March 30, 2017

Back in the US of A…

A Conversation with Wes Fredericks, the Man Who Brought Lotus back to the USA in 1983, with 50 “Special Edition” Turbo Esprits

By MATT GUTHRIE DeLANGE (aka Moxie)

1983 Investor’s Special Edition Turbo Esprit #47 of 50. Photo courtesy Ferrari of Denver. Click image for Photo gallery.

In 1983, the situation for Lotus in the USA was at a low ebb. Present recession aside, Americans generally aren’t used to being unable to buy something, particularly if the item of their desire is still in production, but if you wanted an Esprit during most of 1981-1983, it was going to be a scale model, despite the advent of Lotus’s first true supercar, the Turbo Esprit, in 1980.

The landscape was so bleak for the marque that John Lamm wrote the following near-epitaph in the February 1983 issue of Road & Track:

“It’s my suspicion that Lotus has just about used up all its credit with automotive enthusiasts in the U.S. It hasn’t been an easy account to deplete…When Lotus updated its car line and image with the new Elite in 1974 and the Eclat and mid-engine Esprit a year later, it seemed the company was ready to continue offering the sort of automobiles we like: light, efficient, quick, with precise handling and, at least in the Esprit, good looks. And yet Lotus managed to fumble away what promised to be one of its best markets in the world, not because it lacked the right products, but because it couldn’t build and distribute them for the U.S. with anything like the brilliance that got the cars into production in the first place. Lotus in America has been like a 1,000-piece jigsaw puzzle of cloudless sky with all the edge pieces missing…Lotus’ ability to evade success isn’t unique in the automotive industry, but we find it particularly frustrating. Colin Chapman’s cars follow just the sort of philosophical lines we prefer. And the Esprit remains as perhaps the most enduring of Giugiaro’s hard-corner wedge designs. All that potential…”

The solution came not from Hethel, but from a New York-based attorney and car enthusiast, Wesley C. Fredericks, Jr., who conceived a plan to put Lotus on a self-sufficient and sustainable path in the US, with a newly-consolidated network of North American dealers and an unconventionally financed import and distribution company, Lotus Performance Cars (LPC).

Wes Fredericks at Hethel in the Turbo Esprit from For Your Eyes Only.

To jump-start the operation, rather than going back to another, larger auto maker like Rolls Royce, with whom Lotus had previously had a disastrous relationship in North America that resulted in the aforementioned 2-year absence, Wes’s plan went straight to the people, so to speak, by bringing in 47 well-heeled Lotus enthusiasts as investors and limited partners in LPC. Ultimately, LPC would have a significant effect on North American sales (at one point rivaling Ferrari’s regional sales of the 328), as well as increasing Lotus’s financial stability, and even influencing the marque’s logo.

Each of the 47 investors received a “Special Edition” Turbo Esprit (also known variously as the “Investor’s Special Edition” and “Silver Anniversary Edition,” the latter referring to Lotus’s 25 years of sales in the US), with the following base configuration:

  • removable tinted glass roof panel, with cover for stowage behind the engine (a feature not available on standard production Turbos until 1985);
  • individually blueprinted and optimized engine;
  • individually tested and matched suspension ride control units;
  • air conditioning;
  • comprehensive security system;
  • hallmarked English silver plaque on the steering wheel, personally engraved for the driver;
  • individually hand sign-written “Special Edition” insignia and build number on driver’s door;
  • exclusive two-tone Silver/Chrysler Steel Gray color scheme, with red pinstripe, and silver/gray Connolly Leather interior with red stitching; and
  • upgraded Blaupunkt stereo and speakers.

Typical hand-signed driver’s door insignia.

Investors also had the option of choosing their car’s exterior and interior color scheme, as well as certain installed options. Many of the investors took advantage of this, and a total of 33 cars were produced in non-standard color configurations—more if you count variations in the factory-installed options—some in unusual combinations (yellow with gold leather interior?!).

While a fair amount of ink has been dedicated to the three other Giugiaro-era special edition Esprits, these 50 cars have only been fleetingly written about in a few magazine and online articles and aren’t mentioned in any of the major books on the Esprit. This has always struck me as particularly odd because while each of the JPS S2s (147 units), Essex Turbo Esprits (34 units), and commemorative ’87 Turbo Esprit HCs (40 planned units, total unknown, celebrating 21 years in Norfolk), were essentially identical, one would assume that the numerous permutations on the 1983 “Special Edition” Turbos would be of inherent interest to Esprit enthusiasts.

The cars were numbered 00-49, but were not delivered in strict numerical order. As noted below, cars 47, 48, and 49 were sold at retail to validate the price before distributing the other 47 to investors.

Being the previous owner of #43, now owned by my friend Art Mason (TLF name “Shark Sandwich”), I attempted to find out more about these cars and was seriously frustrated in the process. Digging through The Lotus Forums (TLF), I found a few relevant threads, but none gave a complete picture. The most extensive discussion was found at TLF member Mark B’s site, LotusEspritTurbo.com, and Mark had also posted a one-page article on TLF referencing the cars from the February 1984 issue of the US business magazine, Executive MART, which gave a brief overview of LPC and interviews with the company’s two prime movers, Wes Fredericks (Chairman) and John Spiech (President & CEO).

The author’s former one-of-a-kind, all-Chrysler Steel Gray/silver interior, 1983 Investor’s Special Edition Turbo Esprit #43, now in the good hands of fellow TLF member, Art Mason (Shark Sandwich).

Searching for Wes online, I found that not only is he based in New York City as I am, but he had just months before taken a partnership position with the national law firm Jenner & Block in the same Midtown Manhattan building I’d worked at as a grunt in high school. Wes is currently a partner in Jenner & Block’s New York office and Chair of their New York Corporate Practice, specializing in the areas of domestic and international mergers and acquisitions, finance, and related transactions. He kindly made time to speak about LPC, the 50 “Special Edition” Turbos, and much more.

While you won’t find Wes quoted in any books on Lotus, he is clearly still quite proud of his work with Lotus, as evidenced by the regalia decorating his Midtown Manhattan 38th floor corner office. I also couldn’t help notice the black 1:18 scale Turbo Esprit model sitting on his window sill, dead-center in front of his desk.

Matt Guthrie DeLange and Wes Fredericks at the Lime Rock Historic Festival 29. Bob Fogle, background left, with his tartan S1, #116H.

When did your involvement with Lotus begin?

1976, but it had nothing to do with the cars. I was at the law firm Shearman & Sterling, doing some of Lotus’s legal work, and I started getting involved with the account in 1976. We worked on some of Lotus’s dealer and distribution issues and defended them in some cases. They had a couple of cases involving car fires that we worked on, and the odd accident—things like that—but Lotus had a lot less of its share of issues than most other car companies. There were only two or three of the fire cases, and they were all traced to people over-enthusiastically using ether.

Recreationally or carb spray?

Yeah, those starting fluids you spray into carburetors are mostly ether.

Wes Fredericks and Mike Kimberley in Mike’s office at Hethel, circa 1982.

As John Lamm described, it was clearly going to be a major undertaking to re-establish the marque in the U.S.…

It was! [laughing]

So to back up a step, why did the previous import and distribution arrangement with Rolls Royce implode?

Lotus went through the same pattern—and I was involved in that transaction with Rolls Royce, both setting it up and then taking it apart—but Lotus went through the same pattern in the States that most European car makers did in the 50s and 60s. Lotus started distributing here in approximately 1958, and they did it as many others did, through a series of regional importers. They had one in the Northeast, Southeast, Midwest, Far West, and so did everybody else, like Volkswagen and Porsche.

Ultimately, Lotus consolidated them under one North American importer with the same folks serving as regional distributors, and that importer was Lotus East, up in Millerton, New York. That happened before I got involved. Previously there were all sorts of problems because no one was responsible for warranties, advertising, etc. For example, a dealer in one region might not fix a car that came from another region. The idea of a national importer was that they would handle advertising and warranty work, and would reimburse any Lotus dealer in North America for work they did. And that was also the history with other auto makers and importers.

Lotus Cars put a significant amount of money in a fund to kick that off—for warranty work and nationwide advertising. Somewhere along the way, though, all that cratered, the money disappeared, the persons in charge kind of gave up, moved to Florida, etc. So around ’78, Lotus established their own import company, called Lotus Cars North America, headquartered in Costa Mesa, California. The West Coast Canadian importer—Steve Ramsden—was hired to run that and was doing a pretty nice job. A year or two later, though, they were approached by Rolls Royce—this would have been around ’79/’80—and everyone thought this was the perfect combination—the premier British sedan maker selling the premier British sports car. Lotus had gone upscale pretty dramatically at that point with the Elite, Eclat, and Esprit, from the Europa, Elan, and Seven days, but those new cars were pretty expensive. An Elite sold for roughly the same price—maybe more—than a Ferrari Dino. I remember noticing that at the New York auto show in ’76 or so.

So we put Lotus Cars North America together, and they were doing pretty well. They kind of rejuvenated and got the Esprit, Elite, and Eclat going. Rolls Royce approached them in ’79/’80, we put that together, and in ’80 Rolls ordered a bunch of cars.

I remember sometime during the discussions, or as the transaction was closing—which, if I remember correctly, was right in that building there [pointing out window], 399 Park Avenue, where Shearman & Sterling’s uptown offices were—that Roger Putnam [Lotus Sales Director] observed to Rolls, “Just to give you some advice, the thing we’ve noticed here in the States is that the ratio of front-engine cars that we sell to mid-engine cars is reversed from what it is in the UK.” In the UK it was about 70-80% front-engine cars with 2+2 seating, and a big part of the British car market, in those days anyway, was company cars. Like 80% of the cars sold in the UK were bought by companies for their executives, and the Eclat was a popular car because you could put a couple of kids in the back if you had to, and in the Elite, even a couple of adults. But in the States, people were buying the sports cars.

The fellows from Rolls, though, ordered a whole bunch of front-engine cars and some mid-engine cars. The mid-engine cars sold pretty quickly in ’80/’81. Then they didn’t buy any more cars after that, and it created a major challenge for Lotus.

Rolls also at the time was in the process of introducing their own new line of cars and still had on the ground in the States a large number of the old models. Maybe you remember they ran a series of ads with the slogan, “Your last chance to get a classic”? They were trying to move those older cars.

In the meantime, they were being acquired by Vickers in the UK, so much attention was geared towards that. And they had some other management changes in the US, and because of the distraction, lack of interest, and misunderstandings, it seems the relationship never got off the ground. So in the middle of ’82, we met in that conference room over there where we signed the agreement with Rolls, in order to take it apart. Fred Bushell [Lotus Finance Director], Roger Putnam, and I met with the guys from Rolls Royce and their lawyers, and after quite a bit of haggling, we negotiated a fairly friendly separation.

Ironically, even at that late date Rolls still had 10-20 Elites and Eclats, all 1980 model year cars, but by that time it was 1982. In any event Fred, Roger and I got in a taxi cab on Park Avenue to go back downtown to my old office, and on the way down, Fred Bushell turned to me and said—and I apologize, this is going to sound very egotistical, and I suppose it is—“Well, boy wonder, what do we do now?” I said, “Well, Fred, I would have thought you’d have thought about this by now.” And he said, “Well, we thought maybe we’d approach Jaguar.” This was just as the economy was starting to pick up and the European cars were starting to do well. Jaguar sales were really booming and we figured they had enough on their plate. I suggested resuscitating Lotus Cars North America—distribute as a factory subsidiary. He said, “No, we don’t want to do that. We want to make cars, not sell cars over here.”

In any event I started working with them to establish an independent import and distribution company over here, which was Lotus Performance Cars, and over a few months kind of decided to leave law practice and take it on as a full time occupation.

We were very lucky to be able to hire John Spiech, who was the president of Ferrari North America at the time, as President and CEO, and I became the Chairman. We were also able to bring in Arnie Johnson, with his long Lotus experience, who’d been working for Rolls Royce at the time, and Arnie was a great font of knowledge.

Fiat was closing down in the States and we brought in a bunch of guys John knew, which gave us an enormous jump start. We found a great place out in New Jersey, where all the other foreign car makers were headquartered, except for Saab, which was up in Orange, Connecticut, run by my old friend, Bob Sinclair, who sadly died a few months ago.

So one thing led to another and we got it financed on the back of the 50 “Special Edition” or “Investor’s Special Edition” cars that we gave to every investor. There were 47 of the Special Editions that went to investors, and we sold three at retail. Do you still have your window sticker?

Yes.

So you saw the retail price was $67,000 or something?

$65,000.

Right, so we sold three at that price to validate the cars and gave the rest to these investors. So they were all “gifts” to the investors, basically, but obviously the cars would have factored into the investment decision.

It was nerve wracking waiting for the 1983 model year Turbo Esprits to be federally certified. LPC was financed and closed on December 31, 1982, as was our deal with Lotus, similarly, but it took until about May or June to get the certification. We started bringing in Turbo Esprits around June or July, and we first brought in ones we were going to sell instead of ones we were going to give away. So things went from better to better.

We were really fortunate. We paid back all our debt within 2½ years except for revolving inventory financing, where we financed the cars when they left the factory and paid off when we shipped them to dealers, but other than that we had no debt. No debt for parts, no debt for capital. We had paid all that back by the early part of ’86.

On December 31, 1982, we made an enormous payment to Lotus Cars as a “license fee.” Our investors could deduct a portion of that since we were a limited partnership. So the day we closed we wrote a very big check to Lotus and that kept the wolf at bay until Toyota made their investment sometime later. Then we worked on getting the dealer network stabilized, with about 40-45 dealers. Because of all the dealer protection laws in the States it’s very difficult to suspend or terminate dealers, and so we upgraded over a period of time. Got rid of all but three or four of the old dealers, who were right around here and whom Arnie Johnson knew.

So to clarify—and going back to a question from a friend and fellow Giugiaro Esprit enthusiast—his understanding was that the breakup with Rolls had to do with Lotus disagreeing with which models should be brought over here, Lotus wanting to concentrate on the mid-engine Esprit and Rolls wanting the front-engine models…

Where’d you get that?! Who said that?

Art Mason.

How did Art Mason?…I didn’t know anyone else knew about that because it was never talked about very much.

I think it was also mentioned in an article, which I might have here…

There’s my picture [cover of Executive MART], with John [Spiech]. That photo was taken at the Rockaway Country Club, around the corner from LPC’s offices.

Well, Art’s right. Rolls sold sedans. Again, I’ll never forget it when Roger [Putnam] told the head of Rolls Royce U.S. at the time about the inverse sales ratio of front-engine versus mid-engine cars. The arrangement didn’t work out, but there was more to it than the product mix. And Rolls complained that there were quality issues, and they didn’t like the fact that Lotus was “flirting” with Toyota, although I have no idea what difference that would have meant.

I’d imagine Rolls would have issues with everyone else’s quality control.

Yeah, but those pre ’83 cars did have some issues. I owned an Esprit S2, which I think was the best looking of the series. I really liked the clean lines. But it didn’t age well mechanically. I just sold it because I got so tired of certain things.

Another of Art’s questions relates to the naturally-aspirated S3, namely, since the original plan was to bring them here with the Turbo, why were the S3s dropped at the 11th hour? He suspects it had to do with difficulty bringing them in substantially less than the Turbo.

Well, sort of. The intention was that the Turbo would be the big seller and the S3 would be a sort of promotional piece. Maybe we’d sell 70-80% Turbos and 20-30% S3s. The factory concentrated on certifying the Turbo and then it dawned on us at LPC, “Hey, what’s going on with the S3,” and they said, “Well, it’s awfully expensive to certify, etc.” So it wasn’t a question of the car itself being more expensive. The car would have been priced over here at roughly commensurate with the difference between a Turbo and S3 in Europe. It was the certification. And we never really knew how the certification would have gone with a normally-aspirated engine. It wasn’t the safety certification. It was the emissions and how that would work with a naturally-aspirated engine versus the Turbo.

Regarding the initial financing and the 50 “Special Edition” cars, I’ve read several versions regarding specifics…

After we sold to General Motors in late ’86, Car & Driver came out with an article about the new car [the Turbo Esprit HC] and had a sidebar. I had a fairly long conversation with the writer and he described the financing better than most folks did.

The best version I found was in the April ’83 issue of Car & Driver, which said the investors had to be “accredited investors” under the Securities & Exchange Commission regulations…

Right. SEC Regulation D.

and that the investors therefore needed to demonstrate a net worth of $1M or gross annual income of $200K for two years. It goes on to say that the investors paid $50K up front and a promissory note for another $50K, in exchange for 1.8% of LPC, the tax-deduction you mentioned, and one of the “Special Edition” Turbos. It also mentioned that LPC reserved the right to eventually reduce each investor’s interest, from 1.8% down to 0.4%, but not until each investor had received returns of $200K, or twice their investment.

That sounds right. It was a private placement, not a public offering, so we were limited in the numbers, etc. And it wasn’t shares, it was partnership units.

The idea was that what turned out to be the 47 limited partners would receive approximately 90% of the returns until they got all their money back, then they would receive something like 50% of the returns and then it would ratchet down again. But the whole idea was that as their risk declined and was basically eliminated through returns, their interest would decrease and the corporate general partners’ interest would increase commensurate with that.

And I assume you recall Car & Driver’s comment, “Not since the Brooklyn Bridge Dedication Day has there been a creative financing scheme quite like this”?

Yeah, but that was ridiculous. It was pretty straightforward and was just modeled after what were then standard real estate limited partnership investments, so it was pretty conventional in that regard.

Who were the two general partners?

John Spiech and me, and there was a corporation that he and I and a few other angel investors owned that was the general partner which shared in the profits. John and I didn’t individually share in any of the profits through our positions as general partners.

I know they got one thing wrong in the article, which was the statement that after the 50 cars were given to potential investors, another 25 would be made available to “plain old customers.”

No, that never happened. There might have been some speculation that we go with that, but ultimately it was 50 altogether, with 47 going to limited partners and the other 3 sold commercially. But yeah, there were only 50.

Page 1 of my Owner’s Handbook says, “The ‘Special Edition’ Lotus Turbo Esprit is a limited production of fifty cars manufactured by Lotus Cars, Ltd., to commemorate, in conjunction with Lotus Performance Cars, Inc., 25 years of Lotus in the USA.” Was that anniversary a coincidence or part of the plan from the beginning?

No, that was the design. It was the silver anniversary of Lotus distribution in the US. I was talking with Fred Bushell about this whole concept of coming up with a special edition, since we had no idea what to call them. We thought maybe the first Grand Prix win, etc., but he said, “We have enough going on in our history that you can celebrate some anniversary every year.” So it was variously called the “Anniversary Edition,” “25th Silver Anniversary Edition,” etc., hence the default paint scheme.

My manual cover just says “Special Edition.”

Yeah, I don’t recall anything denominating an official name.

What determined the base specification for these 50 cars?

The paint scheme and interior came from the silver anniversary, and the other stuff was simply what they thought the factory could do to upgrade the cars. So there was the sunroof, which didn’t become standard until several years after that. It also had a significantly upgraded stereo—a Blaupunkt—with special speakers. The leather was upgraded not only in terms of color, but also design. They also had the little sterling silver nameplate on the steering wheel [inscribed with the name of the investor/purchaser, or left blank, depending on investor preference].

Ferrari of Denver’s Investor’s Special Edition Turbo Esprit #47 in stock configuration.

Most significantly, though, the 50 all had blueprinted and dyno run-in engines. The engines were all blueprinted at the factory, and that was a means to legitimately get significantly more horsepower out of the car without changing the spec.

It was an enormous commitment by Mike Kimberley to dedicate the resources to that. There’s obviously variability in production engines, and most production engines, no matter whose they are, don’t deliver the quoted performance figures because they’re not exactly to spec. But these engines were all hand-built, hand-tuned, and then run-in on a dyno. There was a lot of work put in to those engines.

For those of us who vetted those cars—we test-drove every car that came in to the country, and Arnie Johnson spent literally 6-8 hours on every car—you could hear the difference in the engines between the Special Editions and the regular Turbos. Not that there was anything wrong with the regular engine, but the special editions were like sewing machines. Just so smooth. So that was the biggest value added in the special edition.

The blueprint record that came with every car showed the engine serial number, with the power curves, where the boost pressure cut in, etc.

“‘In-depth’ development exercises were carried out by both the Lotus Vehicle & Powertrain Groups to produce a USA-specification Turbo Esprit. Part of the work was to produce the 50 Limited Edition ‘Investor’s Cars.’ I produced the engine power curves for each engine after the engine was run-in. A lot of extra work went into the engine build to ensure the units were built to the minimum tolerance figures. The vehicle suspension components (springs and dampers) also went through a similar exercise.”—Brian Angus

Typical Special Edition Power/Torque Dyno Blueprint

Typical Special Edition Ride Control Unit Performance Blueprint

That’s actually one of things that everyone who’s driven my car has noticed—that the turbo lag is practically non-existent. My friend Robert Prescott-Walker [TLF member “WhiskyBob”] commented that it feels like the turbo is always on.

Right. The turbo lag on the Turbo Esprit was generally pretty low anyway, and I think that’s because—well, for a whole lot of reasons, like it was really well balanced. Lotus and Garrett AiResearch, who made the turbochargers, spent a lot of time working on that together.

There are a lot of things about Lotus that people don’t appreciate. I mean Goodyear developed dedicated tires for the Turbo Esprit and AiResearch went to an enormous amount of trouble to develop those turbochargers with Lotus. The only other turbos you could buy in those days were the Saab and the Porsche, and some lag was generally expected. Lotus had virtually no lag, and the Special Editions had even less. And that’s because of the balancing and the mating of the turbo to the particular engine. I think the turbo was always spinning, but not necessarily developing pressure or boost. That’s probably the biggest reason there’s no lag.

The silver plates [on the steering wheel]—a lot of them didn’t have anything on them because the investors didn’t want anything put on them. There was a woman in California who’d bought one of the 50 cars from the original investor around ’85/’86 and had lost the silver plate. We had about fifteen extras laying around, so I sent her one and she became a lifelong friend. Those were the days when silver was $3 an ounce and not $35 an ounce [laughing].

You don’t have your plaque, right?

No, but the Certificate of Provenance I got from Andy Graham says it was inscribed as “Miro.”

Right. He’s a neurologist in Chicago. Nice guy.

The plaque was just a rectangle, maybe half an inch high and two inches long, and they were hallmarked. Someone in the UK thought people would appreciate having a real English hallmark certifying its “sterlingness.”

Interior of Investor’s Special Edition #47, showing hallmarked silver plaque on steering wheel. Photo courtesy Ferrari of Denver.

Oh, there was also a custom car cover. You have your car cover?

No. The original steering wheel with the sterling silver plaque, car cover, and sunroof cover are long gone.

Right. There was a cover for the sunroof so you could take it off and stow it behind the engine.

Was the marketability of a “special edition” relevant in the context of the investors?

I suppose it varied with each investor. We probably could have sold another 25-30 because they really were exceptional cars, and great looking.

I thought maybe we should insist that if you got one of the special editions that you could only get it in the default two-tone paint job, but too many of the investors wanted other colors, so we said, “Ah, screw it. You can get it in whatever color you want.” But it was designed to provide a premium product for these investors. And by the way, sometimes it was called the “Investor’s Special Edition,” but like I said, I don’t think there was ever really an official name for them. It would be interesting to see…what does your window sticker say?

“‘Special Edition’ Package.”

And Colin Spooner was heavily involved in the design and specification of the Special Editions, after Mike Kimberley worked with us to develop the concept. You ever meet Colin Spooner?

No, but I hope to. I certainly know who he is, particularly in regard to development of the S1 as project engineer.

Yeah, what a talented fellow he is. There have been some really great—Lotus had, person for person, probably the most talented staff of any car maker in the world, by a long shot. The things those guys could accomplish were just unbelievable. I’m a big believer in the idea that Lotus should be headed by an engineer—adds something unique—but no one cares what I think [laughing].

Well, the burning question is who ordered the Turbo in “Lemon Yellow with gold leather interior”?

That was bought by a guy who lived here in Manhattan. It was actually more of a traditional Lotus yellow, but they had to go out and buy the leather for that!

By the way, the leather for the Turbos was made by Connelly and I think Bridge of Wier. Most people don’t realize this, but Connelly made about seven or eight different grades of leather, but for the special edition we only used the top grade, and for the production cars, depending on the color, they either used the top grade or the second to top grade, which was also awfully nice. Many high-end companies were using a middle grade. Do you have the original leather in your car?

Yes. Still extremely supple and comfortable, even for long drives.

Yeah, it’s really fabulous leather. People often don’t realize there’s leather and then there’s leather. That leather breathes very well, so you shouldn’t sweat much in there.

What were your long-term goals for the marque in the States at the time?

To become a credible presence in the high end of the US market and challenge Ferrari. While reliable statistics are non-existent at this end of the market, it appears we basically got there. In the last year, we challenged 328 sales in the US. And we had a loyalty factor of about 40%.

Ferraris are fine cars, no question about it, and Emilio Anchisi, a wonderful, very intelligent gentleman, who was running Ferrari at that time in the States, has been a great friend—we’ve shot together and socialized—and he once told me, which I think was one of the greatest compliments we were paid—that competitively, the company that concerned him was Lotus.

Anyway, it appears we were selling roughly as many Turbo Esprits as they were selling 328s. Kind of mind-boggling, and very few people knew that.

Did you get to work with Colin Chapman directly?

Yes…and no. If you think about the timing, he died two weeks before we closed the transaction establishing Lotus Performance Cars. He died December 16th of ’82, and we had wanted to close before Christmas, but ended up doing it December 31st. And we had to do it that day because the tax laws were changing to eliminate the ability to accelerate the write-offs for limited partners. So our guys were able to write-off part of their investment that first year, like the real estate partnerships we were modeled after.

By the way, it’s interesting—in reading The Lotus Forums, which I never really—well, I’m kind of a slow adopter/adapter—so I really didn’t start reading it until you mentioned it, but it’s really interesting to see a site that’s not taking sides politically, like regarding ownership of the F1 naming rights.

And I like two of the current approaches it appears Lotus is taking: namely moving more upmarket and making their own engines. Plus, of course, the racing involvement.

It also seems that when Mike [Kimberley] rejoined Lotus, he brought it back to profitability and established a stable platform. Mike was the one who was really the brains behind establishing Lotus as an engineering consultancy. And that was wildly successful.

I do believe that there are certain advantages to building relatively fewer high-end cars, not the least of which is that you ought to be able to keep your fixed costs low and your variable costs high, and if you’re building fewer cars you want to have high variable costs. That’s why all the work in the Esprit, in terms of all the hand-work back then, all that stuff is variable.

And Clive Chapman’s fabulous effort with Classic Team Lotus to revitalize and preserve all those great Lotus racing cars is to me one of the great developments—preserving that exceptional part of Lotus history that otherwise would have been lost.

One of the neat things about Lotus that I remember—I used to know Roger Becker really well, and Colin Spooner, Peter Wright, and Tony Rudd, and many others—but Spooner and those guys, on a Friday afternoon would hop in a car, even in winter, and drive to some unusual place. Like they’d drive to Finland above the Arctic Circle, or through the great St. Bernard Pass and down to Italy, and, you know, they’d spend 50 hours in the car out of a long weekend.

Not sure if it’s the case now, but at least last December, Dany Bahar said in the New York Times that he drove a BMW and Ferrari, but not a Lotus, which I thought was absolutely outrageous and extremely off-putting on many levels, particularly given the slew of awards the Evora had received.

Before he died, Chapman always had an Elite as a company car, but he also drove a couple of big Mercedes Benz’s. One I recall was silver and one was that light greenish metallic, and he did that because Mercedes—I think they still do—had a phenomenal arrangement for F1 team principals. Fred Bushell always got a Mercedes through that, too, but if they were doing something sporty or company-related, it would always be a Lotus. Also the other company leaders—Kimberley, Rudd, Spooner, Clarkson, Bishop, etc., all drove Lotuses.

After I left Lotus I had some flirtations with Yugo, if you can believe it, and I was going to drive a Yugo, before it became clear that the whole thing was doomed to fail. I think if you’re gonna sell these cars, you better drive one. How else can you credibly sell the car and learn about it as a consumer?

You know, Chapman—he could be a hard, focused businessman, as you had to be in the auto industry, but boy, was he charismatic, and everyone on the factory floor loved him. He’d go out there and there’d be dozens of employees on the floor, and he’d know everyone’s name. They just loved him. He was a genius in many disciplines, no question about it.

I remember when Chapman died, I was talking to Fred Bushell about the challenges, and he said, “Well, we always figure Colin’s ideas are good for about 3 years [laughs] so we have until about ’85/’86 and we’re OK until then.” But product development kind of cratered, although the Excel was a fabulous car. Did you ever drive an Excel?

No, but I always thought they were fantastic.

After GM took over and I was still with Lotus, running the operation over here, I had one brought over and that car generated more real interest than anything. The Esprit generated excitement, but the Excel generated real interest in terms of people wanting to buy one, which seems ironic I suppose, given Rolls’ experience with the Elite and Eclat.

We used to figure that in terms of marketing there were probably 100,000 folks in the States who’d want a Turbo Esprit if they could afford one, and there were probably another 100,000 who could afford one, but the intersection of those two groups was probably only a thousand people. So how do we find those 1,000 people? I think we did some really sophisticated direct mail, and we changed the whole advertising to emphasize—dunno if you remember the slogan, “Lotus—For the few who know the difference”?

Sure, but I always assumed it came out of the UK.

It came right out of here, with the new advertising agency that came on board in January ’87, McCann Erickson. I thought that was great. The first ad was a British Racing Green Esprit against some crushed up brown paper. Really great. It was really well-lit so you could see the green car and the paper was just sort of a fuzzy background.

Then we also did a fabulous lease arrangement with Chase Manhattan Bank. Now, this was on a car that at that point cost about $55,000, and we were able to arrange a lease where you could have the car for no money down and between $700-$800 a month, and that’s when sales ramped up dramatically.

I think we did some interesting things for Lotus. I really regret not bringing the Excel over though because we could have sold that car in the mid $20Ks, which would have been about the same price as a Porsche 944, and they were selling about 30,000 of those a year, but we only needed to sell a tiny fraction of that to really do well. Again, ironic, but different time, different price range, and different car.

When’s the last time you were over to Hethel?

About five or six years ago. About a year before Fred Bushell died. I had dinner with Fred Bushell, Colin Spooner, Terry Clarkson [Lotus Sales Director, succeeding Roger Putnam], and Mike Bishop, who was the export sales manager. Colin’s worked on a lot of interesting cars over the years.

By the way, Terry Clarkson’s picture and title are in Lotus Esprit: The Official Story, but not his name. He’s the guy handing the keys to Bobby Bell as they delivered the 30,000th Lotus production car to Bell & Colvill [page 121].

Terry Clarkson, Wes Fredericks, Fred Bushell, and John Spiech, circa 1982.

You know, I think we made three very substantial contributions to Lotus. One was that large payment I mentioned. It was a tough time for Lotus and its bankers were threatening awful things, but then we put this money into the company and bought time to help stabilize it.

[Thumbing through Lotus Esprit: The Official Story] Oh, that’s one of the first two Federal Turbo Esprits [red car, page 119]. When we brought the press over there in ’83 to drive the car, this was one of them. Drove it over on the MIRA Test Track. And there’s Terry Clarkson giving the key to Bobby Bell.

My wife used to live up the road from Bell & Colvill. She lived in Donald Campbell’s old house, in Leatherhead on the River Mole.

Hethel, 1983. Kneeling at left are Larry Griffin (Car & Driver) and at right a writer from AutoWeek. Standing, left to right, John Spiech (LPC), Kevin Wilson (Motor Trend), Peter Egan (Road & Track), Roger Becker (Lotus), Wes Fredericks (LPC), Don MacLachlan (Lotus PR), Ken Sears (Lotus), and Mike Bishop (Lotus Export Sales Manager). These are the first two production Federal Turbo Esprits. After the periodical testing they were sent to the US and used in Lotus’s first advertising shoot and other promotions.

The other valuable thing we did was create a viable dealer network over here, really for the first time, under the control of one distributor that only focused on Lotus. The network probably would have developed under Lotus Cars North America, but it didn’t have time.

The third thing we did, which Mike [Kimberley] told me was really appreciated by Hazel Chapman, was that we pretty much forced Lotus to go back to the traditional badge here. When the first cars came through with that elongated cam-lobe type badge…

Generally derided as “the squashed lozenge.”

Right. So it started showing up, and we said, “What’s this?!” And the factory said, “Well, this is our new badge.” I’m not going to tell you the personalities that were involved in forcing that through, but it was not Mike. Anyway, we kind of went ballistic and said, “We don’t know about the UK, but over here that’s just not gonna work.” And initially, they changed it back just for the US, and then when GM bought the company they changed worldwide, to what is basically the current badge. So apparently Hazel really appreciated that.

I’m not sure what the original steering wheel badge would have been on my car because I only have a later, regular two-spoke Turbo steering wheel which came with the lozenge, but the hood badge is the regular black and silver, sans-serif logo, and I’ve since replaced the steering wheel badge with the traditional black and silver logo.

It would have been the traditional Lotus badge, in black, to memorialize Jimmy Clark’s death, and that was what all our cars had. But then they switched to the British Racing Green lozenge, and there are very few of those in the States. They might be of some collector significance, I guess.

We had some fun times later on as well, after the sale to GM in late 1986. Had some conversations with Fred Bushell when he was chairman of Team Lotus about building a Team Lotus/Cosworth street car, and I thought that would have a lot of cache. This was before the McLaren M1. The idea was to develop a Lotus street car with a Cosworth-developed engine, detuned for the road. We thought it would be pretty easy to certify because it was fuel-injected, and with the fuel-injection and a lambda sensor you can pretty much do whatever you want. With it detuned from 550 or 600 horsepower down to 400 it would still be plenty quick. But that never got off the ground.

Then I had some interesting conversations with Fred in ’94/’95, the season after Lotus dropped out of Formula 1, on behalf of a fellow over here, from a very wealthy family, who approached me and wanted to take over the then-dormant team—and wanted to do it with a lot of the old Lotus guys—and had a nice conversation with Bernie Ecclestone after they started imposing new financial requirements for “new” teams to join Formula 1, but it was apparent he was just not going to grandfather Lotus back in because they had dropped out for that one season. And then there were big issues with respect to the Team Lotus trademarks, in which David Hunt, James Hunt’s brother, had an interest, and that’s the genesis of where Team Lotus is today.

The split between road cars and F1 racing was earlier. I’ve been told that when Lotus went public, in 1968 I think it was, they split the team from the car company because of concerns about liability, but Chapman controlled both, so it was immaterial.

Speaking of splits, one of the things that’s always interested me is the innovation and interaction between Lotus Cars and Lotus Engineering.

Yeah, that is interesting. Well, the Elise…that’s a very innovative car. And with the Turbo Esprit, a lot of people don’t know that there are actually ground-effects built in to the car. Mike Kimberley would know all about that. The Turbo at speed would get, I think, about 75 pounds heavier at each end.

I read somewhere that the small “spoiler” at the top edge of the louvers is there to even out the pressure across all four wheels at 100 mph.

You know why I think it’s really there? To be a little more cynical about it, it was to reduce the effect of the rear spoiler. The rear spoiler was too effective, but they didn’t want to change the styling, so they added that lip to break the airflow, so basically you’re right.

The rear spoiler is actually one of the things I don’t like so much about the Turbo’s lines.

Yeah, that’s why I liked the S1 and S2 more. Cleaner lines there, the front end is cleaner, and the sills under the doors are cleaner.

And the S2 had the lowest drag numbers of any of the Giugiaro Esprits.

Yeah, but as Tony Rudd would have pointed out to you, drag numbers are only part of the story. You’ve got the frontal area, too. Everyone forgets the frontal area.

Tony was really a genius. They worked on some phenomenal racing engines. I always found it ironic that a company that never built its own Formula 1 engine was doing all this design work for others. They had superchargers blowing in to turbo chargers, and turbo chargers blowing in to superchargers. They were getting phenomenal horsepower out of some tiny little one-cylinder thing just as a test. Tony said they’d reached the point where they could make it strong enough and they’d compressed the charge so much that the next step would be liquid or something like that, which wouldn’t work [laughing].

Tony Rudd and Mike Kimberley, early 1980s.

I’m trying to remember—there was talk that Lotus was going to switch to a ceramic turbocharger, but I don’t think they ever did.

I don’t think so either. Well, Wes, thanks very much for making time to talk, and I hope we’ll see you at Lime Rock. I think you’ve probably increased the amount of public information about these cars by a few orders of magnitude.

You’re welcome. If you think of anything else I can help with just let me know. Hard to believe how old those cars are now!

It was an exciting several years working with interesting, imaginative, and very effective people who not only could accomplish individually what it would ordinarily take a team to do, but also worked together very effectively and as a result magnified their effect. It’s sad that several of them have died recently, like Fred Bushell and Tony Rudd, but it was certainly exciting a few years ago when Mike returned as CEO and ran the company so effectively as he had back in the 70s and 80s when I was privileged to work with Lotus.

Left to Right: Robert Prescott-Walker (WhiskyBob), Bob Fogle (bobfogle), Matt Guthrie DeLange (Moxie), Wes Fredericks, and Tony Krncevic (Tony K) at the Lime Rock Historic Festival 29.


Epilogue: 43 & 3 (A Tale of Two Turbos)

I’m not sure what the odds of this are, but they’re surely quite long…

A few months back, my Turbo’s ignition lock cylinder froze in the “on” position, the starter didn’t disengage, and I couldn’t remove the key for over a minute. Consequently, the starter gear was completely stripped. Since I’d always intended for the car to have one of Tony K’s legendary tune-ups, and wanted his Esprit restoration partner, Mike Halker (TLF name “mikeh”) to do some body touch-up and electrical work, I figured I’d kill a few birds with one stone by having Mike haul it out to his shop, southwest of Toledo, for the work, as well as for Tony’s annual car show, aka the Shoreland Concours d’Whatever, also in Toledo.

Turbo and Europa at Tony K’s Shoreland Concours d'Whatever, 2011.

The day after the party, Mike hauled the Turbo to his shop, southwest of Toledo, and realized after a while that he was being followed. A gent in a Jaguar followed him in to his driveway, got out, and said with a smile, “I used to own #17.” Again, very long odds.

David Binkley not only owned #17, but was almost killed in it in 2003 when someone cut him off while backing out of their driveway and he went “50-0 in about 25 feet.” The car was totaled and David found upon examination at the hospital afterward that he had a life-threatening pre-existing heart condition that could have killed him at any moment, which was thus corrected.

After seeing #43, David’s interest in Turbo Esprits was rekindled and I helped put him on the hunt for another one. In almost no time he managed to find Investor’s Special Edition #3 (Jupiter Red with black interior) and has been driving it ever since, so he got the best of both worlds, i.e., his life back and another Turbo to replace #17.

David Binkley’s Investor’s Special Edition Turbo Esprit #3 and the author’s #43.

For photos of other Investor’s Special Edition Turbo Esprits, see here for #23, here for #34, and here for two more on TLF (build numbers unknown).

Thanks to TLF members Tony Krncevic (Tony K), Art Mason (Shark Sandwich), Robert Prescott-Walker (WhiskyBob), Mark Blanchard (Mark B), Andy Graham at Lotus Cars, and David Binkley for helping with this article. And of course Wes Fredericks!

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