Ferrari Outsources F1 Engine Design Work Dec ember 06, 2004 09:46 AM ET By RAJESH MAHAPATRA NEW DELHI (AP) - India's top software exporter Tata Consultancy Services announced Monday it has won a multimillion dollar deal with Italian sports car maker Ferrari to design Formula 1 engines. Teams of engineers and specialists from Tata Consultancy will assist in the development of a Formula 1 racing car engine for the next season beginning March, said N. Chandrasekaran, executive vice president of the company. "This is a significant win," Chandrasekaran said of the deal. "The aspect that makes it very special is that we will be doing the core work that powers the Ferrari engine for the race car division." The company wouldn't disclose the specifics of the agreement. "I can't share the size of the deal. All I can say it's a multimillion, multiyear contract," Chandrasekaran said. In Italy, Ferrari spokesman Luca Colajanni confirmed that a three-year deal was signed with Tata, but declined to disclose its value. The first group of Tata's engineers has already reached Maranello, Ferrari's headquarters, to start work on the project, Chandrasekaran said. Tata Consultancy will provide software and various automation services for Ferrari. The deal with Ferrari will help Tata raise its profile in Europe, he said, especially at a time when several orders from European companies are in the pipeline. Tata Consultancy's clients include American Express Co., British Telecom PLC, Boeing Co., and IBM Corp. The company, part of the $13 billion Tata group, exported software and related services worth $1.2 billion in the fiscal year that ended March 31. © 2004 AP
While I favor lower costs and greater advances, I do not like the smell of this one. I have a good feeling this will be what Bernie has been trying to accomplish for years: the fall of Ferrari in F1.
Although I am an F1 neophyte, I doubt Ferrari would choose a company simply for cost-saving measures. Amex, IBM and Boeing evidently speak as loudly as any cost-saving measures. Tata sounds like a world-class engineering firm. Surprising, perhaps, but Ferrari, especially Montezemolo, would not risk the crown-jewel. Would you say the same if it were an American firm with no experience in F1? Forza, Cavallini
Randy - I'm having difficulty connecting this press release with a B.E. Conspiracy, or did you mean that this will simply cause Ferrari's downfall, with B.E. smiling in the background? I don't see where the risk is involved. It sounds to me like they are outsourcing cumersome mathematical calculations to a firm specializing in this. I think the article is just worded wrong. Surely the design "philosophy" still comes from Maranello, but Tata does the computer modeling. And since this stuff was once done in house, they have people who can oversee the process to ensure quality. Or maybe I drank the Kool Aid and am seeing it through rossa colored glasses.
There's no BE conspiracy to note. It is only upon a team domination and keeping everyone on level playing ground. Each time a team starts to have a greater win over another, or holding a greater advantage over other teams, a particular technology or development is abolished. In the current case, Ferrari just has a better far developed package overall. This is the need to change rules to make everyone start from scratch. Hence, the 8cyl rule change in 2006. My comment regarding the fall of Ferrari is just a jab at the decision. Different cultures, different dollars, and the outsourcing to some countries in India has done nothing but hurt vendors from a consumer's perspective, yet they are unable to do anything about it. Will it pay off? Time will tell.
I am not sure if Indians know about engine design but they can do wonders when it comes to software and anything related to software. They may be comissioned to take a role in the engine management software? But really, this is what I was looking for all this time very appropriate for this thread: http://users.ox.ac.uk/~jesu0462/Formula1.pps
I believe this is a PR operation for Tata. What could be better to create Tata's image in europe and US? AW
TATA is one of the world's best engineering companies. Ferrari has made the right choice. For all you ignorant fools who think that TATA is is cost effective and thus a lame excuse for Ferrari to outsource please visit www.tata.com Then browse through their list of companies on http://www.tata.com/0_companies/index.htm TATA will provide diverse expertise that will enhance Ferrari's ability to remain on top of the F1 world. FIAT president, Mr Luca Montezemolo, would not allow for any sub standard partners. I pitty the idiots who would question the will and judgement of such a great leader. I also pitty those idiots for calling themselves Ferrari fans!
Blinkers firmly on this morning Imperial, I see. Hitlers supporters used to speak of their great leader in a similar vein ... others have the eyes and attitude open. It is not wrong to question the direction of a company of country under any leader ... even one that you like. It is good to check and double check ... Yes Luca has helped Ferrari in F1 back to the top, which is great, but I personally am concerned about the destruction of the brand name, via over and far too wider use. This will just cheapen the image and name of Ferrari IMO. Pete
There is a difference between checking and double checking and paranoia. I am sure the management at Ferrari have double checked and triple checked the impact of this alliance on the company and the brand name. It is also important that people in North America, Europe and Australia begin to realise that Asians are not sub standard workers. The Quality of work that TATA will provide will be 100 times better than those Cosworth, Honda, and Mercedes engines that kept blowing up this year. TATA is recognized as a leading manufacturer of parts for the autoindustry and it has a long history of outstanding research and development. People in North America, Europe and Australia should also realise that Indians can also live very comfortable lives and exceed in a variety of fields. You do not have to be born in the USA, Europe, or Australia to know how to design F1 engines. There are several engineers working for Ferrari in your beloved ITALY that were born on the Indian Sub-continent (India, Bangladesh, Sri-Lanka, Nepal, Bhutan, Burma and Pakistan). Schumacher's personal physio is also of Asian decent. Jean Todt, has himself several occasions called Ferrari the United Nations of F1. So yes, I continue to pitty ignorant people who simply judge a supply chain strategic relationship by national origin. For those ignorant people I have this to say: TATA is the biggest employer of US citizens and Europeans in India. The total exceeds over 500. SO Schatten you are wrong: NOT 65 Indians for the price of 1 Italian... IT IS IN FACT 65 "Americans"/ " Other Europeans" for the price of 1 Italian...
Wow, impressed Imperial, this time you do appear to know what you are talking about ... other than the reasons for us checking, which is perfectly normal and not paranoia. I am also impressed by your anti-racisim and sterotyping in your post! I guess many of us are a little tired of this outsourcing concept where the exchange rate makes some countries more beneficial than others ... but then we once made advances because of that too (ie. Australia). I guess also many of us are not really into this global economy BS ... Pete
Wait...who said Asians can't excel in the fields mentioned? BTW, cost is *always* an issue, to say it's not would be ludicrous.
While we would all agree that this motorsports business is just that, there are times when the bottom line can be somewhat misleading. Also, there are a few names in this world that should be diminished with great caution! For all those supporters of the marque who have invested large portions of their lives emotionally and financially in pursuit of a deeper involvement into the mystique of Ferrari, labeling an opponent of outsourcing a racist, as opposed to recogonizing their identification with Ferrari as certain nationalistic or cultural pride, is probably not going to be effective from a marketing point of view. Having a racing provenance as an aid to street car sales would seem to be a value one would not want diluted. I think most Ferrarista would not object nearly as much if the Indian worker came to Ferrari instead of Ferrari simply moving the work. A minor distinction perhaps, but a distinction of merit in my view. Finally, is all of this cost savings going to trickle down to the sticker on a street car?? I think it is not asking too much to keep the Cavallino Rampante as a pure lineage..Comments welcome from the wiser and more worldly than myself.
Wise words ... again maintaining the brand image. Something that Luca does not seem to care about IMO. Pete
As a former Boeing employee I have had contact with several employees of tata, and I can say that they truly are a talented group of engineers. As an engineer in the Aerospace industry, I have worked with engineers from india and can attest to their brilliance. The cultural significance and stature they place on scientists and engineers is truly unlike anything i've witnessed in other cultures. In india, only the best students make it into engineering disciplines, and their best universities could easily rival ours. It is common sense that india would produce some of the world's greatest scientists and many capable engineering firms. I cannot believe some of you have profiled these people and characterized their work before it has even commenced! If you left or maybe considered the world outside the US, you would realize we are not the only educated population.
I agree. I hear the rejects from their top engineering schools have backups like MIT/Cal Tech/Cal/Stanford...
Well, Luca said that this brand image explotation was a method to improve rentability without raising production volume. They keep the exclusivity of the cars but they sacrifice the exclusivity of the "name". I don´t like it, but, hey, this is not a perfect world.
Very rude xenophobic comment follows, you may be offended! I am sorry to say, but many people here in Central Europe think the italian people are a kind of gypsy. The gypsy tribes came from India. The message of this S.F. + TATA deal will be a "gypsy reunion". Gypsy are not exactly popular in Europe. Bad PR, IMHO. The common opinion about India is hell on earth: sacred cows and monkey littering the streets, children dying of malnutrition, waters infected, hindu killing muslims over rat carcasses, leprosy everywhere. You simply cannot associate that with Ferrari. It's a disaster. Even a "Made in PRC" label couldn't hurt that much.
I was the only white kid in my PhD group which consisted of 3 Indians and 2 Chinese. Either I'm pretty smart to be associated with them, or affirmative action works.
I think the majority of you guys need to take a touchy-feely bleeding heart REST! I have been involved with manufacturing my entire adult life. I have seen years of hard work and the best engineering principles "outsourced" to Mexico, Costa Rica, China, and India. And to add insult to injury, train the folks who will be replacing you. I have closed down plants in the UK and all over the US due to idiot accountants only looking at the short term. Keep the shareholders happy - this week (and pick up my bonus at the end of the year for my fabricated ROI numbers). I have seen identical products, branded under another name, surface down the street from our "partners" in CHina and India - many times made off of our tooling. The only satisfaction I got was knowing that the majority of products ended up costing the same or more (long term). Please understand I know all about ecomonies of scale and there were items that should have gone. However, I saw first hand how this blind rush to total outsourcing destroyed lives and sometimes entire towns and communities - and for what? In every instance, new product developement completely stalled out. Quality and cost issues abounded. Companies are selling their souls for a quick buck, plain and simple. What terrifies me is that many are too far gone to ever recover. With their currency pegged to the dollar, there is no such thing as fair trade with China. Anyone ever call for tech support and wind up talking in circles with a useless "engineer" in India for hours? This is not the exception, it is the rule. I have nothing against these people or their country of origin. But DO NOT tell me I am ignorant to international supply chain relationships because I have been there - and they deserve every bit of criticism, scrutiny, and discussion that can be mustered. On the other hand, I have also dealt with many reputable companies abroad and I realize phone support is a long way from engineering design. Supply chains have been around since the stone age - but not for the reasons we see today. So do not flame someone for a knee-jerk response to reality. And do not EVEN get me started with our government and university subsidized education of "people of differing nationalities" crap. These numbers are not based on merit - but headcount. Because of my education, experience, and abillity, I have always moved on to bigger and much better opportunities. So this is not a personal axe I am grinding - although it could be! Scar tissue is a funny thing, as it hones your senses. If it smells like ****, it usually is. Some of you guys need to put down your liberal rags and get out more often. Talk to someone who has been there. For you will not find reality in a magazine - or the evening news (well, some evening news ;0) ). Jim
