RE: Government Decision On Lotus Money Due Soon
Discussion
It's possible to make cars profitably in the UK -- so long as you're either large scale (LRJ, Honda, Nissan) or niche (AM, Morgan, Aerial etc..).
Lotus is now in "death valley" -- Mid Size, which requires economies of scale so huge investement in line automation etc, but manufactures insufficient volumes to make a sensible return. The alternative is use cheap labour (move to Asia) or use a 3PP.
That said, and quite impassionately, I'd give the subsidy, with conditions such as new investment matched 2:1 to each taxpayer £.
The cost to society of further unemployment, lost tax revenues, suppliers and contractors losing out etc is probably higher in the long run.
And how else can I persuade wife that a new Esprit is an essential purchase to support British jobs!
Lotus is now in "death valley" -- Mid Size, which requires economies of scale so huge investement in line automation etc, but manufactures insufficient volumes to make a sensible return. The alternative is use cheap labour (move to Asia) or use a 3PP.
That said, and quite impassionately, I'd give the subsidy, with conditions such as new investment matched 2:1 to each taxpayer £.
The cost to society of further unemployment, lost tax revenues, suppliers and contractors losing out etc is probably higher in the long run.
And how else can I persuade wife that a new Esprit is an essential purchase to support British jobs!
The Crack Fox said:
As much as I love Lotus, I am sick of the Government being bribed by Proton to keep production here, if they want to up sticks and move, fine, but PLEASE don't chuck any taxpayers money at the business. If it can't/won't fund itself then tough. Businesses should sink or swim on their own, we don't have enough money in the (tax) pot for this nonsense.
/tough love.
I completely agree. Harsh as it may be, this is commercial reality./tough love.
'If' Lotus new plans had included building a reasonably priced sports car for enthusiasts that was based equally on economy and performance (ie something that 'would' sell!) in the mould of the founder, rather than aiming at five overly-ambitious models that start at around £50k onwards to Ferrari price comparisons (which could in reality sink the company!), I might have said 'give 'em (our) the money'.
As it is, no way. You fund your own money.
As it is, no way. You fund your own money.
dandarez said:
'If' Lotus new plans had included building a reasonably priced sports car for enthusiasts that was based equally on economy and performance (ie something that 'would' sell!) in the mould of the founder, rather than aiming at five overly-ambitious models that start at around £50k onwards to Ferrari price comparisons (which could in reality sink the company!), I might have said 'give 'em (our) the money'.
As it is, no way. You fund your own money.
Facts are wonderful things to support an opinion. Probably best to make them correct even in the least though. As it is, no way. You fund your own money.
jazzyjeff said:
I don't see why not. The cost of manufacturing cars in Germany is higher and they seem to manage well enough...
JJ
The cost of labour may be higher, but I'm not sure about the overall costs of manufacturing. The cost of property to base your factory in, for instance, is much lower. The costs of many forms of distribution are lower on mainland Europe. The cost of training your workers is lower, since so many are already well-trained by the state. There is little/no exchange rate risk. And so on.JJ
If I remember correctly, the money that Lotus have asked for comes from a fund that is open to all manufacturing and businesses in the East of England and it's not a cash hand out, but a loan. There is, I think £1.5Bn in this pot.
As a foot note, The Hingham based F1 team employ about 250 staff, Hethel around 1700.
It's about time this Government helped out it's home grown engineering companies. We used to be world leaders innovative design & development in engineering, now as a Country, we are a shadow of our former selves with little or no investment
As a foot note, The Hingham based F1 team employ about 250 staff, Hethel around 1700.
It's about time this Government helped out it's home grown engineering companies. We used to be world leaders innovative design & development in engineering, now as a Country, we are a shadow of our former selves with little or no investment
tallmat said:
It's possible to make cars profitably in the UK -- so long as you're either large scale (LRJ, Honda, Nissan) or niche (AM, Morgan, Aerial etc..).
Lotus is now in "death valley" -- Mid Size, which requires economies of scale so huge investement in line automation etc, but manufactures insufficient volumes to make a sensible return. The alternative is use cheap labour (move to Asia) or use a 3PP.
That said, and quite impassionately, I'd give the subsidy, with conditions such as new investment matched 2:1 to each taxpayer £.
The cost to society of further unemployment, lost tax revenues, suppliers and contractors losing out etc is probably higher in the long run.
And how else can I persuade wife that a new Esprit is an essential purchase to support British jobs!
I wouldn't describe Ferrari, Bentley, Maserati or Aston Martin as large scale. All of them manage to turn a profit on a relatively low volume product.Lotus is now in "death valley" -- Mid Size, which requires economies of scale so huge investement in line automation etc, but manufactures insufficient volumes to make a sensible return. The alternative is use cheap labour (move to Asia) or use a 3PP.
That said, and quite impassionately, I'd give the subsidy, with conditions such as new investment matched 2:1 to each taxpayer £.
The cost to society of further unemployment, lost tax revenues, suppliers and contractors losing out etc is probably higher in the long run.
And how else can I persuade wife that a new Esprit is an essential purchase to support British jobs!
The trick is that what they do is compensate their medium volumes with high prices. Ferrari turned over around about £1.5 billion last year on sales of ~8000. Before the recession Bentley was selling 10,000 cars per annum and turning over well over £1 billion.
On those sorts of budgets you can afford to spend the millions it costs to develop a new car platform, at those prices you can also afford the low volume production techniques (like the ones Lotus actually pioneered).
The problem Lotus have is that they are small, relatively low priced and competing against large manufactures niche products. Lotus's current turnover is in the 10's of millions there is no way in hell they can afford the development of new cars or support factory overheads.
To compete at low volumes they need to move upmarket, hopefully this government loan will allow them to do this because there is no way in hell they could go through their expansion program using funds generated by their turnover.
There is no future for selling small volumes of medium price cars.
The Crack Fox said:
As much as I love Lotus, I am sick of the Government being bribed by Proton to keep production here, if they want to up sticks and move, fine, but PLEASE don't chuck any taxpayers money at the business. If it can't/won't fund itself then tough. Businesses should sink or swim on their own, we don't have enough money in the (tax) pot for this nonsense.
/tough love.
But the tax / income gained from the business being here will outweigh the grant. That's the point of it. Secondly, the grant isn't because Lotus are going out of business. It's to make staying here a better business decision than going elsewhere. /tough love.
Thread drift, but Dear Pistonheads, please can we have a hi-res version of the Esprit image that accompanies this article? For the avoidance of doubt, it's this image:
http://images.pistonheads.com/nimg/23376/Esprit_2-...
I'm really liking the look of the new Esprit.
http://images.pistonheads.com/nimg/23376/Esprit_2-...
I'm really liking the look of the new Esprit.
I live and work very near lotus and the Hethel engineering centre the place really is a centre of excellence and it would be a shame to loose work and inevitable talent out of the region.
Being an engineer myself and living so close to Lotus it’s of course the dream to work there so more jobs are good.
And! There are always loads of Lotus (lotie?) on the A11 to goggle at, it would be a shame to miss out on the latest ones!
Being an engineer myself and living so close to Lotus it’s of course the dream to work there so more jobs are good.
And! There are always loads of Lotus (lotie?) on the A11 to goggle at, it would be a shame to miss out on the latest ones!
I can't see any strong reason to keep production in UK at all. It's sad when far eastern made products end up way higher quality than what can be made at home for much less money you can't blame the Gov for everything.
The simple fact is rest of the world knows how well Rover went and most foreigners I talk too put Lotus in the same basket, having production somewhere else in Europe or Far East can only raise Lotus public perceptions.
The simple fact is rest of the world knows how well Rover went and most foreigners I talk too put Lotus in the same basket, having production somewhere else in Europe or Far East can only raise Lotus public perceptions.
Donkey62 said:
I can't see any strong reason to keep production in UK at all. It's sad when far eastern made products end up way higher quality than what can be made at home for much less money you can't blame the Gov for everything.
The simple fact is rest of the world knows how well Rover went and most foreigners I talk too put Lotus in the same basket, having production somewhere else in Europe or Far East can only raise Lotus public perceptions.
Many of the far eastern products that have created the reputation of high quality are constructed here in the UK, and not just cars for UK consumption either, eta Nissan, Toyota and Honda all produce cars in the UK.The simple fact is rest of the world knows how well Rover went and most foreigners I talk too put Lotus in the same basket, having production somewhere else in Europe or Far East can only raise Lotus public perceptions.
Where a car is built makes no difference to the quality of the vehicle, production line standards and management do.
Edited by The Wookie on Friday 25th March 10:17
Giving Lotus support to do the things that Lotus does well, ie low volume sportscar production, chassis engineering consultancy, etc = good thing.
Giving Lotus money to piss away on a new model line-up which, with the best intentions in the world, hasn't got a hope in hell against the established players in the market = bad thing.
Giving Lotus money to piss away on a new model line-up which, with the best intentions in the world, hasn't got a hope in hell against the established players in the market = bad thing.
Donkey62 said:
The simple fact is rest of the world knows how well Rover went and most foreigners I talk too put Lotus in the same basket, having production somewhere else in Europe or Far East can only raise Lotus public perceptions.
WTF? Aston Martin, Range Rover, Rolls Royce, Bentley are made here and how often to do you see people bleating about their build these days? Let alone Honda, Toyota, Nissan. Rover is nothing like Lotus, only an idiot would compare them. I am sure people would love to know that their £120,000 Esprit was made in Tiawan, NOT.To all those who support this - would you be just as happy if a Proton salesman knocked on your door and asked for some money for their business - as this is essentially what they're doing.
There's nothing holding Proton here after they get the grant, and since it obviously doesn't stack up for them to produce here without subsidy, guess where they'll go in a year or 2 when the cash runs out?
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