Friday 19th September 2014

Lotus jobs at risk

Up to 325 workers could go as part of Group Lotus restructuring

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Whenever an email with the subject "statement from Group Lotus PLC" arrives you can't help but assume the worst, given what's been happening at Hethel over the last few years. Unfortunately that's the case this time as well with a planned reshuffle of the global workforce that, according to the statement, "may involve the loss of up to 325 jobs."

Gales has been Lotus CEO since May

Lotus states there is a need 'to both reshape its organisation and reduce costs' to protect the company's future. We're told that sales have improved recently they are evidently still not where required. Of course the plan is to redeploy existing staff wherever possible but with further recruitment for key roles "to help achieve the best possible structure and skill base."

Group Lotus, the parent company of both Lotus Cars and Lotus Engineering, says the next step is to consult with workers' representatives on how job losses can be avoided, but it does sound like large scale redundancies are very likely.

Lotus CEO Jean-Marc Gales said: "We deeply regret the potential impact any reshaping of the business may have on our employees and their families. We have worked very hard to avoid the need to make the proposal, but do believe that it is now essential".

So the immediate future looks bleak - but if severe measures save Lotus's future does it become a price worth paying?

Gales has stressed the potential benefits of Lotus's restructuring, adding: "Once the reshaping has been undertaken.. Lotus should be a more competitive organisation, focusing on both producing class-leading sports cars and innovative engineering".

Potentially a huge change for Lotus then. We'll keep you posted as more details emerge over the coming weeks.

[Chris Y]

That sounds bad. I hope things pick and people get re-employed asap. The Elise is the best fun per pound car on the planet and must survive!

[FWDRacer]

Great news for Nissan, Toyota, JLR... Skills shortage within the industry - good quality people will be welcomed everywhere.

[scampbird]

They do this nearly every frigging year!

[crugbun]

Does Lotus actually contribute to the F1 team or does that money come from somewhere else?
If they do, perhaps that money could be better spent.

[a1burns]

I live near the Lotus plant(ish...) and when I was job hunting recently there were quite a few for Lotus so I find this surprising really.

[k-ink]

I supported Lotus back when their prices were sensible-ish. I had a new 111R for £27k. Once their prices went mental I lost all interest. The higher the prices the more people walk away, so they have to raise prices agin, etc. Now they are heading towards borderline high end exotica. It is a shame Lotus did not adopt the opposite policy: only build one model which many more could afford to buy. Then offer aftermarket upgrades, like Ford in USA do. They seem to go from grand plans to bust over and over. FFS, just make ONE SIMPLE CHEAP CAR. Forget high end. Forget making a whole range.

Something tells me this will go on forever. Maybe Ginetta or Caterham will take over where the Lotus Elise mk1 left off and put Lotus out of their misery.

[smilo996]

Oh Turnips, not again.

Unless production is moved out of the country, how is reducing the number of employees by 325 going to allow then to build more and new cars.

I just wish someone would sell Cosworth to Lotus and give then 500mn to built a 3 new cars.

[Theallotmentman]

Sadly this has long been expected and it's very sad to read about without feeling for those who will lose their jobs. Lotus are sucha special, purist company but they must come up with a better model range to get the money in. They are selling in too smaller numbers with not enough profit per vehicle to sustain a viable business.

[GTEYE]

k-ink said:

I supported Lotus back when their prices were sensible-ish. I had a new 111R for £27k. Once their prices went mental I lost all interest. The higher the prices the more people walk away, so they have to raise prices agin, etc. Now they are heading towards borderline high end exotica. It is a shame Lotus did not adopt the opposite policy: only build one model which many more could afford to buy. Then offer aftermarket upgrades, like Ford in USA do. They seem to go from grand plans to bust over and over. FFS, just make ONE SIMPLE CHEAP CAR. Forget high end. Forget making a whole range.

Something tells me this will go on forever. Maybe Ginetta or Caterham will take over where the Lotus Elise mk1 left off and put Lotus out of their misery.

+1

I don't really understand the current range or who exactly they are aimed at. There seem to be too many variations which seem to be crossing over each other. Nice enough car that the Elise and derivatives are, the prices just don't add up, and that is clearly reflected in the sales volumes.

Totally agree with the comment above, Lotus now more than ever need to keep it simple, and try to rebuild from there.

[JoeNorton]

K-Ink, can't help thinking you're right.

If Lotus focused on a proper successor to the original Elan they'd have a viable MX5 rival not just on spec, performance and equipment but also on price and market placement.

Sure, the Elise is a lot of fun but it's not an every day car like an MX5, and let's face it, that's where the money is.

Carpets and a stereo, power steering, nippy little engine, good chasis and a canvas roof, surely that's a winning formula?

Who's buying an Evora anyway?

[k-ink]

JoeNorton said:

Who's buying an Evora anyway?

I suspect LOADS of people admire them, but don't actually buy them. Everyone is waiting for a half price used example, which of course does not help Lotus at all.

I think they need to remodel their entire company around Caterham: one car, developed it, accept you will always be relatively small and niche, walk and don't fall over trying to run.

I agree the model they make would be better if it were more like an MX5 mk1, but lighter. They would sell tons compared to what they do now. Imagine if they could just pinch 5-10 % of MX5 sales.

[kambites]

JoeNorton said:

Carpets and a stereo, power steering, nippy little engine, good chasis and a canvas roof, surely that's a winning formula?

It's a winning formula if you have the resources and infrastructure to compete head on with MX5. Lotus don't and almost certainly never will. Mazda almost certainly couldn't build the MX5 at its current price if they weren't also building hundreds of thousands of hatchbacks.

Lotus are stuck in a no-mans land between mass production and small volume specialist products and I can't really see a way out in either direction.

Edited by kambites on Friday 19th September 10:09

[Paracetamol]

Lotus cars is all but dead...its only real hope was the Bahar plan. Fine- he was a bit extravagant, but with the right backing it would have worked. The new owners are clearly killing it and will probably stop to leave the consulting and engineering business. Total shame and a waste of a great brand...TVR the sequel..

[sideways man]

The original elan was never a mx5 level competitor.
In built up form it was very similar in price to the E Type Jaguar.

Lotus low cost model was the 7,which they sold to caterham because of the desire to move upmarket when the elan was introduced.

Some things never change.

[HeMightBeBanned]

k-ink said:

I suspect LOADS of people admire them, but don't actually buy them. Everyone is waiting for a half price used example, which of course does not help Lotus at all.

I think they need to remodel their entire company around Caterham: one car, developed it, accept you will always be relatively small and niche, walk and don't fall over trying to run.

I agree the model they make would be better if it were more like an MX5 mk1, but lighter. They would sell tons compared to what they do now. Imagine if they could just pinch 5-10 % of MX5 sales.

Lotus cost base is too high to make a one car model lineup pay. Their lack of volume means that the parts they buy in are also expensive. They need something priced at Evora levels to have a chance of making any profit. Alas, people struggle with the concept of a £60k Lotus - fabulous as they are to drive.

I don't think they're viable on their own and need someone with deep pockets and an aligned business to buy them, so that Lotus get access to Groupwide R&D, parts, engines etc. VW has a cash mountain but I don't think they particularly need Lotus.

[k-ink]

It does not have to compete with an MX5 on price exactly. I think that would be unrealistic for a small company. But if say 5% of potential MX5 / BRZ customers wanted that sort of car, but lighter, more focussed (carpets etc but no heavy toys), better badge lets face it, plus were willing to pay a premium for that result, then cool.

Back in the day the mk1 elise was what £22k? My mk2 111R was £27k. That is where I drew the line at spending. I think now days you would do well if you could hit the £24,995 price. Do anything possible to make that happen. If the whole company was downsized to cut costs, only made one model, maybe outsourced some key components etc. Maybe even make key components in cheaper countries then assemble in the UK to drop the price even lower. Or even use an MX5 chassis direct from Mazda! GRP body, trick bits only Lotus could do etc.

[Zoin]

HeMightBeBanned said:

Lotus cost base is too high to make a one car model lineup pay. Their lack of volume means that the parts they buy in are also expensive. They need something priced at Evora levels to have a chance of making any profit. Alas, people struggle with the concept of a £60k Lotus - fabulous as they are to drive.

I don't think they're viable on their own and need someone with deep pockets and an aligned business to buy them, so that Lotus get access to Groupwide R&D, parts, engines etc. VW has a cash mountain but I don't think they particularly need Lotus.

I largely agree with this but can't help thinking that Porsche managed it without a big brother (they only became part of VW group recently).
The key is that they need to build sports cars which people can drive as a 'daily'. I was hugely tempted by the Evora at first glance as a replacement for my ageing 911 but soon realised it wasn't an everyday proposition. This is where Lotus are failing.

[chelme]

Paracetamol said:

Lotus cars is all but dead...its only real hope was the Bahar plan. Fine- he was a bit extravagant, but with the right backing it would have worked. The new owners are clearly killing it and will probably stop to leave the consulting and engineering business. Total shame and a waste of a great brand...TVR the sequel..

Agreed. Bahar had the right vision, the others simply did not have the balls to persuade investors to deliver.

[Tuna]

Here we go again. We should have a form like the 'Supercar Press Release' that can be filled in each time Lotus gets a new boss.

I'd be interested to hear which jobs are on the line - production, engineering, sales, marketing? Against the background that this has reportedly been a good year for sales, it's particularly disappointing to see people go. On the other hand, Lotus seem to specialise in running a 'flexible' work force. Lets hope this guy sticks around long enough to push through the changes that he feels will put the company where it needs to be.

And here we go again with the commentary. If the MX-5 is such a desirable model, go and buy it. Apparently it's pretty good. Don't ask Lotus to build one though.

[robertpaulson]

Its a mental world, 'classics' shooting to the moon because nobody makes decent a analog manual sportcar anymore, yet the one company who does (imo a better driver than half the aircooled stuff out there) is about to fold due to the total lack of demand for the product in the marketplace, not sure price would make a huge difference either, the gt86/brz can be had new for 22k and thats still a massive sales flop