CASE ON CORPORATE ESPIONAGE

F1 Racing : Toyota vs. Ferrari

Presented By,Sariamol,Divya,Priya,Devika,Shebin,

Thanu,Saju & Sreekanth`

GLIMPSE ON THE CASE

• Dec '03, the Italian auto giant Ferrari sued toyota charging that the latter had stolen the design for its formula one racing car.

• Ferrari claimed that Toyota's TF103 was a copy of Ferrari F2002 model.

• Subsequently, the German police arrested an aerodynamic engineer who worked for Toyota (and previously worked for Ferrari).

Role of F1 in the case

• Formula One or F1, officially reffered to as the FIA formula One World Championship,is the highest class of auto racing sanctioned by the Fédération Internationale de l'Automobile (FIA).

• The F1 season consists of a series of races, known as Grands Prix, held on purpose-built circuits, and to a lesser extent, former public roads and closed city streets.

• F1 is a massive television event, with a global audience of 600 mn people per season.

• The world's most expensive sport.

• Its high profile and popularity make it an obvious merchandising environment, which leads to very high investments from sponsors, translating into extremely high budgets for automoblie companies like Ford,BMW,Honda,Ferrari and Toyota.

• Ferrari is the most prominent in F1 races.

• Since 2000, due to increasing expenditures, several teams, including works teams from car makers.

• The teams with minimum support from the automotive industry or other F1 teams, have gone bankrupt or been bought out by companies that want to easily establish a racing team within the sport.

• From the year 2000 Toyota also stepped into this field.

• The case emerges when the F1 team claimed Toyota's TF103 similar to Ferrari F2002 model.

• Following these talks Ferrari sued Toyota charging for Corporate Espionage.

Details of the case• Two former Ferrari engineers Angelo Santini and Mauro Iacconi

accused of stealing trade secrets have been convicted of industrial espionage.

• They were charged for stealing confidential engineering data from Ferrari and using it to design cars for motor racing rivals Toyota.

• Sensitive data stolen from Ferrari - including engineering documents, test data and other undisclosed documents – was allegedly used to develop the 2002 and 2003 edition of Toyota’s car.

• Iacconi, a wind tunnel engineer who worked at Ferrari between 1986 and 2000 before moving to Toyota, said the data in question was dated and was of no value in the design of Toyota’s car.

• Security firms were quick to highlight the case as an example of the dangers of uncontrolled use of removable storage devices in facilitating data theft.

• BERLIN (Kyodo) A Toyota employee has been temporarily detained on suspicion of industrial espionage.

• The man used to work for Ferrari and is suspected of giving Toyota's Formula One team classified documents.

• German police searched the Japanese automaker's Cologne factory in western Germany and secured computers, CDs and other goods for evidence.

• Meanwhile,In Japan, Toyota released a statement saying its subsidiary in Germany has been searched by the police, but the company has not been informed of the details.

• Iacconi was found guilty of misappropriation of a CD-ROM with data, files and technical drawings, used in 2002 and 2003 to develop race cars while working for Toyota.

TECHNICAL COMPARISON :FERRARI F2002 TOYOTA TF301

TOYOTA TF103

FERARRI F2002

Toyota Justifies :Autosprint published an interview with René Hilhorst, the Dutch aerodynamicist at Toyota. He explained why he thinks the TF103 is not in fact a copy of the F2002 pointing out certain facts as :

• Front wing's profile of TF103 is completely different from the Ferrari's.

• The curvature of the flaps, the flows that affect them, the positioning of the supports from the wing to the nose, and the distance between the nose and the wing is all different.

• The aerodynamics is the evolution of the two previous Toyotas.

• In case of the tyres, Toyota use Michelin, Ferrari use Bridgestone.

• At the end of the interview he concluded -"Of course we look at every other car, trying to get some inspiration. I'd say 80% of the car is from our own ideas. Every team pays attention to others' work, to how other teams solve a problem. There are always good reasons to look at and eventually to draw inspiration."

Conclusion :Inferences from case –

• Toyota generally wanted to know what their greatest rival ferrari is doing in the F1 series inorder to be the leading in the field.

• As Toyota had only emerged into the F1 team during 2000 they were concerned to be upto mark with Ferrari.

• Toyota entered F1 in 2002 in what was viewed as an attempt to create a new corporate image but has so far shown poor performances on the racing circuit.

• From this case the general inference is - Copying competitors or beating them functionally to the market is not the key to success.

THANK YOU