Q&A with McLaren Automotive
McLaren’s Executive Director for Commercial and Legal, Ruth Nic Aoidh, talks to Ellis Davies about the company’s new factory in Sheffield, UK, and its approach to sourcing and manufacture.
Tell me about your work at McLaren
My job is to ensure that the sourcing decisions we make meet the long-term business plan in regards to the delivery of parts but also the potential growth opportunities for where we want to go as an organisation.
I have been with McLaren for 10 years. My current position is Executive Director of Commercial and Legal, but I originally joined the organisation as a legal advisor, coming from a law firm background. McLaren Automotive wasn’t established until 2010, one year after I joined, so I was involved in the setup of the company and played an integral role in the growth towards what it is today.
In my current job I sit on the executive team and, with my colleagues, am responsible for the business plan and its implementation, and the day-to-day management of the company. I also sit on the shareholder board of directors as Company Secretary, so engage with the company shareholders on a very regular basis. In terms of my operation remit, it really covers all of our external engagements, such as the supplier strategies and working in conjunction with the purchasing team.
I’m also responsible for all the indirect procurements for McLaren, with a team that has been integral to the setting up of operations in Sheffield, UK. My team looks after the business side of the establishment of the facility and structures that will allow the company to deliver tubs [the internal structure that seats the driver] from the factory from the end of 2019. I also look after government affairs – all of our engagement with national and local government and with regulators across the globe.
What is McLaren’s sourcing policy?
One of the interesting things in terms of our sourcing strategy is how it has evolved from day one. In 2009, we were looking to establish a supply chain from scratch and had an idea about the car we wanted to build – which ultimately became the 12C – and needed to find suppliers that would provide the correct parts. We can be an interesting organisation to work with in that we make no apologies for pushing the boundaries of technology – so we can be challenging to work with, in terms of our expectations concerning the components delivered to us. But there are also challenges in the supply chain because of our volumes.
While we have very healthy volumes for our segment of the market, in terms of the automotive industry as a whole they are considered low. So McLaren decided very early on that it needed to take a slightly different approach to sourcing, and to look for suppliers that will partner. For us, it’s not about just buying parts from a supplier for the cheapest price, but building a partnership where we look to push the boundaries of technology around the components, working together to mutual benefit and wanting a supplier that is comfortable with growing alongside the company. The supply chain has had to grow with us, from 500 cars to 1,500, 3,000 and then 4,800 cars in 2018. We’ve taken a longer term, but very much a partnership approach to how McLaren selects and works with suppliers.
Why did you choose Sheffield for the new facility?
First of all, it is important to mention the components that will be produced in the Sheffield facility. Carbon fibre has been at the heart of what McLaren does since it was first introduced into the F1 cars in 1981. Every car produced since then has incorporated carbon fibre – it’s central to the cars. That technology and the way it has evolved is something we believe is a point of strength for us, and important, not just for the performance of our cars, but in the context of the move towards electrification.
We see electrification as a challenge, but also as progression in the automotive industry. What that would bring to cars is heavy batteries, and if you’re going to add weight, efficiency will drop. Therefore, the rest of the car must become lighter. McLaren believes that lightweight structures are key to making sure that electrification works because you need to offset the added weight with lighter materials elsewhere. We see our relationship with carbon fibre, and the manufacturing process we developed around it, as fundamental to the company going forward and how the automotive industry evolves.
We carried out a study to look into whether working with a third party supplier for our tubs was the right way forward. This decision was driven by our researchers, who have produced some interesting ideas around the manufacturing of carbon fibre and how it is used. Looking at their proposals, which are now being implemented, it seemed logical to take control of the entire supply chain for the tubs.
We then looked at where we would do that and, frankly, Sheffield was one of the easiest answers. It’s an area with significant manufacturing heritage, with ingrained understanding of what we’re trying to do from a manufacturing perspective. It has existing experience in lightweighting, so we weren’t going to have to introduce a new technology that would need to be taught from scratch. There is also prior expertise in innovating and improving manufacturing process – so, again, there was a good foundation to build on. There is a strong link between the University of Sheffield and the Advanced Manufacturing Research Centre (AMRC), UK, which offers a depth of expertise already and allows us to build a future workforce, creating a centre of excellence around carbon fibre.
Will some of the AMRC staff working with McLaren be permanently joining?
The reason our employees have been working at the AMRC is because this project kicked off about two years ago. What we’re doing in Sheffield isn’t just building a factory to produce tubs, there is a significant amount of R&D involved in improving and innovating the manufacturing processes. Working with carbon fibre, which at the moment is a very labour-intensive activity, and the project is looking at what can be done to improve this towards industrialising carbon fibre for higher volumes.
The AMRC team has been working on the development side of the project, and the AMRC provided us with space for 40 people to get the ball rolling, but we now have our own factory that opened in November 2018 and the team has relocated. We should have up to 200 people employed in the factory by 2020.
Do high-performance car manufacturers make changes that would become industry standard?
I think that’s what happens in our segment of the market. Through the team we have and the type of product that we produce, we have the ability to push the boundaries of what is possible. In our market segment it is possible and there is an expectation that we will introduce new technologies, which ultimately trickle down into more mass-market products. From our perspective, we think that lightweighting coupled with electrification is something that at a strategic level in the wider automotive industry is of great importance.
It’s also worth flagging all of our activity in development and engineering over the past few years, because we don’t just see what we’re working on
as purely automotive.
As a company, McLaren is focused on getting technologies and processes in place so that we can manufacture tubs, but the work is potentially relevant to other industries. One of the things that attracted the company to Sheffield was the presence of
other such industries.
What is more pressing – lightweighting or battery development?
I think they go in parallel. From our perspective, we’re looking to have fully hybrid or electric engines in all our cars by 2025. We are on the road to electrification, but have done this in parallel to our lightweighting activity and don’t see one coming before the other. They work together and should be complementary.
Lightweighting is becoming more important and relevant in the wider industry, but McLaren has had
it since the early 1980s. We’re all about lightweight, it’s not new to us but it’s newer in the automotive sector at large.
How does McLaren fit with the Northern Powerhouse?
One of the things that really stood out in our engagement in Yorkshire is that the region is very pragmatic and a very positive place to do business. It has a complicated regional structure and the potential to be a difficult region to navigate, but it was the opposite in our experience. We have never experienced any local politics, just absolute pragmatism and a real desire to do business. It is a very open place to work, and I think the region itself recognises the need to be on the front foot in terms of establishing and protecting the ability to have a future workforces.
The relationship with the University of Sheffield and the AMRC is also important, and looking at the structures they already have in place, such as building workforces and expertise. Their apprenticeship centre is a bespoke facility to put apprentices through training courses and ensure those courses are relevant to the businesses in the local area, essentially allowing people, old and young, to develop a clear career path. This sets the foundation for industry in the region,
and was one of the things that really attracted us
to that location.