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If you walk the streets of St. James's, you feel the footsteps of the greats, the influential and those who do business, those who pull the strings in a corner of London that has welcomed the elite since the ages Restoration times. In the center, St James's Square, which for at least two centuries was one of the most elegant addresses in London until the arrival of gentlemen's clubs and commercial establishments caused the aristocracy to flee to nearby Belgravia.
The brass plaques next to the sturdy doors of these imposing, high-ceilinged buildings now allude to the trade of their current occupants. They are no longer houses, because the 21st century trade does not need rest. Inside it are companies that carry opaque and nondescript titles, and that specialize in things like merger arbitration and special-situation equities. Through these halls wealth flows to an order of decimals by which a simple millionaire is a true beggar in comparison.
Find out more about Aston Martin in Formula 1:The north side of the square is home to the grandest buildings, erected on the largest plots. Number 5, the former Wentworth House, built in the 18th century in the classical Palladian style by Matthew Brettingham. Lawrence Stroll set a new London rental record when he established his offices here in 2017.
A blue plaque on the adjoining building marks number 4 as the former residence of Nancy Astor, the first female congresswoman; It is now the headquarters of the Naval and Military Club, alias "The In and Out", whose president was the late Prince Felipe, and which does not publish its membership fees. Beyond the eastern row, billboards cover the demolished remains of Norfolk House, where General Dwight D Eisenhower laid out the plans for the D-Day invasion. A £72m office building has been commissioned here by a " undisclosed client". Historical wealth, power and ambition resound in this area like a high voltage circuit.
GP Racing magazine, part of the Motorsport Network, opens the door of number five and enters a space of discreet abundance: a waiting room with two leather armchairs and a wide stone staircase that leads to the offices by Lawrence Stroll. Casually dressed, he welcomes us behind a large desk illuminated by a pair of tall, wide windows that offer a clear view of the square.
Though we're talking to a man with many business interests, only one of them is reflected in the decor: an action photo of an Aston Martin Racing pit stop on the wall behind the desk, and trophies above the fireplace. The cars are designed and built 70 miles from here, in considerably less grand surroundings, but that's about to change and this is where the strings run from.
In mid-September, Stroll, along with The president of JCB, Lord Bamford -one of the co-investors that Stroll put on the table to rescue Aston Martin 18 months ago-, laid the first stone of the new factory of the Formula 1 team of the brand, which is expected to that costs between 150 and 200 million pounds (between 180 and 240 million euros). But remember that we are in St James's, where the movement of such millions is nothing more than small sums of money. The new facility, which the boss prefers to call a campus rather than a factory, will be the hub from which Stroll aims to build into a billion-dollar business under the umbrella of Aston Martin Performance Technologies.
"Unfortunately, it has been delayed by two years from the originally planned schedule due to COVID-19," says Stroll. "I was hoping we would be there today."
"The most essential tool for any Formula 1 team is to have the latest and most modern campus, it is a campus, not a factory. We will have three buildings with facilities including a restaurant, a gym and a wind tunnel. I think This sets us apart from our competitors.
"It's a huge investment. To win in Formula 1 you have to have the right leadership and vision and, like any business, you have to have the right finances. And honestly, with the new financial regulations, it will really even out." the grid. We will no longer be overtaken by our competitors: we will have the same budgets as the two best teams."
Therein lies the difference between Lawrence Stroll and others who have acquired struggling teams in Formula 1 and the world of motorsport in general in recent years. Stroll has access to capital and is not afraid to spend it, as long as the risks are properly understood and mitigated. This is in stark contrast to many would-be team owners who have sought ways to make a cheap offer, but use leveraged funds against that team's future earnings: in effect, gambling with other people's money.
When Stroll's ventures require others to come in and share the risk, he has a track record of significant profit for himself and has co-investors, which is why many of them happily return to the watering hole. Aston Martin co-investor Silas Chou, for example, earned a lavish return on his investment in the relaunch and IPO of fashion label Michael Kors, orchestrated by Stroll.
It helps that in the post-Bernie Ecclestone era, F1's commercial rights holder is taking a more collegiate and collaborative approach to growing the business. The budget cap - agreed despite the disagreement of F1's biggest spending teams - and the 200 million "entry ticket" signed in the latest Concord Pact have put the competitors in a better financial position.
Though the cap isn't going to transform the competitive landscape Immediately, it means that F1 is no longer a bottomless pit where teams spend money mindlessly. Coupled with the new barrier to entry that enshrines each team with franchise value, it makes all competitors much more financially reliable. When Lawrence Stroll bailed what was then known as Force India out of management in 2018, this was not yet a given, but it was certainly part of the new top-flight owners' plan.
"I had several meetings with [F1 CEO Carey] Chase at the time," says Stroll. "And that was a very, very important part of my decision process to buy the company or not. It had a huge influence on the decision. If there had been no spending caps, I wouldn't have done it."
"People - human capital - are a very important factor. I would never have bought a team that was between ninth and tenth position. What impressed me, and the reason for the purchase, was that it was a team which was running on a £90m budget and only 400 employees (Mercedes was spending £332m a year at the time, and had 900 employees in Brackley alone), but two years in a row it was fourth in the championship, and would have been three years without the administration. All this with a third of the budget and less than half of the staff of the competitors that were above it".
"There was already a very passionate core of 400 people here, that famous expression, who punches above all else. They were doing more with fewer employees than other teams, so it was an incredible opportunity to build on an already strong foundation. We weren't starting from scratch."
"When the company (Force India) went into bankruptcy, there was no plan at the time. After getting the asset, yes, I had a very clear vision that this is an automotive company. And I had a dream that, being based in Silverstone for almost three decades, it had to be a British brand. And for me there is only one British brand that justifies being on the pedestal of F1. And that was Aston Martin. It was kind of a dream come true reality".
The COVID-19 delay in the construction of the new "campus" has played in Stroll's favour, as plans have evolved and accommodated new developments, the main one being a change of plans in related to the wind tunnel. At first, it was not foreseen, since the team believed that it could continue to develop by renting the tunnel from Mercedes.
After a disappointing 2021 campaign (based on the team's performance last season, as well as their expectations for this one) it is understood that this is the main reason for the radical change. Having cloned Mercedes' aerodynamics concept, Aston Martin was similarly affected by the rule changes during the break and has struggled to stay competitive.
During a press conference via Zoom the week before with GP Racing, Stroll explained that technical director Andy Green had convinced him of the advantages of having his own wind tunnel, and that the crux of the conversation was "if you really want to be world champion, it's a tool you're going to need. By doing so, Stroll is going against the wind tunnel ban, which is currently being considered for 2030.
"That change of heart cost a bit of money," Stroll said at the time. GP Racing pressed him lightly on the matter, as it has become almost a cliché in Formula 1 newsrooms that any story about him will end up having an impact on his portfolio before he's even finished the first paragraph.
However, this is how he replied: "Not really. We invested to build a business for the future. I don't think I've ever spent too much, nor have I lost."
The car manufacturer Aston Martin was a totally different compared to the F1 team that has now joined the brand. Although it was doing most things right in terms of its model range - an SUV was on the way, as was a high-profile car designed in collaboration with Red Bull - its October 2018 IPO greatly overvalued the business. just as it was. When demand inexplicably plummeted throughout 2019, its share price followed a similar trajectory and went to the market to raise more cash.
Stroll's consortium rescued it from bankruptcy for the eighth time in January 2020, and as the pandemic pushed finances further into crisis, it was the Canadian who stepped in, through his investment vehicle Yew Tree, to provide what is described in the London Stock Exchange files as "£55.5m of short-term working capital support". In effect, keep the lights on and the wages paid.
The documents of the London Stock Exchange indicate the rescue plan of the consortium -better adaptation of supply to demand, greater attention to marketing, reduction of personnel in key areas, delay in the development of certain models-, but GP Racing remains curious as to where the experienced businessman draws the line between a struggling asset with plenty of potential and an irremediable basket case.
"You sit down with smart people and have a discussion," he says. "This is more than just a brand, it's an iconic 108 year old British institution. Companies like this don't come around very often, and they can't be recreated - it would take another 108 years. For me it's by far the premier brand of British luxury, and probably the world's largest luxury brand".
"And then it was a matter of understanding Well, what happened to the business? Why did it go astray? In the case of Aston Martin, after a few days of conversations, it became very clear to me what happened and what had to be done."
"There was a lot of risk when I took over (CEO) in April of last year, there were five things that needed to be reviewed. I have done that and now we are on the road to success. The business is now out of risk and the Momentum is just phenomenal, as you've seen in our numbers. And as I said in my last quarterly report, I've delivered everything I promised. So there was risk? Obviously there was. Are we past that risk yet? Totally."
These numbers are impressive, albeit with the caveat that comparing H1 2021 to H1 2020 (revenues increased from £146m to £499m, and operating losses decreased from £159m to £38m). million pounds) is complicated by the effects of the pandemic. Aston Martin has benefited from pent-up demand, but the company remains heavily burdened with debt and may be affected by the stormy weather forecast for the global economy. The City appears to be of this view, as share price growth has stalled since the start of the year, following a strong recovery in the second half of 2020.
There are also questions about the realism of the stated goal of turning Aston Martin into a world champion team within five years. Firstly, as Renault has amply demonstrated by changing its own targets over the last five years, this is easier said than done.
Potential uncertainties include the completion of the campus (the main building should be ready in 18 months, but the wind tunnel will not be operational until 2024), as well as work start dates for new staff, due to the periods they must be without work after separating from their previous teams. Alfa Romeo's Luca Furbatto will join as engineering director earlier this year, but the alleged technical director, Dan Fallows, is currently the subject of a long-running dispute with Red Bull.
The scope and scale of all this headhunting is yet another indicator of how serious Stroll is about turning his F1 team into a world championship contender as part of a "billion-dollar deal." ". He speaks of the new campus as different in form and function from the McLaren Technology Centre: the architecture will strongly reflect the Aston Martin brand and will be seen as a pleasant environment to work in, best for recruiting and retaining key staff.
"We're going to have what I think will be the best fitness center in F1 by far," he says. "You'll be able to run outside, walk and we'll have outside entertainment, therapists, fitness instructors and physical therapists. It's all about a healthy body, a healthy mind." In the plans for the three campus buildings, the one in the center focuses on that, on well-being and will have the best restaurant in F1. We're going to have lots of farm-to-table food, with morning and evening fitness classes. The better you feel, the better you will think."
While the design and construction of road cars will continue in Aston Martin's base in Gaydon, some design and technology functions are expected to move to the new Silverstone campus, where they will join other "to be determined" businesses. The F1 and road car business now operates under the broader umbrella of Aston Martin Performance Technologies, for which Stroll has hired former McLaren man Martin Whitmarsh as managing director.
McLaren recently sold its Applied division, a move that CEO Zak Brown said was a strategic move because McLaren was more of a racing organization than a technology company. Stroll, curiously, does not consider them to be mutually exclusive.
"Formula 1 will be one of the main pillars, by far, of this group," he says. "We will also have other businesses under Performance Technologies, and in the coming years other racing activities perhaps. We will have a group of 700-800 professionals who will have knowledge that can be shared in other fields of business."
"I don't see having a performance technology business as a distraction from F1. The goal of this is to be world champions, that's the purpose of the new campus and the recruitment drive. Everything is grounded and focused in Formula 1", he concluded.
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