Lotus announce 325 potential redundancies in restructure

[TLF News 208]

 

Group Lotus plc today announced a proposal to restructure its worldwide workforce as a result of the need both to reshape its organisation and to reduce costs. The proposal was made following very careful consideration and may involve the loss of up to 325 jobs.

The company wants to ensure that it has the right organisational structure in place to achieve its business goals and to build a strong, sustainable future. Regrettably, it is likely that compulsory job losses will be needed to ensure that the company has the right number of people with the right skills.

Group Lotus intends to redeploy staff wherever possible and will look for ways to retain specific skills and knowledge within the business, despite the proposed cuts. It also proposes to recruit into key roles, to help achieve the best possible structure and skill base.

 

Jean-Marc Gales, Chief Executive Officer of Group Lotus, said “We understand the concerns that this proposal will create. 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. It is in no way a reflection on our employees who have shown nothing but dedication to us and have worked tirelessly to support Lotus.”

 

Group Lotus will now consult with staff and workers’ representatives on the proposed changes and on ways and means of avoiding job losses, reducing the number of job losses and mitigating the impact of any changes that are necessary.

 

Jean-Marc Gales added, “Once the reshaping has been undertaken, and with its strong and experienced management team, Lotus should be a leaner, more competitive organisation, focusing on both producing class-leading sports cars and innovative engineering. We will also build upon the improved sales results seen over the last few months.”

 

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[hedgerley 440]

Does this mean the £10m RGF grant will have to be paid back - it was meant for new jobs after all?

[Bibs 11,106]

I don't think that cheque was ever actually written.

[rudolphwolven 96]

Although I believe in the correctness of the decision of J-M. G. it is very sad indeed.

My thoughts go out to all those who have done their best for Lotus and unfortunately are fired.

I hope they will find a new challenging / satisfactory job soon.

Edited September 18, 2014 by Ruud

[TBD 781]

Considering that at the same time they have clearly communicated to  growth plans to the dealers the real question is how much fat and inefficiency Lotus have been carrying with them. From that perspective it may actually be good news. 

 

They certainly didn't hire JMG to close down the shop (and he wouldn't have accepted such an appointment). 

[Corsu 43]

Bibs, you wrote : "they'd announce redundancies to the dealer network (separate companies)". 

 

What  do you mean by "redundancies to the dealer network" ? 

[Bibs 11,106]

That's not what I wrote in context. I did write "there's no way on Earth they'd announce redundancies to the dealer network" in response to someone asking if this is why all the dealers were invited to Hethel last week, which should give you the correct context. 

[Corsu 43]

ok 

[Advantage 910]

BOOM! Straight in there JMG! 

[Frickin_idiot 134]

Not good news at all, how can lotus develop new models with swinging cuts?

I really cannot fathom what the dealer meeting was about unless it was to pre empt the announcement and quell any fears in the network.

I cannot see the car division launching new cars any time soon with such substantial cuts but If it keeps the company afloat it's the right move.

[Bazza 907 1,056]

Any idea what proportion of the total workforce 325 is?

[Bibs 11,106]

Approx a third.

[Frickin_idiot 134]

So is there likely to be any good news to balance this out or must we wait till March?

[Luc2000 14]

Strange to announce they are going to fire people when they are not sure yet how many. I expected an announcement like this a a while back, but I thought at the moment things were looking better. Didn't see it coming at all.

Just hope they really thought about this for a while and made a well-considered choice.

[NedaSay 835]

I'm a bit lost. 325 people that's a little less than a third of the Group total workforce in the UK, They don't say which entity will gulp the bulk of it, Lotus  engineering, Lotus cars, Lotus racing... I'm led to think that the bulk will come form "Cars" and possibly some would come from engineering and racing but that's a huge chunk of the workforce for a company getting ready to present a new variant of an existing this year, another new variant of a car next year and possibly a whole new car the following year.

 

Do they intend on shifting the production or subcontract massive chunks of the production elsewhere? 

Edited September 18, 2014 by NedaSay

[Bee 85]

I'm trying to see a positive in this but frankly, after all the work and effort that has gone into rebuilding the brand's reputation, I would imagine that the impression taken by the sports car fraternity at large will be that Lotus is in such dire straits that it has had to lay off a third of its highly talented and dedicated workforce.

 

If I'd been on the edge of seriously considering the purchase of a new Lotus having previously been dissuaded by all the news reports of their varied managerial and financial woes, I think news like this would have me walking in the opposite direction again, without even a backward glance.

[LotusLeftLotusRight 1,226]

Cowardly announcement when the eyes of the media are on Edinburgh. Coincidence? They've lost any goodwill from me.

[Bibs 11,106]

As much as it pains me to say, since a lot of staff there are friends, if an organisation is 'top heavy' then a scalping isn't a bad thing. Recently, as I understand, a contractor who was senior in the marketing team wasn't renewed and he was on a six figure salary. For that money, what marketing has come out of Lotus in the past couple of years? That's one example, I'm sure there are many more examples and with a £3m/month wage bill, it's the easiest way to cut costs. 

 

While senior figures from DRB and Proton were at the Dealer Event last week re-assuring everyone that they were behind Lotus financially, down-sizing is efficiency personified and indeed does make the company more attractive to potential suitors.

 

Companies make people redundant. Microsoft, the planets wealthiest company made 18,000 people redundant earlier this year and announced more redundancies this week.

[TBD 781]

Typically you can cut 15-20% out of any top-heavy organisation without any negative impact on business. In most cases, in fact you get a positive impact. And, as Bibs pointed out, everyone does it, even VW has installed such a cost cutting plan and no one would currently state they have a sales or growth issue.

 

25-30% is, however a pretty heavy stretch goal. Taking that size reduction whilst trying to grow can only mean they will be outsourcing certain business activities or completely cutting some non-core entities. Most likely it means the end of Lotus Engineering 3rd party work. 

 

Obviously JMG must have identified some major repositioning potential that DRB had not seen in the last year.

 

We will see, it may be a strategic gamble on JMG side, either he succeeds and Lotus comes out big, or he fails and Lotus is gone.Unlikely there would be another chance. 

[Bibs 11,106]

I think it's referred to nowadays as 'right-sizing' rather than 'down-sizing'! 

[Advantage 910]

So is "left sizing" employing lots of people in non-jobs?

[red vtec 177]

It depends if your on the right side of the cleaver when it falls.

[Advantage 910]

I'd be holding the handle. 

[Advantage 910]

So, um is Group Lotus going to be put up for sale in the near-ish future? A new streamlined and refinanced operation could make an attractive sales pitch.

[Bibs 11,106]

Near-ish future?