Each year the Goodwood Festival of Speed showcases a featured marque, a car maker which inspires adoration, perhaps because of its style, success on the track, or the enigmatic founder behind its name. This year the opportunity falls to Lotus which is celebrated with a with a huge 28-metre-high sculpture outside Goodwood House.
But what started out 12 months ago as a celebration of its proud sporting achievements, feels more like the memorial to a fallen hero.
Looking back at the announcement made by Goodwood in December 2011, it reads “Goodwood will celebrate this much-loved British brand at an exciting time in the marque’s history, as Lotus is currently two years into a dynamic five year brand re-invigoration plan with the goal of returning the marque to its original status alongside other prestigious sports car manufacturers. The plan includes an entire new range, the first of which will be the return of the iconic Esprit in 2013.”
How telling it is, that an announcement made just six months ago, no longer bears any semblance of truth.
This year is the 60th anniversary since Colin Chapman founded Lotus and yet the past 12 months have been some of the most torrid in the marque’s history – a foray into the US IndyCar series (as an engine supplier) led to former F1 driver Jean Alesi and Simona de Silvestro both being thrown out of the Indy 500 for being too slow.
Sponsorship of the Lotus F1 team, owned by Genii Capital, was terminated in April leaving the car little more than an exercise in brand engineering. The race team, previously run under the Renault name, and prior to that Benetton, considers itself descended from the 1981 Toleman Motorsport team, further underlining the sad decline of a once proud marque.
Road cars
If you were expecting ‘two’ new Lotus variants to launch at Goodwood, then you’ll be disappointed to hear those plans have been shelved (along with many others that were set in motion by ex-CEO Dany Bahar).
The intention behind these new variants was to offer more for less, with higher-quality interior trim, a more imposing road presence and better performance – Lotus recognised that their cars were pricey compared to the competition and were working on revitalising the existing range, while they awaited the new Esprit (which had been delayed until 2014 at the earliest).
Goodwood Sculpture
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3-D infinity loop by Gerry Judah Artist and designer, Gerry Judah was commissioned to create this year’s sculpture at the Goodwood Festival of Speed, it’s the 15th he’s built for Goodwood, beginning with Audi in 1999 and including last year’s tubular E-type display for Jaguar.
The winding curves of the sculpture represent Lotus’ natural environment; cars that are built for cornering. It’s a monocoque structure, an engineering approach pioneered in F1 by Lotus. “The monocoque structure, which is made of steel plates and joined together to create the loop, is meant to highlight the engineering DNA of Lotus,” confirms Gerry. “It’s a lightweight engineering construction. I think its form shows the Lotus psychology and culture.”
Sat on the track are six significant Lotus racing cars, that have shaped the marque. They include a green-and-yellow Type 32B, the car in which Jim Clark won the 1965 Tasman Series in Australia and New Zealand. A red-and-white Type 49, in which Graham Hill raced to the F1 crown in 1968. The JPS-liveried Type 72, in which Emerson Fittipaldi became Formula One’s youngest champion in 1972.
A black-and-gold ground-effect Type 79, responsible for Mario Andretti’s world title in 1978. The yellow Lotus 99T driven by Ayrton Senna. And finally the current Lotus F1 grand prix car as driven by Kimi Raikkonen and Romain Grosjean.
The cars are held in place by their wheels, which sit in specially designed cups and are strapped to them tightly. The sculpture was delivered in 11 major sections by individual articulated lorries, each with a police escort.
Despite seeing the cars testing at Hethel last month (and thoroughly impressed I was too), new owners DRB-Hicom quickly put a stop to the kind of marketing which promotes a product before its ready to be delivered (never mind that Goodwood is one of the biggest promotional events of the year for new sports cars).
This change comes on the back of Aslam Bin Farikullah’s recent appointment as Lotus’ Chief Operating Officer (COO). As we profiled at the time, Farikullah is a production and supply chain guy, more used to making the components and sub-assemblies used by other manufacturers. He’s about as far away from being a marketer as Bahar was an engineer, so it’s hardly surprising to see such an about face.
Besides missing out on the ‘golden’ opportunity to showcase its updated products as the feature marque at Goodwood, there are many more challenges facing the Norfolk sports car maker.
Since Farikullah took over last month, DRB are now controlling everything, so any decisions or press releases must first be approved by Malaysia and in most cases the answer is no. DRB see little reason to communicate with the media, unless they have something important to say, so at least in the short-term the chatty, friendly, sometimes quirky style of ‘Updates from Hethel’ are no more.
Farikullah’s primary focus is on engineering and production, which in many respects is a good thing – Dany was more about product and brand, with the finer details of how it all came together being sorted out downstream. Because of this DRB don’t trust anyone who was close to Dany, nor any decisions that were made under his watch, so they are literally reviewing ‘everything’ (good or bad), consequently stopping anything that doesn’t meet with their approval.
As has been mentioned elsewhere, dozens of contractors and temporary staff have been dismissed at Lotus as part of a move by DRB-Hicom to limit it’s outgoing expenditures. It’s all about cutting costs, removing wastage and only producing the most profitable models (where components can readily be sourced). A description I gleaned from those inside Hethel was of an environment akin to a bootcamp – with DRB people on the ground supervising every activity and imposing the structure and routine of a volume manufacturer.
There is good reason why Farikullah was appointed as COO rather than CEO of Lotus – he’s a fixer, a company man, who knows the rules and is used to keeping a low profile. While most company leaders would by now have publicised their plans, that’s not Farikullah’s role – he’s there to clean and prepare the business for an ‘as yet’ un-named goal.
Farikullah said in a statement yesterday, “Goodwood has become the most important car culture event in the world, and the similarities between what the Festival of Speed is trying to do and what we would like to communicate are clear. It’s about showcasing the past, present and future of sports cars and motor racing. We’ll be in Goodwood to show what we’ve done over the last year, as well as the last 60 years.
“Heritage is absolutely everything. If you don’t understand your past, you can’t realise your future. We remember not only the good times, but the bad times too, it’s what makes us stronger and gives us depth of character. Lotus has been pioneering both on the road and on the track for six decades. At Goodwood we’ll be able to showcase everything the company has done, and we will use this as a foundation for the future.”
Whether that future is to continue making sports cars is as yet unclear, but unless something changes (soon) I fear the 2012 Goodwood Festival of Speed may be remembered as a swansong for the marque rather than a celebration of its first 60 years.
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What about Bahar?
As explained last month, the reason for ex-CEO Bahar’s dismissal was his failure to meet the covenants of the company’s £270 million syndicated loan. DRB-Hicom discovered this additional liability while completing its purchase of Proton and with several bankers wishing to exit from the loan (due to Lotus being in breach), this left DRB-Hicom to pick up the pieces.
Sulaiman Yahya, head of corporate communications at DRB-HICOM, revealed in a statement last week that the company had been given until this month to meet certain conditions on its loan agreements with its banks.
He confirmed, “As early as July last year, the signs of trouble emerged when Lotus failed to meet certain conditions in its loan agreement with the syndicate of Malaysian banks. But after seeking a second extension in November last year, the banks stopped further drawdowns and gave an extension till the end of this month.”
Lotus chairman Dato’ Mohd Khamil has been working on a plan to help stabilise the car maker, by refinancing the loan under new terms.
Meanwhile ex-CEO Dany Bahar has been preparing his case against DRB-Hicom for wrongful dismissal – he will argue that his actions were within the mandate given to him as CEO (by Dato’ Syed) and therefore he is due a 5% commission payment if DRB-Hicom sell all or part of Lotus.
DRB’s Sulaiman said in response, “We had anticipated this when Lotus dismissed him.” He added: “Bahar was dismissed based on the results of Lotus’ investigations into his conduct. We shall rely on this evidence should he wish to take legal action.”
Headline credit: Inspired by Mike Harvey (@mikeyharvey)
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Hi Steve, many thanks for the update!
Do you have any news about the remaining of Coco Donato or Wolf Zimmermann?
Its all just a very sad story!
Ironically, it coud be the let go of Dany by DRB, that will put Lotus over the cliff……
When I was in contact a few weeks ago, my understanding is that they are waiting to hear what Farikullah has planned for the business. They don't want to leave if there is still a chance of realising the vision outlined in the New Era plan.
As of 2 weeks ago, there was no sign of a plan being shared, the focus was still on cost control. I'm pleased to hear what Farikullah had to say about the presence of Lotus at Goodwood, but then these are only words and whilst it's nice to see all the old racing cars on display, nobody that I know of is feeling much like celebrating the past when the future is still so uncertain.
Despite DRB's concerns I detect a willingness (by those brought on board by Dany) to leave the past behind – their loyalty is to the brand and the potential they all believed in, but patience is wearing thin and of course competitors are relishing the opportunity to feed on Lotus' troubles.
Do you think the two cars dropped are so far along the development path that they will reappear at Paris or Detroit? I think Lotus need the new Esprit to be a 911 a like range from £70 or 80k upwards. Then they need a single car below with a wide breadth of appeal below to take on the Boxster. Not directly, but in a rawer more fun way!
Hi Angus, the prototypes were ready as far as I could see, and undertaking the final stage of road testing. The question raised by Farikullah was whether the company was ready to produce them.
I can empathise with that sentiment – there's been too much focus on 'promise' rather than' delivery', so DRB are determined to cut the rot. I can't see why they would stop the projects entirely since they make a lot of sense.
I have pictures, but it wouldn't be appropriate to share them at this stage. The feedback I gave at the time was how 'right' they looked and most importantly they were the first Lotuses in a 'very' long time that I'd consider instead of an equivalent Porsche.
But they do need to be built to the standard of their competitors, so we should see them sometime soon.
The Esprit however is a long way away, it was on target for 2013 before DRB's acquisition of Proton and even though the green light was given to continue its development, reduced expenditure means the team have had to almost start again.
I don't think you can say there's been too much focus on promise from Lotus. Obviously the company produced an ambitious plan but people seemed to expect finished cars to appear 'the next day'. It takes years to produce a genuinely new car and Lotus effectively were starting from stratch with a totally new production process, new factory, etc. Despite what many think I believe that they have come a long way but mostly behind the scenes. Unfortuantely, for most people, unless they see new cars they see nothing.
Ross Meigh – I agree that despite the widespread cynicism they've come a long way in a short time – but from discussions I've had internally they acknowledge they tried to do too much at once. Also Dany's style of management was raise expectations and then work like a slave to make it happen.
What many people fail to remember is that Dany was brought in with the mandate to turn the company around – not to run it as it had been. He was promised a respectable budget and carte blanche to bring in the people and facilities to make the vision a reality.
The fly in the ointment was the timeframe given to achieve it. Proton knew they were heading to a very dark place (in terms of their financial performance) and rightly or wrongly they (Dato' Syed) placed a bet on Dany turning Lotus around and helping to offset some of Proton's decline.
While Dany may not have covered himself in glory, can you really blame him for taking on his first CEO role with such a mandate? That's the kind of challenge that most people in his position would have jumped at. The risk was high, but that's exactly the kind of buzz that many of us enjoy.
He made mistakes, but that's how we all learn to innovate and grow – fortunately few of us fail quite as publicly..
Nice to see a strong focus on cost control and manufacturing. Need to be careful not to totally cut the marketing/PR cord though. After all, its marketing and PR that gets the cars in front of the customers.
The question that remains open is whether DRB's motivation is tidy the business up prior to break-up and disposal or if they 'really' have the appetite to turn-around a low volume sportscar business.
Despite the rhetoric we've seen nothing to provide any reassurance of the latter.
Yes, the quality, build cost and reliability of the cars needs to be improved, but that's a little like saying the decks on the Titanic could do with a bit of spit and polish..
Perhaps DRB do understand the market which Lotus competes in, but up until recently, that's not the impression given prior to Dany's departure or immediately thereafter. Hopefully we're wrong.
Have you seen this recent news development Steve?:
http://www.edp24.co.uk/business/three_group_lotus_managers_are_suspended_1_1425520
Hope youll be featuring a write up/investigation in it – your Lotus saga coverage aand insight to date has been simply superb to.
*on it
Thanks Giuseppe, I saw the news earlier. I spoke with a couple of Lotus people at Goodwood yesterday and learned that a few faces were missing that I'd expected to be there.
As I said in my article last week, DRB don't trust the people Dany hired and are systematically rooting out those which they believe were culpable in Dany's actions. It's a slippery slope, the DRB guys on the ground at Hethel were described to me as 'bullying' Lotus staff – going around challenging and trusting nobody.
It's no wonder some of Lotus best people are actively job hunting – unfortunately in such circumstances you always lose your 'best' employees.
Is it true that Gino Rosato and Wiebke Baeuer are 2 of the 3 to be suspended?
Giuseppe Vullo – I've been in touch with DRB-Hicom this afternoon and for the time being the company do not wish to comment on these reports, so I'll avoid speculating on the news until I've received more information on what the individuals may have been accused of.
Wiebke Baeuer has been closely involved with the launch of Lotus Originals, the new line of brand outlets, one of which was due to launch in London soon. These are very much a part of Dany's 'New Era' plan, so I'd not be surprised if DRB chose to cancel this business line.
Gino Rosato is responsible for Lotus Operations, so he'll have been directly in the firing line of the new COO Aslam Farikullah.
If they have indeed been suspended, then it will most likely be (as with Dany) part of a formal dismissal process based on the investigations by E&Y, Rothschild and DRB. My understanding is that the covenants which were breached, included the way monies could be used when drawn down from the syndicated loan.
If certain members of Dany's management had used these funds while knowingly breaching the loan agreement, then as DRB now seek to refinance these loans they 'might' be required to remove any employees who've become tainted by the whole affair.
Of course it could just be a convenient way of stripping out more of Lotus management and thereby making it easier to assimilate parts of the company into DRB's automotive business.
They've promised to update me as soon as the situation changes (i.e. a decision is made to turn any suspensions into formal dismissals).
Giuseppe Vullo – By the way, have you seen this YouTube clip showing what Kimi Raikkonen thinks of Gino Rosato? http://www.youtube.com/watch?v=vT8hCkPuCIw