At first glance, there are only 2 ways I can remember to build a Formula 1 team: one of them is expensive, the other one is super expensive. But, if you never try, you never know.
At a time where there is the possibility of Portugal hosting a Formula 1 Grand Prix, it’s unfortunate that a project to set up a Portuguese Formula One team didn’t materialise. The project started off 3 years ago and that was cancelled in December 2018.
The return of a Portuguese Grand Prix is still unsure, but in the current conditions with an unsure 2020 calendar, Portimão’s track is on reserve. Previously, Portugal hosted plenty of races, from 1958 until 1960 and later from 1984 until 1996.
But what we never saw so far was a Portuguese Formula 1 team. The closest thing was Tiago Monteiro’s Ocean Racing Technology that managed to compete in Formula 2, GP2 at the time, for some years.
But, it’s not easy. The last team that entered F1, not by just buying another team, is Haas F1 Team, initiated by Gene Haas. The American billionaire started with a significant $100 million budget and established technical partnerships with Ferrari and Dallara, after a failed attempt to do the same with Mercedes.
Until today, in the history of F1, the only privateer that built his own cars, drove them and won with them was Bruce McLaren.
Nowadays, nothing like that is possible. But it is possible to start from square one. But how?
João Correia is an Aeronautical Engineer with a PhD in aerodynamics. Specialised in aerodynamics applied to Formula 1 with more than 10 years of experience in motorsport car development and team management. The 37 year-old studied aeronautical engineering (Ba & MSc) and attained a PhD in Aerodynamics at Cranfield. His career started while at university in Formula Renault, moving on to A1GP, World Series by Renault, ALMS and ELMS, at which he worked as a race or performance engineer. In 2013 he was invited into Super Aguri Formula E where he managed the team during its startup phase, continuing later as Senior Performance Engineer of António Félix da Costa.
This team was the third where he was involved since day 1 and the second one where he led its startup.
After a short spell at Manor as an aerodynamicist until the team closed its doors, João Correia was a consultant of a former Formula 1 Technical Director, he was Head of Aerodynamics and Project Manager before re-joining Formula E recently.
Around 2017 came the idea to set-up a Portuguese F1 team. Together with Rui Pinto, they made presentations and project plans, and got together with potential partners. Unfortunately, not all the necessary funds could be obtained, despite assuring the return of investment and the help of interested partners to find others.
With the intention to understand how far they could go, they went into a second phase, but it was there where everything ended and the project had to be definitively cancelled.
But the experience and the steps performed will remain as a useful experience.
“Just like Copersucar was used to demonstrate to the world that Brazil had the capacity to develop cutting edge projects, we wanted to demonstrate that Portugal also has it, that we are not some poor guys, forgotten in the far corner of Europe that many portuguese believe we are. The idea was to show everyone that we can dream and fly higher, we only need to try and be persistent”, said João Correia about the project’s underlying motivation.
“In a joking manner, Rui Pinto (commercial director) asked me how much would be necessary to build a Formula 1 team. I presented him with a budget. Rui, with his entrepreneurial and adventurer mindset, said: “Let’s give it a try. If we never try it, we will never know if we can make it.”
Pinto, who has a master in Workplace Psychology is currently active in Supply Chain Logistics, at the biggest private group in the health sector in the UK. He was previously responsible for sales and trade marketing in the pharmaceutical industry for more than 20 years in several companies in Portugal, including Pfizer and J&J.
Together, they somewhat hesitantly started the project, with João especially aware of the difficulties that are involved. In order to make it happen, the project would have to be very different and pioneer to capture the attention of the media and generate the necessary return on investment for the partners.
It’s not easy to build a Formula One team from scratch with a starting budget of roughly 80 million euros and a team with around 135 employees is clear, and history confirms it.
Starting up the team is one thing, but next comes also making progress, settling in among the big teams, and perhaps becoming one. The number of teams that failed after some time is much bigger than the successful ones.
In recent years, the most successful one is Haas F1 Team, and in this case, a lot of the steps necessary to build a team were made ‘inside the house” since Gene Haas had not only the means but also the financial support to start. And four years later, the ‘downs’ are still bigger than the ‘ups’. It is not easy! In the present F1 grid, Haas is actually the only one that was born out of nothing, in the 21st century, that is holding steady.
Manor was born in 2010 as Virgin, changed to Marussia from 2012 to 2015 and ‘died’ as Manor in the end of 2016. Lotus was ‘reborn’ in 2010, gave place to Caterham in 2012 but only lasted until 2014. HRT was created in 2010 and lasted 3 years.
Planning for the future
After the initial idea, everything starts with the stage of preparing presentations, recruitment plans, project plans, logistics plans, cash flow, etc.:
“The first step we took was to define the minimum number of people needed to operate a team, taking into account that the project would only be attractive for potential Portuguese partners if the car were designed in Portugal. The team structure was defined, along with the car design and development plan.
“With these two documents, we were left with an activity and a resource (human and computational) calendar. From there, the necessary budget and cash flow began to be created. Having been responsible for the acquisition part in several racing-related projects, I had contacts and the knowledge of various component prices. Development plans were defined based on what a small team normally develops aerodynamically during the year (launch, first race, first European race, mid-season and possibly low downforce). The logistics plan was necessary for this initial phase for the budget, thus defining the number of trucks, motorhomes, support vehicles that are sent for each race, as well as the cost of sea and air cargo for some races”, said João Correia.
Move forward by phases
Of course, when one starts to set up a Formula One project, the aim is eventually to file for approval of the FIA. By that time, finances need to be secured and nearly everything needs to be planned out.
“To get an approval from FIA a team must demonstrate, among other things, that it possesses a ‘business case’ that supports the creation of the team and that ensures in a sustainable way the presence of the team in competition”, continued João Correia.
“Another important point for FIA is the technical capability of the team to envision and create the car, independently of it being through a partnership with a constructor or doing everything internally.
For this reason, the first step was to look for sponsorships and investments that would allow the fulfilment of FIA’s requirements. A series of phases were defined to outline the progression that would be needed to get the project off the ground.
“In phase 1, the main goal is the budget, where goals and timing are defined. In this phase 25-30% of the whole budget has to be discussed with a small group of potential partners. The intention was to ensure a return of investment of equal or greater than 40% of the budget in 3 months.
“In phase 2, we aimed to reach 60 to 70% of the budget while enlarging the discussion to other potential partners. It is necessary to ensure a return of 100% of the budget. This phase takes 9 months.
“In phase 3, 85-90% of the budget must be in place, after which talks with the FIA and Liberty Media could start.
Unfortunately, the team didn’t manage to reach this phase, but had they done so, this would mean starting up talks with possible power unit suppliers and other necessary technical partners.
“Once phase 4 is successfully reached we would be in a position to formalize our application with the FIA and finalize the engine supply contract. In this phase only 10% of the total budget is left to find, but we could still proceed with some minor changes to the plan.”, explained João Correia.
This would then be the moment to make the application to the FIA official. As we know, the FIA is very demanding/strict as they wish to uphold Formula One standards. They look beyond the financial capacity of a new structure and include checks for the technical capability to fulfill a project and build a car. In this aspect, having a car partially designed and with some CFD – Computational Fluid Dynamic – tests done increases the probability of the application to be accepted.
Interesting though, the project started off without a fixed entry date. As talks had already started for a major overhaul of F1’s technical regulations, the aim became to start racing only when the new ruleset would be introduced.
“For this reason, 2021 became our objective (at this moment the regulations have been postponed to 2022).
When we met with our partners it was agreed that, 2022 would probably be a better time to ensure that the new regulations would be in place allowing us to develop our car based on the solutions and performances of the other teams. This proposal came from my part, in an attempt to minimize the risk of getting a similar situation as the one of Mastercard Lola. We would not have historical data that would allow us to make a proper analysis and define our target performance. With the new cars there is the chance of getting things wrong, leaving us in a very complicated and expensive situation”.
The search for partners for #F1MadeInPortugal
Having an idea is one thing, but finding partners to support it, and turning it into reality is something else. On paper, an idea can even be welcomed with enthusiasm, but it is necessary to have people with a totally open mind on the other side of the table, because when you start talking about numbers, it can be frightening.
What kind of companies are approached, what is the strategy in a presentation to a possible partner?
“There are two things that we wanted to guarantee in the first phase of the project. First, 20 to 30% of the budget. Then find a way to generate a return greater than 40% of the budget. Our plan was always to guarantee a return that did not include the return generated by official F1 transmissions. We wanted to guarantee to all partners that the return generated in the races were the icing on the cake and that, even if we did not appear in the transmissions, the partners would obtain the return they desired.
“Thus, the selection of initial companies (a very restricted group) focused on companies that had a financial capacity to allow them to move forward, as well as a company that would give confidence to other potential partners to support (ie, “Corner Haberdashery” could be financially viable, however not being a recognized brand would not inspire confidence to other potential partners). And companies that were able to help us publicize the project, because, if nobody knows who we are, nobody would want to support us.
“One of the points that we always highlight was that none would be seen as a sponsor, but as partners. The common goal was to show the world that Portugal has the capacity for cutting-edge projects. The idea was to make a kind of #F1MadeInPortugal, a team that would be mostly a Portuguese family, united by a flag.
“Experience with partners in previous projects showed that it is very important not to say “I want your money for racing”, but to clearly create a benefit for the partners so that they feel part of the project.
“Our partners believed in our project and proposed organizing events with their customers and suppliers in order to place it in the middle of the business world and thus try to attract more support.
“This point is always very important since many partners entering Formula 1 have the objective of promoting business with other partners, so when Rui and I defined the partners we wanted to talk to in the more advanced phases, we already had in mind what we would propose to each partner.
“As an example, imagine Company A and B, both support the project with 10 euros and receive 10 euros of media return. Both are satisfied! However, if company A sells a product that company B needs, we can put them together so that company A sells company B the product at a more favourable price than the one the company pays to its usual supplier. The common example is the sponsorships that DHL and Ford made to Jordan F1, or Castrol to Jaguar in the 1980s at Le Mans.
“Another advice for those who want to raise support is to be patient, as large companies set their marketing budgets at the end of the year, the time for initial proposal, negotiation, signing the contract and receiving the first payments can take 18 months or more.
“In our case, all partners were informed that they would only have to proceed with payments when FIA has confirmed the entry into the championship.
“In addition, initial contacts involved asking friends and colleagues to introduce us to the people we needed to talk to”, said João Correia, who also explained the reasons for this second phase, to which they still decided to move forward, despite not having 25% of the budget. “The support from the first round of negotiations was so positive that despite not guaranteeing the 25% we saw there was interest in helping us move forward, hence we proceeded.”
However, this second phase was the most difficult: “The biggest difficulties are getting credibility from a potential partner who is contacted for the first time and secondly the lack of knowledge regarding the price/benefit ratio that Formula 1 and the project could offer.
We had several companies whose answer was: “We are not interested because Formula 1 is too expensive”, while other companies told us motorsports does not fit our marketing strategy”… .which is not always true (just see who sponsors Portuguese drivers in the most categories) and finally there were several companies that simply did not respond to emails, or even hung up the phone”.
Is there Portuguese manpower for F1?
When it comes to motorsport, Portugal nowadays is more focused towards rally, though it has not always been like this. There are Portuguese WRC engineers, mechanics everywhere, people in several F1 teams, but would there be enough Portuguese people in sufficient quantity and quality to assemble a whole F1 team?
“First and foremost we must look into the project’s viability.
Taking into account the difficulties and outcomes of HRT, Virgin/Marussia/Manor and Lotus/Caterham, we must not think we would win or be at the sharp end of the field, most likely we would be at the back of the field. The plan has always been a three-year project and to continue if at that point we felt the need to continue. Many of the technical solutions are discovered not by a single genius, but from several people’s collective effort, and also sometimes by “accident” or coincidence as an engineer is responsible for just a small part of the car and the aerodynamicist can design and test more than 200 versions of the same part during the car development cycle.
It was considered that department chiefs would have to be persons with F1 experience but the rest of them would not need experience in a particular area. There are not that many aerodynamicists out there or brake cooling design specialists, but there are engineers with aerodynamics or heat transmission knowledge.
Those who design road car suspensions know the fundamentals to do the same applied to a F1 single seater. Quality of universities in Portugal is very good and most engineering students finish their courses well prepared to get to work.
Even though it’s often said that courses lack real life exercises, the reality is that experience is only gained during professional life while university gives us tools to understand why to do something in one way or another”, said João Correia.
The conviction that Portugal needs more youngsters with great potential is shared by Ivan Ismael, Alfa Romeo Racing Aerodynamicist in F1, who said in a recent Autosport interview: “In general Portugal needs more engineers in motorsports, and specifically in F1”
How do you design an F1 single-seater?
Designing a F1 car is a complicated task for the current teams in F1, and these teams can apply their existing knowledge of what makes a race car fast, but imagine designing one from a clean sheet of paper: “The project starts with an analysis of the regulations and definition of limits and tolerances, that way you end up with a ‘box’ where the car has to fit to be legal.
The first step consists of the creation of a document of specifications which defines most of the car parameters and performance objectives, despite the fact that some of the rules relating to 2022 aren’t finalized at this point.
This general specification is obtained through the experience acquired by the department directors and compiled by the technical director. It is updated throughout the project with new information that might be relevant and lead to project design changes.
A detailed plan of deadline dates for component production, along with a provisional list of which upgrades to bring at which races, is set up next. In the initial phase, the aerodynamics department pushes with the initial project of the car and initiates the development process. The “vehicle sciences” department meanwhile starts simulations to optimize the suspension geometry, the first predictions of possible lap times, etc.
The monocoque will be the first part sent into production, but before that, it passes from the aerodynamics department to the department of structural analysis and the composites department.
At the same time, the department of mechanical design and systems finalise the design of their components. This follows a highly iterative process where components are improved step by step until a specification has to be finalised to be sent into production”, explains João Correia.
What could be made in Portugal?
One of the concerns for the project was to decide what could be built and developed in Portugal. 7 of 10 of the current F1 teams are based in England, and the others, Ferrari and Alpha Tauri are in Italy and Alfa Romeo is based in Hinwil, Switzerland.
Between structural and non-structural components, what would be made in Portugal?
“The aim was always to manufacture all metallic components in Portugal because we have that capacity. I think wheels and dampers would be the only components that would need to be brought from the outside.
The idea was to outsource structural components made of composite material (monocoque, nose, rear impact structure, floor) in the first year, and with the passing of time bring these components to Portugal when the capacity and know-how is available in Portugal.
Non-structural components in composite material (sidepods, engine cover, endplates, aerodynamic components that do not suffer significant stress) would be manufactured in Portugal. No plans were made for the front and rear wing, as more analysis was needed for these complex elements.
Ideas had also been formed about a potential location of the team’s factory in Portugal.
“The selection for the location of the team’s factory would only be analysed on a more advanced phase/stage when we had a certain percentage of the budget guaranteed, and a degree of certainty the project would go forward.
Obviously, for the location, access to an airport, enticing location for foreign personnel to come live in Portugal, access to infrastructure for marketing purposes (for example Autodrómo Internacional do Algarve) and proximity to international borders are all important factors to take into account.
Despite this being an unanswered question, maybe the order of preference was Algarve, Lisbon and Porto. Other locations were considered, however there would be compromises regarding the level of access to an airport and being an enticing place.
The idea included a support office in England as well, next to the wind tunnel, for the aerodynamicists, support team and personnel who had to go to England for meetings and have a site to work when necessary.
With permission adapted from an article in Autosport Portugal magazine. www.AutoSport.pt
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