Last week I enjoyed a couple of days at Cosworth in order to write a story for the magazine about the company’s expansion in recent years into businesses beyond motor racing. Cosworth was bought from Ford six years ago by Kevin Kalkhoven and Jerry Forsythe and under CEO Tim Routsis’s leadership the renowned engine-building company has moved aggressively into many other non-racing businesses which now comprise three-quarters of Cosworth’s income.
Among other things Cosworth builds UAV engines and data loggers for the aerospace and defence industries, electronic data loggers for the marine and aircraft industries, monitoring systems for clean technology windmills, engines and tuning components for the road car industry and has expanded into many other areas of mechanical and electronic engineering.
Cosworth also returned to Formula One this year and has been quite successful with Williams who will continue to lead the company’s F1 attack next year. The people at Cosworth are proud that – with Williams at least – their latest F1 engine has proven itself competitive with the heavy hitters. They’re also proud that prior to next weekend’s inaugural Korean Grand Prix their V8 stands as the only engine in F1 with a perfect reliability record.
Cosworth intends to continue to compete in F1, but the focus for the future is on its diversification, which has made the Northamptonshire company infinitely more stable and profitable. CEO Routsis credits Cosworth’s racing success as the key to its expansion outside the sport.
“I think it would be true to say the brand name was pivotal in the success of the diversification of Cosworth,” Routsis remarked. “I would go as far as to say that if we had exactly the same people, skills and equipment but we hadn’t got the brand name from racing the story may well have had a different ending.
“I’m glad to say that by the end of 2007 we had got to a position of being able to win substantive multi-million pound orders in adjacent industries and by the end of 2008 the business was solidly profitable. By the end of 2009 it was completely debt-free and this year the business has doubled over the size it was this time last year. So it is a very counter-trend story in today’s economy.”
Routsis has no doubts that F1 and racing in general must adapt to the changing times both technically and economically. “In the longer term I think the sport has some challenges in front of it,” Routsis observed. “It has to address its perceived image of offensive excess in certain areas. That is certainly something that is recognised by the thinking people within the operations of Formula One. A huge amount of effort is being put in place to try and map out a future which preserves the things that are best about Formula One, but equally recognises that the world is a changing place and Formula One has to fit with the world. It cannot take a risk of becoming anachronistic because if it does it won’t have a future.
“Our expectation is that we will be present in the sport in 2013 – when the new engine regulations come in – as providers of an entire powertrain. We will expand away from the traditional areas of just providing the internal combustion engine. What’s very clear is if you look at the technology road maps both in sport and automotive, powertrains are going to be about much more than just the internal combustion engine. That’s where Cosworth is going to be positioning itself in both the sport and the premium performance, low-volume automotive market.”
Over the past five years Cosworth has adapted superbly to the changing world. Here’s hoping F1 and motor sport in general can learn from Cosworth’s successful transformation.