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McLaren use F1 success to build conglomerate

  • Story Highlights
  • Dennis grows McLaren from F1 team into hi-tech business conglomerate
  • McLaren group produces everything from sports car to medical equipment
  • Lake at company base is used to catch waste heat for re-use in building
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By Glen Scanlon
For CNN
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LONDON, England (CNN) -- The lake that laps McLaren's headquarters may look purely ornamental, but there is no place for idle fripperies at the company's UK base.

McLaren boss Ron Dennis has helped turn the team into a business conglomerate earning millions of dollars.

It is put to work harnessing the waste heat generated by McLaren's manufacturing and wind tunnel testing and re-used to heat and cool the giant 57,000 square-meter complex.

It is an example of the thinking that has seen the McLaren Group, the holding company behind the Formula One team, grow from its foundation in 1981 into a hi-tech conglomerate with an annual turnover worth hundreds of millions of dollars.

The group, formed after CEO Ron Dennis and TAG's (Techniques D'Avant Garde) Mansour Ojjeh became friends, has leveraged off its Formula One expertise and reputation to build a diverse range of businesses with interests in automotive products, electronic systems, medical equipment and marketing and catering.

McLaren Racing, the Formula One focused division, employs 550 people.

McLaren Automotive builds the luxury Mercedes-Benz SLR McLaren sports car which retails for at least $500,000.

Its electronic company, in partnership with Microsoft, began a three-year contract this season to supply Formula One's teams and engine makers with their electronics and software. The 130-strong workforce also supplies parts to teams competing in the World Rally Championship, Indy Racing League, NASCAR, Le Mans, ALMS and MotoGP.

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Meanwhile, its Applied Technologies division has built an eclectic range of goods including a seat system for the US Marine Corps to protect them from mine blasts, a lightweight carbon leg brace with micro-hydraulics and a wireless device that monitors a patient's vital signs.

Dennis and the TAG Group still control 30 percent of the group, but Daimler -- parent company of Mercedes-Benz -- bought a 40 percent stake in 2000 and the Bahrain Mumtalakat Holding Company snared 30 percent last year.

Dennis, who has been involved in motor sport for more than four decades, has been the driving force behind the group's expansion.

His ethos, revealed again last month at a motor sport forum in Bahrain, is driven by the "relentless pursuit of perfection."

Dennis outlined his approach by quoting Abraham Lincoln.

"'If I had eight hours to cut down a tree, I'd spend the first six hours sharpening my axe' -- there's a huge amount of relevant truth in that. Extensive preparation doesn't only produce a better result, it produces that result more quickly too."

The group's Woking base is an example of Dennis's attention to detail. The award-winning building includes design studios, laboratories, machine shops and a wind tunnel.

And, as Dennis likes to highlight, the lake is not "merely ornamental."

"We have a department... whose objective is to find ways of running our building in an ever-leaner, ever-greener way. Its target is clear: to reduce fixed operational costs by a percentage equal to or greater than the prevailing rate of inflation, every year."

Dennis, who according to reports demands cleanliness, studied lighting, perfect air temperature and tasteful decoration, wanted a building that reflected his company's hi-tech aspirations.

"Put a man in a dark room, he's hot, it smells bad, versus a guy in a cool room, well-lit, smells nice," he said to the International Herald Tribune prior to its completion in 2004.

"When you throw a decision at those two individuals, who's going to be the better equipped to effect good judgment and take a good decision?"

Today, he remains firmly focused on the business of Formula One.

"We should never forget that entrepreneurship was how we got to where Formula One is today... [it] is a very important word. Entrepreneurship remains essential to the future development of Formula One."

Dennis's particular brand of entrepreneurship has been at the heart of McLaren's success for the past 27 years.

All About Ron DennisMcLaren F1Formula One RacingMercedes-Benz SLR McLaren

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