RE: Is Lotus in proper bother this time?
Discussion
Tuna said:
It seems to me that some people won't be happy until Lotus have been talked into the ground. Then they can walk away smugly declaring "Told you so".
Given that Lotus were committed to a 500 million pound turnaround programme by their owners, Proton, it's not all that surprising that two years into that five year plan, they're 200 million down. That's better than I'd expect.
The bottom line here is that Lotus are fighting for their lives because of the political situation in Malaysia, not Bahar's work. They borrowed money to change the company, and then have been put out to dry a year before the first (and by far the most important) car could be released.
All the (delighted) hand wringing about F1, branding and Swizz Beats misses the point that those deals probably cost Lotus a fraction of the money being put into pulling the rest of the company out of a hole. Compare the loud denunciation of Lotus for (shock horror!) updating their 1970's portacabins, with the sighs of admiration at the vast glossy offices built by Mclaren.
It seems to me that the sale of the company will depend almost entirely on the state of their Engineering consultancy, and the current state of the Esprit. Those two assets will define what the company is 'worth' - not whether or not Bahar is a 'nice guy'. That's the irony - for all the public bluster, the real value of the company is almost completely hidden right now and it's that the discussions should be focussing on, not whether branded clothing was a good idea.
And, as ever people fail to understand what the company is doing. Five cars? One platform. Engines by Honda? Yeah sure, that's such a difference from the Evora engine by Toyota. Fernandez will save them? No, he wants to see them fail - it would be in his best interest. Argh.
Personally, for the amount of effort being put into changing the company, I'd like to see the folk at Hethel be given a chance to show what they're capable of. Sadly the sheer quantity of bad will and FUD being thrown at Lotus right now could well doom the company.
Beautifully written Given that Lotus were committed to a 500 million pound turnaround programme by their owners, Proton, it's not all that surprising that two years into that five year plan, they're 200 million down. That's better than I'd expect.
The bottom line here is that Lotus are fighting for their lives because of the political situation in Malaysia, not Bahar's work. They borrowed money to change the company, and then have been put out to dry a year before the first (and by far the most important) car could be released.
All the (delighted) hand wringing about F1, branding and Swizz Beats misses the point that those deals probably cost Lotus a fraction of the money being put into pulling the rest of the company out of a hole. Compare the loud denunciation of Lotus for (shock horror!) updating their 1970's portacabins, with the sighs of admiration at the vast glossy offices built by Mclaren.
It seems to me that the sale of the company will depend almost entirely on the state of their Engineering consultancy, and the current state of the Esprit. Those two assets will define what the company is 'worth' - not whether or not Bahar is a 'nice guy'. That's the irony - for all the public bluster, the real value of the company is almost completely hidden right now and it's that the discussions should be focussing on, not whether branded clothing was a good idea.
And, as ever people fail to understand what the company is doing. Five cars? One platform. Engines by Honda? Yeah sure, that's such a difference from the Evora engine by Toyota. Fernandez will save them? No, he wants to see them fail - it would be in his best interest. Argh.
Personally, for the amount of effort being put into changing the company, I'd like to see the folk at Hethel be given a chance to show what they're capable of. Sadly the sheer quantity of bad will and FUD being thrown at Lotus right now could well doom the company.
+1
Lotus in 'positive discussions' with DRB-Hicom | http://www.4lot.us/476e
Tuna said:
It's interesting that all of the negative stories about Lotus in the last year seem to have come from a small number of people who have a vested interest in them failing. It doesn't help that the internet, and Brits in particular love a failure far more than a success story.
Genuine questionWho has a vested interest in them failing?
Here's IMO a list of Lotus' top 10 priorities for this week, this month and this year,
1. Get the Exige convertible built, in showrooms and in the hands of customers
2. Get the Exige convertible built, in showrooms and in the hands of customers
3. Get the Exige convertible built, in showrooms and in the hands of customers
4. Get the Exige convertible built, in showrooms and in the hands of customers
5. Get the Exige convertible built, in showrooms and in the hands of customers
6. Get the Exige convertible built, in showrooms and in the hands of customers
7. Get the Exige convertible built, in showrooms and in the hands of customers
8. Get the Exige convertible built, in showrooms and in the hands of customers
9. Get the Exige convertible built, in showrooms and in the hands of customers
10. Get the Exige convertible built, in showrooms and in the hands of customers
Everything else is just dreams.
1. Get the Exige convertible built, in showrooms and in the hands of customers
2. Get the Exige convertible built, in showrooms and in the hands of customers
3. Get the Exige convertible built, in showrooms and in the hands of customers
4. Get the Exige convertible built, in showrooms and in the hands of customers
5. Get the Exige convertible built, in showrooms and in the hands of customers
6. Get the Exige convertible built, in showrooms and in the hands of customers
7. Get the Exige convertible built, in showrooms and in the hands of customers
8. Get the Exige convertible built, in showrooms and in the hands of customers
9. Get the Exige convertible built, in showrooms and in the hands of customers
10. Get the Exige convertible built, in showrooms and in the hands of customers
Everything else is just dreams.
odyssey2200 said:
Tuna said:
It's interesting that all of the negative stories about Lotus in the last year seem to have come from a small number of people who have a vested interest in them failing. It doesn't help that the internet, and Brits in particular love a failure far more than a success story.
Genuine questionWho has a vested interest in them failing?
Fernandes: Likewise, if he is really still interested.
I'm not in a position to pretend to know what the required business model is to redeem Lotus' situation, but if anyone on here actually does, then they shouldn't be posting on here, they should be on their way to Hethel to explain it to someone!
I truly miss TVR and I think that British society, not just it's automotive industry is poorer without it. The thought of us potentially losing what I see as the final bastion of British Automotive Genius horrifies me and my one hope is that they can come out of this in one piece and in a position to design and deliver cars that are true to Chapman's values.
I truly miss TVR and I think that British society, not just it's automotive industry is poorer without it. The thought of us potentially losing what I see as the final bastion of British Automotive Genius horrifies me and my one hope is that they can come out of this in one piece and in a position to design and deliver cars that are true to Chapman's values.
Tuna said:
It seems to me that some people won't be happy until Lotus have been talked into the ground. Then they can walk away smugly declaring "Told you so".
Usually, when a British car maker is on the brink, I'd be agreeing with this statement. Not this time, however.Tuna said:
Given that Lotus were committed to a 500 million pound turnaround programme by their owners, Proton...
Lets stop right there as the rest is irrelevant. Lotus were never a strong enough brand to support a 500 million pound debt. Everyone could see it apart from apparently some folk sitting around a table in Malaysia seemingly with money to burn.Many of the comments in this thread come from people who would give anything to see Lotus survive, let alone prosper, but the truth is most likely to be that they died when Bahar convinced their owners to hang a 500 million pound weight around their necks.
They walked straight into an all-or-nothing scenario. Either the 500 million was spent and they miraculously pulled it off, or as we all feared/expected, the tap would be turned off and Lotus would have nothing to show for an unfeasibly large debt. Well it looks like the latter 'may' be happening.
Q Car said:
I'm not in a position to pretend to know what the required business model is to redeem Lotus' situation, but if anyone on here actually does, then they shouldn't be posting on here, they should be on their way to Hethel to explain it to someone!
I truly miss TVR and I think that British society, not just it's automotive industry is poorer without it. The thought of us potentially losing what I see as the final bastion of British Automotive Genius horrifies me and my one hope is that they can come out of this in one piece and in a position to design and deliver cars that are true to Chapman's values.
Well said, looking at the TVR Factory Photos thread, almost brings a tear to my eye.I truly miss TVR and I think that British society, not just it's automotive industry is poorer without it. The thought of us potentially losing what I see as the final bastion of British Automotive Genius horrifies me and my one hope is that they can come out of this in one piece and in a position to design and deliver cars that are true to Chapman's values.
Tuna said:
Sadly the sheer quantity of bad will and FUD being thrown at Lotus right now could well doom the company.
You really think that they are that fragile that some doubts on an internet forum could be the final straw? If they are in that predicament, then there is something fundamentally wrong.I'm sure that almost everyone would love to see Lotus thrive, but feels quite uncomfortable with the direction that it's taken under DB.
groomi said:
Many of the comments in this thread come from people who would give anything to see Lotus survive, let alone prosper, but the truth is most likely to be that they died when Bahar convinced their owners to hang a 500 million pound weight around their necks.
They walked straight into an all-or-nothing scenario. Either the 500 million was spent and they miraculously pulled it off, or as we all feared/expected, the tap would be turned off and Lotus would have nothing to show for an unfeasibly large debt. Well it looks like the latter 'may' be happening.
Agree.They walked straight into an all-or-nothing scenario. Either the 500 million was spent and they miraculously pulled it off, or as we all feared/expected, the tap would be turned off and Lotus would have nothing to show for an unfeasibly large debt. Well it looks like the latter 'may' be happening.
Edited by MX7 on Wednesday 11th April 16:12
It appears that Lotus recently have been trying to get the equivalent of many years marketing exposure in a shorter time frame as possible, part of this has been trying to build a lifestyle brand rather than just a name known to 'car people' or F1 fans. However much one hates the leather jackets and key rings, it must be a good source of revenue and profile raising otherwise the rest of automotive industry would not be doing it.
Additionally they have worked very hard on promoting their racing heritage, something which has not been done properly for a long time. Their efforts in Indycar, F1, GT racing as well as Kart racing really should be applauded and viewed as a positive though it could be too much too late.
In turn over time their current strategy should increase brand profile which in turn increases desirability and therefore the potential customer base. The debt issue withstanding the Lotus PR guys have worked very hard to keep Lotus in the news whilst not really having anything to say.
We have no idea what has been or is going on behind the scenes at Lotus or whether things are as rocky as some of the press seem to say, there sometimes does appear to be agendas at play plus they do make good copy.
For example they had the rug pulled on them when under GM ownership when the Elan was canned and they were starved of funds, then Bugatti International had financial difficulties and then Proton's owners (a government no less) decided they had enough of the car industry.
In the era of cheap and easy credit debt was the most efficient way to manage a balance sheet as interest payments come before tax. Many quoted companies were constantly under pressure to gear up their balance sheets and return cash to investors in the form of dividends and it was easy to rollover debt and refinance. I don't know if Lotus paid any dividends to Proton but many companies have had issues since the credit markets dried up - especially capital intensive businesses which are effectively a luxury consumer business (Lotus Cars) whilst Lotus Engineering do seem to be very busy.
Additionally they have worked very hard on promoting their racing heritage, something which has not been done properly for a long time. Their efforts in Indycar, F1, GT racing as well as Kart racing really should be applauded and viewed as a positive though it could be too much too late.
In turn over time their current strategy should increase brand profile which in turn increases desirability and therefore the potential customer base. The debt issue withstanding the Lotus PR guys have worked very hard to keep Lotus in the news whilst not really having anything to say.
We have no idea what has been or is going on behind the scenes at Lotus or whether things are as rocky as some of the press seem to say, there sometimes does appear to be agendas at play plus they do make good copy.
For example they had the rug pulled on them when under GM ownership when the Elan was canned and they were starved of funds, then Bugatti International had financial difficulties and then Proton's owners (a government no less) decided they had enough of the car industry.
In the era of cheap and easy credit debt was the most efficient way to manage a balance sheet as interest payments come before tax. Many quoted companies were constantly under pressure to gear up their balance sheets and return cash to investors in the form of dividends and it was easy to rollover debt and refinance. I don't know if Lotus paid any dividends to Proton but many companies have had issues since the credit markets dried up - especially capital intensive businesses which are effectively a luxury consumer business (Lotus Cars) whilst Lotus Engineering do seem to be very busy.
groomi said:
Lets stop right there as the rest is irrelevant. Lotus were never a strong enough brand to support a 500 million pound debt. Everyone could see it apart from apparently some folk sitting around a table in Malaysia seemingly with money to burn.
Many of the comments in this thread come from people who would give anything to see Lotus survive, let alone prosper, but the truth is most likely to be that they died when Bahar convinced their owners to hang a 500 million pound weight around their necks.
They walked straight into an all-or-nothing scenario. Either the 500 million was spent and they miraculously pulled it off, or as we all feared/expected, the tap would be turned off and Lotus would have nothing to show for an unfeasibly large debt. Well it looks like the latter 'may' be happening.
Absolutely spot on, nail on head...Many of the comments in this thread come from people who would give anything to see Lotus survive, let alone prosper, but the truth is most likely to be that they died when Bahar convinced their owners to hang a 500 million pound weight around their necks.
They walked straight into an all-or-nothing scenario. Either the 500 million was spent and they miraculously pulled it off, or as we all feared/expected, the tap would be turned off and Lotus would have nothing to show for an unfeasibly large debt. Well it looks like the latter 'may' be happening.
Tuna said:
It's interesting that all of the negative stories about Lotus in the last year seem to have come from a small number of people who have a vested interest in them failing. It doesn't help that the internet, and Brits in particular love a failure far more than a success story.
I've read quite a few of the threads relating to Lotus and its problems and there have been lots of complaints about Danny and his strategy but my impression is not that people have been getting pleasure out of predicting Lotus' demise. I would suggest the opposite: a lot of people are upset at the thought that Lotus is going the way of TVR and have just been voicing their concerns that the current (ex?) management team and (former)owner and making Lotus' death more, not less, likely.Danny cannot be blamed for all of Lotus' problems and I'm not convinced that there were any ways of getting Lotus out of the hole they were in. However, I do not think that Bahar's plans were at all realistic and I expect the new owners are coming to that conclusion too.
As the saying goes "if you are not part of the solution, you are part of the problem". At least in that sense, Bahar was a problem.
To compare Mclaren and Lotus is also misleading. Lotus does have racing history but it is very old. In recent years they have princially been building the Elise in various guises: a stripped out, light, relatively cheap car. Mclaren are currently a leading player in F1 and their recent(ish) road car history is the the Mclaren F1 plus the MercMclaren (not such a success). Both ultra-performance with ultra-price tags. I suggest it is easier to market a "cheaper" Mclaren that basks in the glory of the F1 than try market a "super" Lotus that is 3 or 4 times the price of their current (meaning Elise) models. That may not be fair but is how brands work: much easier to find buyers for a half-price Rolex than persuade punters to pay Rolex money for a Tissot (irrespective of how good the Tissot might be).
Got to love the British for knocking Lotus down. At the moment, everything is pure speculation, there's various stories flying around but from whom?? Not Hicom or Proton or Lotus for that matter.
I struggle to comprehend that Proton, would suddenly decide, after just 2 years on being on track decide to f**k it off, after all, the black ink is scheduled to make a return in 2014?? So why take a massive loss now??
I wonder how people would have reacted if they'd have launched the Esprit originally, then at every key Motor Show afterwards, shown the other 4 models in turn? Maybe the 5 model reveal was too much for some......
I struggle to comprehend that Proton, would suddenly decide, after just 2 years on being on track decide to f**k it off, after all, the black ink is scheduled to make a return in 2014?? So why take a massive loss now??
I wonder how people would have reacted if they'd have launched the Esprit originally, then at every key Motor Show afterwards, shown the other 4 models in turn? Maybe the 5 model reveal was too much for some......
Dodgey_Rog said:
I struggle to comprehend that Proton, would suddenly decide, after just 2 years on being on track decide to f**k it off, after all, the black ink is scheduled to make a return in 2014?? So why take a massive loss now??
Maybe their new owners/management don't want to throw good money after bad. Hundreds of millions sunk into Lotus always struck me as somewhat ambitious.
BBC said:
Lotus denies administration plans
The sports car maker Lotus has moved to quash rumours that its owners are considering putting it in administration.
Lotus was bought in 1996 by Proton, which in turn was acquired by Malaysia's DRB-Hicom earlier this year.
Reports suggested DRB-Hicom had been considering administration as a way of freeing itself from Lotus's debts.
But Norfolk-based Lotus said "at no point" had DRB-Hicom indicated that this was the case.
A spokesperson for Group Lotus said: "The new Proton owners DRB-Hicom are currently in the middle of their due diligence of Group Lotus.
"There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia.
"Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1 to bed."
Earlier in April, the Lotus F1 team formally ended its title sponsorship with the Lotus Group amid uncertainty about the group's future, but said it would continue to use the Lotus name.
The spokesperson added: "It's no secret that we are going through a very difficult time at the moment due to the change in ownership but we're doing everything we can to get through this period and come out the other side stronger than before."
In October 2011, Lotus received £10.4m of government funding and announced plans to create 1,000 jobs as part of a five to six-year expansion plan.
The sports car maker Lotus has moved to quash rumours that its owners are considering putting it in administration.
Lotus was bought in 1996 by Proton, which in turn was acquired by Malaysia's DRB-Hicom earlier this year.
Reports suggested DRB-Hicom had been considering administration as a way of freeing itself from Lotus's debts.
But Norfolk-based Lotus said "at no point" had DRB-Hicom indicated that this was the case.
A spokesperson for Group Lotus said: "The new Proton owners DRB-Hicom are currently in the middle of their due diligence of Group Lotus.
"There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia.
"Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1 to bed."
Earlier in April, the Lotus F1 team formally ended its title sponsorship with the Lotus Group amid uncertainty about the group's future, but said it would continue to use the Lotus name.
The spokesperson added: "It's no secret that we are going through a very difficult time at the moment due to the change in ownership but we're doing everything we can to get through this period and come out the other side stronger than before."
In October 2011, Lotus received £10.4m of government funding and announced plans to create 1,000 jobs as part of a five to six-year expansion plan.
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