When Ford pulled out of Formula One, Cosworth did what a good engineer would do: a full strip down and re-build of the business, focusing on new applications in growth markets. Will Stirling hears about a story of success through reinvention.
Why did Cosworth win The Manufacturer of the Year Award in 2011? It wasn’t due to the famous engineering brand’s 176 wins in Formula One. The Northampton-based firm exited Formula One in 2004 when its then owner, Ford, decided the elite sport was not part of its business strategy. And it wasn’t down to how it manufactures its ‘super-engine’ portfolio that revolutionised motorsport. Most of its big, game-changing milestones – like the legendary double four valve engine – came between the 1960s and 1980s.
In the judges’ view, Cosworth won the top award because in less than nine years it had leveraged a great brand in one sector, motorsport, and diversified successfully into four new markets: competitive sports – including motor sport, cycling and sailing – aerospace, defence and automotive.
That’s impressive, given that the customer requirements, quality and on-time delivery standards, and even simply the personalities in these sectors were quite different to anything Cosworth Mk I had dealt with before. “Until 1998, Cosworth made engines for racing. That was everything we did,” says head of marketing Pio Szyjanowicz.
With diversification came sales – lots of sales. In 2010, company revenues rose 50% and profits rose 300% year-onyear to £4.9m. Today group turnover is about £50 million, and the company has three sites in the US, two in the UK and one in Pune, India.
The diversification strategy was prescient given that by 2004 Ford, who bought Cosworth in 1998, was getting twitchy about its commitment to F1. “It’s true that Ford’s foray into F1 as a team owner didn’t yield the racing success or brand enhancement that had been envisaged at the outset,” says CEO Tim Routsis, who took over the helm of the business in 2003 and is responsible for a large portion of the post-F1 business strategy. “As such, it was always a possibility that Ford could elect to withdraw.”
Ford is a big OEM with deep pockets and F1 is a desirable platform to showcase big automotive companies’ engineering excellence. Did Ford’s decision to quit F1 catch Cosworth out? “When the news came we were already embarked on the diversification plan, so paradoxically Ford’s exit reinforced the soundness of the strategy in the minds of the staff,” Mr Routsis says. “The management was also not in the position of being forced to react and make big changes, but instead to hold a steady course already set.”
Fast forward several years and this one-time motor sport engineering devotee is into everything; designing, manufacturing, testing and prototyping diverse products from engine blocks for high performance road cars, to condensation-resistant FADEC housings destined for Boeing flight consoles, to bicycle parts and micro-strain gauges for ultra-performance sailing.
Quality management gets an overhaul
One of the challenges of transitioning from a pure motorsport specialist into other markets, especially aerospace, is quality management. Ian Allan has responsibility for the quality management (QM) system for the whole Northampton site, including office departments.
Diversification in QM started in 1998, says Mr Allan. “In ‘98 we were a very quick, reactive motorsport company,” he says. “Ford was very strict on up-to-date processes. We were governed by the engineering department, who practically ran the manufacturing. “We’re going racing at weekend, we need this immediately,” they’d say. “But what about an XYZ-compliant drawing? No, use this sketch.”” Over time a more consistent QM system developed as Ford’s influence percolated down.
The really big change came post-2005, when Cosworth began to bid for aerospace work. The company already had ISO9001, but they were advised they’d had more chance of winning aerospace contracts with the AS9100 standard. Cosworth has AS9100 for manufacturing, but it is about to sign-off with an AS9100-accredited design authority partner. “It’s the gold standard – although it will be revised soon,” says Mr Allan, referring to the AS9100-C. “Designs are fixed, concessions are very difficult to get, parts have to be 100 per cent every time. We don’t have the ability to cross the road and discuss designs with a Cosworth engineer, because we’re dealing with aerospace primes.”
In 2006 the company considered ring-fencing the manufacturing units: one for ‘commercial build’, i.e. automotive and sports, to ISO9001 standard, another for aerospace to AS9100. “But you lose that flexibility, you are restricted to what machines and what people you can use,” says Allan. “We took the decision that the whole business – manufacturing, aftermarket, sales, purchasing, HR and dispatch – would all come under the AS9100 umbrella. Everything is at AS9100 now apart from engine build test and engineering.”
The visitor showroom at Cosworth in Northampton is a racing anorak’s dream. There is a sumptuous line-up on show: the Chevrolet Vega engine, the 16-valve FVA engine and, perhaps company founders Keith Duckworth and Mike Costin’s greatest achievement, the double four valve, or DFV, engine.
“The key to a racing engine is to achieve more combustion cycles in the same period of time, which generates more power, so you can go faster,” says Dr Szyjanowicz (Pio). “Keith [Duckworth] worked out how to make a crankshaft that could withstand the strain of these revolutions, to take rpm from the ‘standard’ of five or six thousand rpm up to 10,000 rpm and beyond.”
Another important innovation by the founders was the compliant racing gear train. On the DFV, “rather than using belts, the camshafts are connected to the crank using a set of gears. The speed is too high for belt to be able to deal with, making accurate timing impossible,” says Pio. The provenance of the DFV is a story itself, the radical design involving racing geniuses like Colin Chapman and Jim Clark, supported by Ford’s Walter Hayes who really forged the Cosworth / Ford racing partnership in the 1960s.
In 2004 Ford announced that it was selling Cosworth and sister company Pi Research, along with its Jaguar Formula One team. On November 15 2004, the mechanical and electronic engineering companies were sold to then Champ Car World Series bosses Gerald Forsythe and Kevin Kalkhoven, forming today’s Cosworth Group.
“Aerospace [work] has been the greatest challenge for manufacturing with our background,” says Pio. In the main workshop lobby, he presents a FADEC casing for housing electronics in a Rolls-Royce Trent 900 engine. “We thought we knew everything about making precision parts out of high performance metals. Then we tried to access aerospace markets, and realised that aerospace could teach us a lot more about tolerance, quality, reproduceability and metrics than motorsport knew,” Pio adds.
In motorsport, deliveries are always tight. But aerospace taught the business a culture of ultra accuracy, right first time, every time. This culture is also essential to minimise waste. “If you produce high wastage with very high raw material cost and high cost of manufacture, your profits will fall drastically,” says Pio. “We need to get down to 20-hrs on this type of part [a high pressure – low pressure aerospace pump]. You’re hauling out a large amount of material from a billet, so accuracy is vital.”
What about additive, rather than subtractive, manufacturing for such parts? Cosworth is looking into this application. “At the moment, you can’t additive manufacture [such critical parts] to the standard that the customer will sign-off,” adds Pio. “You must get the balance right between what the customer will pay for what you provide, and how you can supply to their standards using potentially new methods. When is the right time to switch method? If you move too soon, and you can’t deliver on the volumes at the standards you’ve committed to, it’s not a profitable exercise. And if condensation gets inside this casing, it’s very bad news for an aircraft.”
The two main workshops at Northampton, broadly divided into soft metal and hard metal machining. They have configured production cells for specific product programmes, but at the moment machining activity for different products and sectors is distributed across both shops. Like any engineering firm, capital equipment is a mix of old and new. Cosworth favours Maatsura machine tools and DMG 5-axis CNC machining centres at the moment, but older tools are dotted around. Pio says: “We find ourselves saying ‘I’m glad I kept that machine, there’s no other way of doing it at current capacity. You need to understand what you use [a machine] for, and when to upgrade before retiring it.”
With larger contracts, Cosworth has needed more ‘lights out’ operation. Steve Gregory is a set operator for the newer of two DMG DMU70 machining centres. “After 5pm we load the DMG with up to 60 workpieces on the jigs and let it run overnight,” he says. “This enables us to get 22-23 hours of machining every day. It can do all different types of work, but this one has been brought in purely for piston work.” What about new skills? “We’ve learned more with different machine tools; different CNC programming, editing, programme adjustments. Knowledge has increased with the variety of projects.”
Huge crank shafts in chocks are for the Aston Martin One-77 supercar. Cosworth makes the whole 7.3L engine. “Only 77 vehicles will be produced, at over £1m each,” says Pio. “While we are working with this customer on other projects, I’m afraid Mum’s the word!”
The company also designs and makes electronics. It subcontracts the board population, but designs and assembles boards into units along with authoring the operating software. “It’s relatively low volume but highly complex work,” says Pio. Recent developments include F1 steering wheels and electronics systems for engine management and crew safety systems for military customers.
Cosworth has begun to take apprentices on again, and now has five, mainly in manufacturing. Quality manager Ian Allan says: “It’s a challenge to get appropriately skilled people. We’re training up a couple of lads to be part of the quality department because we can’t find the people in the job market.” It takes about four years to bring someone with the correct GCSEs or NVQ up to scratch for QM inspection.
Do people stay? “Turnover can be relatively high in the motor racing industry,” Allan says. “You’ll find ex-Cosworth people at Williams and McLaren and plenty of others. However we are fortunate to have a core of experienced engineers and technicians that apply their knowledge across our various programmes. ”
View from the top – Tim Routsis, CEO
Tim Routsis took the lead at Cosworth in 2003 at a pivotal time. Formula One was more expensive than ever to compete in, and rumours were rife that some automotive OEMs might get out.
“It was pretty clear to me that the landscape of motorsport was changing, and we couldn’t afford to rely on it for the longer term,” says Mr Routsis. “My job was to spearhead the move from a single product, single market activity into a business model that ensured Cosworth would grow and flourish regardless of what happened to motor sport.”
Aerospace and defence engineering is a very different discipline to the more reactive model of top league motorsport. How useful has Cosworth’s reputation been in acquiring aerospace contracts?
“The Cosworth name has been a key factor in meeting potential customers in adjacent markets like aerospace,” Routsis says. “As a very well-recognised and respected brand it opens doors to the very top of target companies, allowing an initial conversation to take place. However, once the first contacts have been made, the durability of the relationship is predicated on the quality of the goods and services we provide, not the strength of our brand.
He continues: “[Due to our pedigree in racing] our engineering judgments and opinions are respected. However, we’ve also had to immerse ourselves in the target markets and absorb not only their culture and dynamics, but also show real commitment to being a worthy supplier. We have worked hard to gain AS9100 certification and entry to the SC21 programme [aerospace’s Supply Chain 21] and we do not expect customers in aerospace to consider our motor sport pedigree the key factor in placing an order with us.
What challenges has Cosworth dealt with on its transformation? “Processes, equipment and practices that are fine at a given size can often become inadequate as the business grows,” says Routsis. “This means that we are always managing change – something that can be unsettling unless both the need and the response are well communicated to staff on a regular basis.”
Cosworth’s future looks bright. Diversification is working, not only giving the business more security by spreading orders, and risk, across four large markets but increasing sales substantially.
There are no immediate plans to enter more, brand new markets but “where we see opportuntities to continue doubledigit growth is in entering new geographies,” says Pio.
Cosworth has been looking east. In February it entered a strategic partnership with ST Aerospace of Singapore, to jointly develop heavy fuel engines for unmanned aerial systems in the Asia Pacific markets. India, too, is an exciting market. “The challenge is to understand how Cosworth’s business proposition translates for customers in India, where multinationals have spent millions setting up R&D centres and are looking for local talent to produce defence and aerospace technology,” says Pio. “We have opportunities to work with indigenous Indian firms on projects like UAVs and Indian defence programmes.”
Elsewhere, the company is pushing the boundaries at the interface of mechanical and electronic engineering. In high performance sailing, for example, where it has developed micro strain gauges capable of measuring the load on pins in sail rigging. “The pins need to be manufactured from a decent material, and the design has to ensure that the strain can be measured accurately across the pin,” says Pio.
And Cosworth is also investigating electronics that can be embedded into carbon fibre materials. One exciting application they’re researching is managing the power consumption and charging of portable electronic devices like GPS receivers and radio handsets through inductive charging methods. Clever stuff, and a good example of how Cosworth Mk II is adapting for a global market with little to hold it back.