RE: Lotus Renews Threat To Build Esprit Abroad
Thursday 16th December 2010
Could Esprit be built alongside Boxster?Lotus says it will submit its application for a cash injection to the UK government in January, and has confirmed it will move production of the charismatic British brand's promised new models overseas if taxpayer funds aren't forthcoming.
A government grant will keep it in the UKNo figures have been released officially, the Lotus boss saying only that the application will land on the Department for Business, Innovation and Skills' doormat in the New Year. However earlier reports have suggested the price of Lotus's loyalty to the UK will be £40m. Either way, the government's response should be clear by April.
Probably...Lotus has said previously that its five model expansion plan will cost somewhere in the region of £800m.
Lotus Renews Threat To Build Esprit Abroad
Linked demand for taxpayer cash will land on coalition doormat in January
Could Esprit be built alongside Boxster?
According to the Financial Times yesterday, Lotus chief exec Dany Bahar has already spoken to Magna-Steyr in Austria and Valmet in Finland (which builds the Porsche Boxster), with a view to securing production facilities.
The threat has been out there for a while, causing consternation in the ranks of existing Lotus enthusiasts, although we still don't know if this is political gamesmanship as Mr Bahar puts the finishing touches to his demand for UK taxpayer support.
A government grant will keep it in the UK
If they (we!) cough up the cash, it will be earmarked for a new factory development at Hethel, which could also herald the creation of 1,000 extra jobs.
The bold plan is to increase sales from a little over 2,000 units to 6-8,000 units by 2015, a scheme that has been given a 60 percent chance of success by one of the 'galaxy of star's recruited to the Lotus banner in recent months - namely 'legendary' US industry executive Bob Lutz. Or to put it another way (one might possibly infer), a 40 percent chance of failure.
Probably...
Meanwhile, in yet another move to 'up the ante', Dany Bahar told Autocar yesterday that he's considering commissioning an in-house Lotus V8 as an alternative to the Toyota unit originally envisaged for the new Esprit.
Apparently potential punters aren't overly impressed by the Japanese option, but he won't make a decision until January when the funding plans are known.
Discussion
So let me get this straight....
You don't have a product that is commercially viable, so you need a grant (not a loan, a grant) to build it in the UK, and you want this money from tax revenue.
Does the treasury get shares in return? At least a fleet of cars for public use? I would personally rather grant the money to a green energy firm, or use it to bolster the NHS, or to address the pension deficit, or to improve our built environment, or... you get the point.
Jobs bla bla bla bla globalisation bla bla bla I know I know, but this really does stink.
You don't have a product that is commercially viable, so you need a grant (not a loan, a grant) to build it in the UK, and you want this money from tax revenue.
Does the treasury get shares in return? At least a fleet of cars for public use? I would personally rather grant the money to a green energy firm, or use it to bolster the NHS, or to address the pension deficit, or to improve our built environment, or... you get the point.
Jobs bla bla bla bla globalisation bla bla bla I know I know, but this really does stink.
Facefirst said:
You don't have a product that is commercially viable, so you need a grant (not a loan, a grant) to build it in the UK, and you want this money from tax revenue.
Not quite. They don't have a product which is commercially viable to produce with the UK's huge wages so they're offering the government a choice of whether to fund job creation in the UK or let it go abroad. Of course the government has every right to tell them to go build cars abroad, and probably will, but I don't see any harm in Lotus making the offer. Agree with the above. If the plant isn't financially viable then a grant will only provide temporary relief (as has happened many times, the company buggers off anyway when the terms are up)
Business and government doesn't mix.
Call their bluff.
Business and government doesn't mix.
Call their bluff.
Edited by rpguk on Thursday 16th December 11:02
kambites said:
Facefirst said:
You don't have a product that is commercially viable, so you need a grant (not a loan, a grant) to build it in the UK, and you want this money from tax revenue.
Not quite. They don't have a product which is commercially viable to produce with the UK's huge wages so they're offering the government a choice of whether to fund job creation in the UK or let it go abroad. Of course the government has every right to tell them to go build cars abroad, and probably will, but I don't see any harm in Lotus making the offer. Presumably from a PR point of view it also gives them some leeway as to "we wanted to stay but the Govt. wouldn't play ball".
No chance. The industry I work in was lobbying hard for tax breaks....to match those offered by Canada, just so we can be competitive. We are a very low pollution, hi tech industry and bring in hard foreign currency. We were told to take a hike. Approx 10% of the jobs in our sector have gone from the UK and many people I know have relocated to Canada. If we couldn't get even tax breaks why should a sports car maker get a grant? Mind you the last Government happily gave Landrover a bundle of cash even after they had been trying to tax their products off the road for the revious 5 years....It's all a joke.
kambites said:
Facefirst said:
You don't have a product that is commercially viable, so you need a grant (not a loan, a grant) to build it in the UK, and you want this money from tax revenue.
Not quite. They don't have a product which is commercially viable to produce with the UK's huge wages so they're offering the government a choice of whether to fund job creation in the UK or let it go abroad. Of course the government has every right to tell them to go build cars abroad, and probably will, but I don't see any harm in Lotus making the offer. c.70% of the UK's employment is in the SME sector and you can't get funding (grants or loans) for love nor money, even though the overhead burden is far less than in a multinational. The smaller companies fall by the wayside whilst those with enough clout get grants for a vaguely irrelevant product. If Lotus wanted a grant to develop some kind of green energy solution (or manufacturing process ala iStream) then fine, it might make sense as the long-term payback would be a market leader in this field. V8 sports car? Not so sure that this benefits the majority in the long run, even if I do love them myself.
And another thing...
As a matter of principle, is it right that tax money is gifted to unelected, unaccountable private interest firms (international in this case) when we don't seem to have enough to, say, build our schools?
!!You've got to laugh, everyone bemoans the demise of the British car industry, and then when a British manufacturer pops up looking to make producing cars in Britain economically viable, creating a thousand jobs in the process, using 'my money', then all of a sudden, because they wont be able to afford one of said cars, b
ks to them.
ks to them.Garlick said:
Anyone else reminded of the Smolenski era at TVR?
Yes. Massively.Here's a crazy idea, instead of throwing everything away and starting again, lets hav a look at how we could maybe, just maybe, expand the Elise range out, get the numbers up and streamline production.
With a budget of around 500quid they could create an entry level Elise. Make it a bit like a VX220, cheaper panels etc over the same chassis, entry level Toyota engine, no options, limited colours £16k. Sell it on the basis of being a proper cheap to run sports car and go from there. This will
a: Sell a lot of cars
b: Get people into the show rooms, get them noticing the really nice touches on the "proper" Elise and get it in people's heads that this a proper daily driver.
OK, there are no doubt some flaws here but it's a damn site better than the current plan
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