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Lotus in the Sunday Times


jonwat

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Article on how Jean-Marc Gales is rebuilding Lotus from scratch.

http://www.thesundaytimes.co.uk/sto/business/Industry/article1516483.ece

Cheers,

John W

http://jonwatkins.co.uk

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I clicked on the link and was able to read the first dozen lines (and it was very interesting), but you have to be a subscriber to read the whole thing... would be interested to read the whole article, but not willing to subscribe...

Kyle Kaulback

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Sorry about that, it's not easy on a tablet :o

THE dismembered remains of three sports cars are spread across tables in Lotus’s makeshift operating theatre. Each part bears a price tag and a sticker: green means it stays, yellow signals renegotiation with suppliers, red means re-engineering required, and blue means it goes.

Not even the sun visors have escaped Jean-Marc Gales’s brutal review. From a pile in a corner, the car maker’s smartly dressed chief executive picks up a strip of black plastic that once was a Lotus Elise visor. “There’s no legal requirement for it,” he says. “Anyway, it’s tiny.” It is tossed back on to the pile.

Already discarded is an electronic glove-box release mechanism. “No other sports car has it. It’s saved us £60 and 1kg.”

Nine months into the job, Gales is busy dismantling and reassembling Lotus Cars, the famous British brand that won six Formula One drivers’ championships during its heyday in the 1960s and 1970s, and has come close to collapse at least as many times in its 63-year history.

In the “lightweighting laboratory” — an office of worn carpet tiles and strip lighting — the 2,000 parts that make up each of the company’s three models have been priced, weighed and deemed worthy or unworthy of the historic marque.

All 900 staff have walked along the rows of tables, weighed each part in their hands, and had their say on how the Elise, Exige and Evora can be made lighter and cheaper. Suppliers have been asked to redesign parts and cut the prices. This weight-loss regime has slimmed the cars by 20kg and sliced about 10%, or £3,000, from the components bill.

“This exercise had never been done before,” says Gales. “It helped me to understand our cars and understand the superfluous things. We never touched the design. We have increased the quality but we went for a lower cost and weight.”

Lotus was in intensive care when the latest chief executive arrived at the ramshackle collection of wartime hangars and modern offices, formerly RAF Hethel, deep in the Norfolk countryside. Its core cars division has not made a profit since Proton, its Malaysian owner, took over 18 years ago.

Cumulative losses since the turn of the century had reached almost £600m, including £168m in 2012-13. Its models needed a refresh, morale was low and the Malaysians were losing patience. Gales, a Luxembourger whose career spans senior jobs at Peugeot, Citroën, Volkswagen and Daimler, saw that the only way to rebuild the company was to take it apart and start again.

He started by slashing 300 jobs — a quarter of the workforce. “We had 1,215 people and were building 1,200 cars a year. That’s just not sustainable.” He also renegotiated contracts with suppliers, logistics companies, even the cleaners.

Gales is not Lotus’s first saviour. His predecessor was the former Ferrari executive Dany Bahar, who wanted it to be a rival to Ferrari, Aston Martin and Porsche. His audacity at the 2010 Paris Motor Show, where he unveiled five new models, made the industry wonder if the sleeping beast was awakening.

Those models never went into production. Bahar was suspended amid allegations of expenses impropriety in May 2012, months after Proton was bought from the Malaysian government by DRB-Hicom, one of the country’s top conglomerates. He sued for £6.7m, and Lotus settled for an undisclosed sum.

Bahar, who now runs Ares Performance, a tuning house for supercars, insists: “I acted within my authority at all times.”

The remains of his legacy are still visible. The girders of a half-completed factory, which Bahar hoped to fill with the new models, stand rusting in the Norfolk sleet.

He still believes Lotus needs to “go big”. Dubai-based Bahar said: “It’s a beautiful brand that has gone through so many tragedies and successes. There are not many brands with such character — Ferrari is similar. I really hope they succeed.

“My mandate was to come up with a grand plan. Whether that would have worked I do not know. But I would never have gone to Lotus if somebody had told me you have to get rid of hundreds of people, reduce costs and evolve or develop new products from the current platform.”

Seated in a boardroom lined with a montage of Lotus’s Formula One winning cars, Gales says the Paris cars were “just concepts”. “There was never a running prototype; they were just shells. Wow factor is one thing but the results need to follow. Every company needs to have the funds to finance the expansion.”

His strategy of new from old is laden with pragmatism. Gales refuses to say how much money he has been given to play with, but DRB-Hicom was clearly not prepared to go on pumping money into Lotus without hope of a return.

There will be no truly new models for some time. Lotus will attend the Geneva motor show for the first time in three years, but is expected to unveil a revamped Evora. “It’s realism. There is lots of life left in the products,” says Gales. Echoing its bigger rivals, Lotus will share parts with Proton. “I bet you will find parts from a Volkswagen Polo in a Lamborghini Murciélago,” he says.

Immediate growth will come from the model upgrades and extending its dealer network to 200 from 138 six months ago. Sales are on course to almost double to 2,000 this financial year, and Gales reckons they could hit 3,500 within three years — returning the company to profit in the process. “We are on track. The cars are on time, the projects are on time. The brand has a huge amount of goodwill.”

Gales, 52, who stalks the corridors with a wiry energy, insists there is romance in his new era of austerity. He first fell for Lotus as a child when his father took him to the Paris motor show and to a Lotus dealer in Luxembourg, where he was captivated by the Elite.

He visited Hethel while studying at Imperial College London, and says it was an easy decision to leave the European motor suppliers’ trade body in Brussels, where he was chief executive, and move to Norfolk. His wife and daughter will join him here.

A photograph of Colin Chapman, Lotus’s founder, perched with driver Jim Clark on his championship-winning car in 1963, hangs in the Lotus boardroom. It is accompanied by the words, “If you’re not winning, you’re not trying”.

There is a Formula One team that carries the Lotus badge but it is tied to Hethel by the thinnest of threads. “It’s a bit of a mixed feeling,” says Gales. “When it wins, good times. But when it loses it’s not that good. I would not overemphasise the importance of F1. It’s heritage that nobody can touch, but there are fewer synergies than people think.” He wants Lotus to focus on endurance and club races, where you “buy an Elise, drive it to work Monday to Friday and race it on Saturday”.

Experts are sceptical about whether Gales will have the resources to revive Lotus. “You have [sergio] Marchionne relaunching Alfa Romeo with substantial investment,” says George Galliers, an analyst at the investment bank Evercore ISI. “The Porsche Cayman and Boxster are also very strong, and it’s very difficult for anyone other than the enthusiast to give Lotus serious consideration.

“At some point the competition produces something much superior or similarly priced or legislation hits. Eventually the product becomes obsolete. Without a partner, this industry is not easy. Aston Martin is a good example of how quickly things can deteriorate.”

Inside the factory there are more clues to how Gales plans to revive Lotus within his cash straitjacket. By the summer Lotus will run two production lines, instead of one, raising output from 40 cars a week to 70. Another 150 production staff will be hired. The cars’ handmade ethos will not change — 160 hours to build an Elise and 220 hours for an Evora.

Inside a hangar that used to house B-24 Liberator bombers, a worker sands the door of a canary yellow Elise. In a factory tacked alongside, the aluminium “tubs” that form the lightweight core of a car are hoisted to eye level to begin assembly.

Karl Hoskins, head of manufacturing engineering, says there is a new optimism at Hethel. He has worked at the plant for 21 years, interrupted by a spell of redundancy in the 1990s. “That’s Lotus life,” he says. “We’ve had our highs and lows. Jean-Marc has brought confidence to the business. He’s taken us back to our core competency.”

Gales hints at what may lie beyond 2017: perhaps a sports utility vehicle, but not “big, heavy and cumbersome” like those of rivals. “A Lotus SUV will be extremely light. It will be pure according to our concept but it will still give you the SUV attributes — higher driving position, all-weather capability.

“That’s an idea that we are actively thinking about but we have not reached a conclusion. I need to convince myself.”

Cheers,

John W

http://jonwatkins.co.uk

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The bit about reducing costs and weight by letting the employees look at all the parts is nice to read. However, it is a bit strange they  talk about the whole Bahar era again. That chapter is over, and has been for quite a while now. No need to talk about the failed plans of the last few years, just focus on what's happening right now :)

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That's pretry much all been published before.

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Maybe. But just because we have heard it before does not mean everybody has. Looks like the PR department are trying to keep the Lotus name in the news in the run up to Geneva. Every car manufacturer will be shouting during that show an Lotus would likely get drowned out. Get in the minds early and you may get some follow up interest.

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@@@Bibs:

well I think that you can guess from the article that the electric glove-box-opener for the Evora will be deleted - never read this before....;-)

 

You are right, no "new" Information but maybe this article will help the Promotion of Lotus in General.

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I think MJK's comment was pertinent here, but can't repeat it as his language may shock even you guys!

Possibly save your life. Check out this website.
http://everyman-campaign.org/

 

Distributor for 'Every Male' grooming products. (Discounts for any TLF members hairier than I am!)

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^^ Please do. A strikethrough where appropriate may be enough for heart sensitive people.

 

Regarding the article, I did like it. And the Sunday Times is a good place to get to a broader audience, I would have thought.

 

The tone of Bahar's comment about his game-changer plans makes me realise how unrealistic and pretentious that man is. I prefer the "ant" approach that JMG seems to be applying.

 

It is true, though, that weight saving and pressing the suppliers will not be enough to save Lotus. It is ok to shake the pieces-box for now but the fist "JMG-era" cars need to be really good if they want to stand a chance.

 

I also liked the fact that JMG's first Lotus "dream-car" was the Elite. It may sound as heresy and I know it is highly unrealistic but I still dream of a new Lotus four-seater in the lines of the Excel (rather than a SUV).

 

Improve the Evora, get a very good new Elise / 211 and launch a beautiful, reliable and good handling 4-seater. There goes my vote (if he is reading).

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I like the focus Gales is bringing, his general plans for moving forward, and his staff involvement (although I'm finding it hard to believe this is the first time staff have been asked for input) and his plans to bring many of them back, but the article also contains three absurdities.

 

First, the financial characterizations are misleading, and if one is willing to invest the time to dig up the actual financials, simply wrong. Second, prefacing Bahar's involvement with "Gales is not Lotus’s first savior" implies that Bahar was a previous savior. Seriously?! The man left the company worse off than when he got there, period. Or as Luc2000 summed it up...

 

The bit about reducing costs and weight by letting the employees look at all the parts is nice to read. However, it is a bit strange they  talk about the whole Bahar era again. That chapter is over, and has been for quite a while now. No need to talk about the failed plans of the last few years, just focus on what's happening right now :)

 

Spot on. So third, why the hell is this journalist wasting ink with quotes from Bahar when he could have spoken with MJK? Shoddy journalism.

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