How F1's independent teams can thrive

Both are Mercedes-powered and enjoy close ties to the Triple Pointed Star, and both have in recent times scored podiums and front row starts without converting such performances to victory under the hybrid regulations.

Both enjoy seats on the Strategy Group status without benefiting fully from Constructor Championship Bonus status; and both are based in that crescent known as Britain's 'motorsport valley'. Extending the similarities between the two Formula 1 teams even further, both have liquor companies as primary sponsors.

And both are reaching the maturation of business plans aimed at re-establishing the operations after some lean periods.

Indeed, the list of parallels between Williams and Force India are far greater than their intrinsic differences - so much so that the latter has its eyes on the former in the constructors' championship stakes - yet their business models could not be more different despite having budgets roughly in the £100million annual ballpark.

Williams is a fully-fledged constructor even supplying other teams with hardware and having a profitable sideline in engineering consultancy; Force India largely sub-contracts major activities and chooses to rent windtunnel time from Toyota rather than refurbishing its own facility.

When Williams identified the need for a new tunnel, severely handicapped team founder Sir Frank parted with his private jet despite needing it more than all other team bosses combined.

The differences start with their funding models: Williams is listed on Frankfurt's stock exchange, having as shareholders Frank Williams with 52% of stock, US investor Brad Hollinger on 15%, co-founder Sir Patrick Head holds 9%, employee funds control 2.5%, with the balance (21.6%) being publicly traded on the FSE.

By contrast, Force India has three (private) shareholder groups: Indian tycoon Vijay Mallya, who controls his 42.5% through a labyrinth of companies, Subrata Roy - who languishes in jail over allegations that his Sahara Group refused to repay investors - with an equal percentage, and the Dutch Mol family, whose 15% is a legacy from a prior investment in the team during its life as Spyker.

In fact, Williams has ultimately been controlled by Sir Frank since its founding in 1977 regardless of shareholding split, while Force India started life as Jordan Grand Prix before being sold on to Russo-Canadian businessman Alex Shnaider. When the steel magnate tired of F1 (and lacklustre results), he moved it on to the Dutch consortium, which planned to sell its road cars via F1.

When that initiative failed to provide the requisite number of car sales, the Dutch sold out to Mallya's companies, with the Mols retaining an interest that was eventually diluted to 15% via an equity for debt swap. Michiel Mol, who represents the family, keeps a low profile - as opposed to Hollinger, who attends as many grands prix as his schedule allows.

Although there are no right or wrong F1 business models - consider the essential differences between multiple champion Red Bull Racing, based in Britain to sell Austrian energy drinks via a team powered by customer Renault engines; and Mercedes, which employs 1500 heads to manufacturer virtually every item in-house at two UK bases - could Force India's model actually represent the way forward for independents?

As revealed here Williams employs around 550 heads in its F1 operation, with each of its 257 points scored in 2015 costing approximately £0.4m, while each employee contributed around half a point on average.

By comparison, Force India's numbers seem relatively unimpressive, being £0.8m and 0.4 points respectively, but that gap is gradually narrowing and is expected to do so as the second and final phase of Force India's 10-year plan instituted at the end of 2007 reaches maturity.

Williams deputy team boss Claire Williams is exceptionally proud of the scale of the team's in-house manufacture - and so she should be, for the company was originally founded by her father as Williams Grand Prix Engineering, with the accent on 'engineering'. A visit to the team's expansive Grove, Oxfordshire base reveals a cutting-edge factory that has a long history of producing grand prix winners.

Suddenly the reason for the team's 530-strong headcount becomes clear: it is able to produce 90% of a grand prix car - minus the engine, of course - in-house. During the previous KERS era Williams produced its full battery packs in Grove, while all other teams received their energy storage devices from proprietary sources.

That said, Claire does concede that the team sub-contracts when necessary. "It's cyclical, or seasonal. We do subcontract during busy periods or during peak periods," she says. Clearly not keen to speak about a competitor, she does, though, allow that if "[Force India] did not outsource, they would probably be at the numbers that we have now" - which is precisely the point of the discussion.

According to Williams it is "much more expensive to outsource than to do it yourself. As much as I'm sure all these [contracting] companies do a wonderful job, we don't have control over what they're doing. So sometimes standard and quality issues come into play".

Timing presents another hurdle. "What if we get pushed to the bottom of the job pile? We can't afford to be pushed to the bottom, so for us it's a model that works," she says, adding that Williams has "secured a [new] partnership with a supplier that is going to totally overhaul our machine shop, to bring in new resources and new machines, to replace the whole lot."

Rather than switching to outsourcing due to outdated equipment, Williams will instead fully refurbish its manufacturing operations. If ever there was a vote for in-house rather than outsource, that surely is it.

Why, then, does Force India outsource a large variety of activities, including, for example, manufacture of the chassis monocoques that last year were delayed due to cashflow, causing major testing issues?

Otmar Szafnauer, COO of Force India says: "In outsourcing the philosophical question is: if you outsource to a company who specialises in making machine parts or manufacturing carbon parts, the theory goes that they should ultimately be more efficient than a Formula 1 team who does the same.

"[Sub-contractors] have to drive efficiency in order to survive against their competitors; Formula 1 teams don't have to do that. However, those people that drive efficiency that we buy [components] from also put on profit margins. With in-house manufacture there is no profit margin, so it's a question of efficiency versus profit margin."

Szafnauer also concedes that sub-contractors could "put the team at the back of the queue", adding that it is also a question "of how quickly can you get the part onto the car? If you have in-house, you should be able to get in on tonight."

Why, then, has Force India elected to go the sub-contracting route? It comes down to a question of finances: "We are [going in-house] slowly," admits Szafnauer. "But what it takes is investment now to benefit later.

"When you're spending most of your money on going racing and being able to compete, you've got to take a halfway step backwards somewhere in order to put that investment in, so you're better off in one or two years' time."

There is, though, a happy medium. "Over time," he says, "we've got to do that. For example, we're buying new machines now and we're increasing our capacity. There's another issue for us: it's not just machines that we need to buy, it's also space to put them in and people to run them."

Talk then turns to the question of the windtunnel. Surely transporting staff and models to Toyota's state-of-art double tunnel in Cologne is a hassle a team can do without? Do the benefits really outweigh the complications?

"The windtunnel outsourcing for us is all about the quality of the windtunnel," says Szafnauer. "We have our own [ex-Jordan], it goes back to '93 or something. But it's the fidelity of the tunnel too, it's not just its age, it's 50%, [so] it doesn't have an NTS [a brand] rolling road. All that adds up."

Now Force India is contracted to Toyota for windtunnel services, the team is looking to rent or sell its own tunnel. "It can still be good for other formulas that don't use 60% models," he says. "Hopefully we'll find somebody to rent it from us. We still own it."

Force India annually agrees a timetable for windtunnel usage with Toyota, then is expected to stick with it, which can, of course, bring disadvantages, particularly if technical director Andrew Green comes up with a new concept that needs testing immediately. How does the schedule pan out in reality?

"There are some weeks when we are not in there at all, and then some weeks when we can be in two weeks in a row. So the weeks that we're not in, that's when we come up with the thinking time of 'What's the next wing that we want?'

"We produce it, we go there and test it. And a lot of our aero development is CFD right now, so we do the initial work in CFD. It kind of gives direction, then we start making the parts and we test them."

However, it is clear that Force India is increasingly bringing stuff in-house. For example, having brought CFD in-house about three years ago, it has recently increased CFD capacity dramatically, plus is busy installing a driver-in-loop simulator.

Still, Szafnauer does not foresee the team ever being at 80% levels of self-sufficiency: "I don't think we'd ever get to total self-sufficiency on the main factory. We'll always be behind something."

What levels does he believe to be realistic? "Maybe 60%, maybe 60-40 in-house, on both composites and machining."

The last-named does though present self-sufficiency issues: "Unfortunately a lot of the parts have to be made at the same time, they're not in serial, so you need a lot of machines to be working at the same time; if you're self-sufficient in the peak times of manufacturing [during winter], then in the summer you've got a bunch of people with spare capacity on that side, and that's no good either."

External sub-contracting to use spare capacity during lean periods also causes headaches, according to Szafnauer: "You can start making parts for other people, but as a Formula 1 team do you really want to focus on making parts for other people for short periods, then go back? It takes away your focus from what you should be doing.

"I still think that's sub-optimal. The optimal is when you're at peak demand you're outsourcing some, when the demand is low you make it all in-house."

Clearly, then both models work, but F1 will continue to be cost- and facility-intensive - which means there is no easy solution to the costs of manufacturing bespoke racing cars every season. This in turn plays havoc with F1's cost-cutting plans, with the situation being exasperated by constant regulation changes.

Just consider the direct/indirect costs of tooling up for 2017 when all 11 teams already have perfectly good cars, with independents such as Williams and Force India both being hit regardless of their business models. The heartening aspect is, though, that such different approaches deliver similar results if properly managed - which, ultimately is the key to success in F1.