacturers who plan to remain in F1.

The emerging model appears to be far closer to that of the eighties and nineties where the car manufacturers focus on engine supply, but with the added commitment of full or part ownership of teams. The engine scenario for 2010 looks to be dominated by Mercedes (McLaren, Brawn, Force India) and Cosworth (Williams, Campos, USF1, Manor, Lotus) with Ferrari and Renault also supplying engines to Toro Rosso (and also Sauber if they secure a place) and Red Bull Racing respectively. It looks likely that Mercedes will be aligning their brand more strongly with Brawn, but also that they may be seeking to identify a separate identifiable brand in the way that Cosworth will no doubt do. The other interesting question is Renault. Will the team be looking to find a buyer and shift to the kind of model which Mercedes are developing? – I suspect so.

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