Re. REPLACEMENT FOR ESPRIT?
Discussion
Hey all,
With all the talk of Elise, Exige, M250, DOT exemption for the continuation of the Esprit,... YADA, YADA, YADA... Hope springs eternal...
I know there are many engineers in our ranks, but as a Senior Executive with several major multi-national Hotel and Real Estate companies over the past 25 years. And having intensive experience with Financial Reporting, Balance and Income Statements, procurring major bank financing, finding and structuring acquisitions, and designing and submitting corporate restructuring plans, I think we as a group are overlooking a virtual certainty as things now exist. Namely, the discontinuation of Lotus as a viable manufacturer of automobiles.
In documents submitted to the US Dept. of Transportation, Lotus claims to have manufactured 2,569 vehicles in 1999, 2,993 in 2000 and 5,181 in 2001 or a 3 year total of 10,743 vehicles. They exported 112, 162 and 48 vehicles to the US in Model Years 1999, 2000 and 2001 respectively and quotes Net Income/ as £12,360,000, <£20,244,000>, and <£7,613,000> respectively for the same years, or a cumulative total of <£15,389,000> or nearly <£1,500>/vehicle. The most important trend in this information is that as units produced increased, losses increased as well.
Further, if anyone is harboring the idea that Proton will continue to absorb these losses, it should be noted that according to Lotus: "the entity that ultimately controls Lotus Cars is the Malaysian company Perusahan Otomobile Nasional Berhad. However, Lotus' balance sheets and income statements do not indicate that this Asian entity, itself a State Owned motor vehicle manufacturer, makes capital contributions to Lotus or otherwise participates in the management of this British company".
In other words, aside from their initial stock purchase in Lotus, they have not contributed a thing to the company, except to forego a dividend on their stock. Considering that Proton is a State owned company (and one who's increasingly sporty line is destined to compete with Lotus for sales), and further considering the current state of the Malaysian economy and political climate, It is unrealistic to assume they ever will contribute Development or Operating Capital to Lotus.
So it boils down to Lotus securing financing (read debt) from Commercial Lenders. That having been said, with no charismatic, hands-on leader, no high profile racing program spurring sales, no model currently meeting spec for sale in the US (consider that perhaps the reason no engine has been spec'd for a US spec Elise, is that no manufacturer, ie. Toyota, is willing to spend the capital to provide for the increased production capacity necessary to produce these engines when confidence in a long term deal, read payback, is so shaky), no viable model on the drawing board (unable to secure financing for M250 development), as well as limited sales expectations due both to the type of car produced as well as their comparably minuscule dealer network, EnRon has a better chance of getting a bank deal signed.
I agree that this is a shame, but in today's harsh business climate, the greatest future potential for Lotus is that Lotus Engineering (making the only profit the company has) is spun off by Proton in an effort to recoup their losses or pulled 'in house' designing cars for Proton (not politically sanguine considering all the unemployed Malaysian engineers, not to mention LE's personnel's willingness to move to Asia).
I realize that Lotus has pulled back from the brink before, but that was nearly 20 years ago when business, labor and political climates were very different, and they were then led by the trusted vision of one man. I know how Lenders think, and the situation at Lotus defines it as a losing proposition. With the recent devaluation of their portfolios, Banks will not be looking to come to anyone's rescue. And, the fact that Lotus has trimmed it's personnel so dramatically in the past 2 years, there simply are not a lot of jobs at stake to save either. As much as I love Lotus, were they to offer an IPO, I could not risk my money by buying in. All the indicators say it's a bad choice to make.
I'm not being negative here, just interpreting the facts as my years of training and experience has taught me to do. If I had to prognosticate, I would say that Lotus, as we know it, will disappear within the next 36 months. To those of us that own these cars, it behooves us to make some decisions as well, ranging from restoring our cars while parts and services are still readily available to selling them while they still command a decent resale and looking for another love. I'm sticking with mine, and plan to continue to improve it. But, others, in different situations, may want to consider what the potential disappearance of Lotus could mean to them before events make any decisions moot. Let's hope I'm wrong, but in this case, it's almost like trying to pick the winner in a race of one...Jim '85TE
>>> Edited by lotusguy on Friday 6th December 18:41
>>> Edited by lotusguy on Friday 6th December 18:42
With all the talk of Elise, Exige, M250, DOT exemption for the continuation of the Esprit,... YADA, YADA, YADA... Hope springs eternal...
I know there are many engineers in our ranks, but as a Senior Executive with several major multi-national Hotel and Real Estate companies over the past 25 years. And having intensive experience with Financial Reporting, Balance and Income Statements, procurring major bank financing, finding and structuring acquisitions, and designing and submitting corporate restructuring plans, I think we as a group are overlooking a virtual certainty as things now exist. Namely, the discontinuation of Lotus as a viable manufacturer of automobiles.
In documents submitted to the US Dept. of Transportation, Lotus claims to have manufactured 2,569 vehicles in 1999, 2,993 in 2000 and 5,181 in 2001 or a 3 year total of 10,743 vehicles. They exported 112, 162 and 48 vehicles to the US in Model Years 1999, 2000 and 2001 respectively and quotes Net Income/
Further, if anyone is harboring the idea that Proton will continue to absorb these losses, it should be noted that according to Lotus: "the entity that ultimately controls Lotus Cars is the Malaysian company Perusahan Otomobile Nasional Berhad. However, Lotus' balance sheets and income statements do not indicate that this Asian entity, itself a State Owned motor vehicle manufacturer, makes capital contributions to Lotus or otherwise participates in the management of this British company".
In other words, aside from their initial stock purchase in Lotus, they have not contributed a thing to the company, except to forego a dividend on their stock. Considering that Proton is a State owned company (and one who's increasingly sporty line is destined to compete with Lotus for sales), and further considering the current state of the Malaysian economy and political climate, It is unrealistic to assume they ever will contribute Development or Operating Capital to Lotus.
So it boils down to Lotus securing financing (read debt) from Commercial Lenders. That having been said, with no charismatic, hands-on leader, no high profile racing program spurring sales, no model currently meeting spec for sale in the US (consider that perhaps the reason no engine has been spec'd for a US spec Elise, is that no manufacturer, ie. Toyota, is willing to spend the capital to provide for the increased production capacity necessary to produce these engines when confidence in a long term deal, read payback, is so shaky), no viable model on the drawing board (unable to secure financing for M250 development), as well as limited sales expectations due both to the type of car produced as well as their comparably minuscule dealer network, EnRon has a better chance of getting a bank deal signed.
I agree that this is a shame, but in today's harsh business climate, the greatest future potential for Lotus is that Lotus Engineering (making the only profit the company has) is spun off by Proton in an effort to recoup their losses or pulled 'in house' designing cars for Proton (not politically sanguine considering all the unemployed Malaysian engineers, not to mention LE's personnel's willingness to move to Asia).
I realize that Lotus has pulled back from the brink before, but that was nearly 20 years ago when business, labor and political climates were very different, and they were then led by the trusted vision of one man. I know how Lenders think, and the situation at Lotus defines it as a losing proposition. With the recent devaluation of their portfolios, Banks will not be looking to come to anyone's rescue. And, the fact that Lotus has trimmed it's personnel so dramatically in the past 2 years, there simply are not a lot of jobs at stake to save either. As much as I love Lotus, were they to offer an IPO, I could not risk my money by buying in. All the indicators say it's a bad choice to make.
I'm not being negative here, just interpreting the facts as my years of training and experience has taught me to do. If I had to prognosticate, I would say that Lotus, as we know it, will disappear within the next 36 months. To those of us that own these cars, it behooves us to make some decisions as well, ranging from restoring our cars while parts and services are still readily available to selling them while they still command a decent resale and looking for another love. I'm sticking with mine, and plan to continue to improve it. But, others, in different situations, may want to consider what the potential disappearance of Lotus could mean to them before events make any decisions moot. Let's hope I'm wrong, but in this case, it's almost like trying to pick the winner in a race of one...Jim '85TE
>>> Edited by lotusguy on Friday 6th December 18:41
>>> Edited by lotusguy on Friday 6th December 18:42
Lotus's financial results for the entire group show a loss. In the past few years Engineering has not made money due to the overall world economy going down. In addition, Proton's reluctance to invest was driven by the fact that a minority shareholder (artioli) would not invest. It took Proton a while to get him out (recent news) and they have put in a sizabel amount of money to bring the new cars to market. For the first time in a while, I think they are on track.
Proton has had a few opportunites to sell Lotus and passed. They seem committed for now...
Just my .02 worth...
Roy
ps. Keep in mind that this document was submitted in order to get an excemption. It's the worse news they could put together....
>> Edited by Roy W. Olivier on Friday 6th December 19:31
Proton has had a few opportunites to sell Lotus and passed. They seem committed for now...
Just my .02 worth...
Roy
ps. Keep in mind that this document was submitted in order to get an excemption. It's the worse news they could put together....
>> Edited by Roy W. Olivier on Friday 6th December 19:31
Roy,
All of what you say is true, and I did, having petitioned for Federal exemptions numerous times myself, take into account the nature of their petition.
But, my post is merely based upon the certified financial records and real world events surrounding Lotus. Such as the layoffs in Hethel, cancellation of the M250, further delays of the Elise into the US (which by the way dilute it's innovation as other models 'catch up').
Additionally, Proton's 'infusion' of capital into Lotus current operating year equates to little more than the cost of buying Artioli out and will still cause Lotus to operate at a loss, albeit just ahead of bankrupcy, which would render Proton's initial investment worthless.
As far as courting previous suiters, these deals involved Proton carrying long term debt in order that a financing structure could be made with a lender in order to consummate the deal, something Proton was unwilling to do. This was explained in Proton's last Shareholder's Report. I hope you are correct, I think that you are not... Jim '85TE
All of what you say is true, and I did, having petitioned for Federal exemptions numerous times myself, take into account the nature of their petition.
But, my post is merely based upon the certified financial records and real world events surrounding Lotus. Such as the layoffs in Hethel, cancellation of the M250, further delays of the Elise into the US (which by the way dilute it's innovation as other models 'catch up').
Additionally, Proton's 'infusion' of capital into Lotus current operating year equates to little more than the cost of buying Artioli out and will still cause Lotus to operate at a loss, albeit just ahead of bankrupcy, which would render Proton's initial investment worthless.
As far as courting previous suiters, these deals involved Proton carrying long term debt in order that a financing structure could be made with a lender in order to consummate the deal, something Proton was unwilling to do. This was explained in Proton's last Shareholder's Report. I hope you are correct, I think that you are not... Jim '85TE
Well, I really don't want to get into a debate in a public forum, but, here's my .02 worth...
"But, my post is merely based upon the certified financial records and real world events surrounding Lotus. Such as the layoffs in Hethel, cancellation of the M250, further delays of the Elise into the US (which by the way dilute it's innovation as other models 'catch up')."
Yos, these events occured. One of them was directly related to their financial condition, the other two actions were not based only on their financial condition. The M250 was a design that did not allow for easy export to other countries. After Proton took more direct control of Lotus, they decided that any new car had to be a "world" car. Frankly, I think they made the right long term decision; designing a car for UK and Europe today is not a wise choice. The Elise delays were based on many factors one of which was money. Others included a valid debate in the factory as to the potential success of the car in the US. Much of the factory remembers the US stating they could sell thousands of Elans only to sell 800; many of those with sizable rebates. There was strong resistance to the project which had to be addressed. I'm not saying that money was not a factor in these, I'm just saying that it was not the only factor.
"Additionally, Proton's 'infusion' of capital into Lotus current operating year equates to little more than the cost of buying Artioli out and will still cause Lotus to operate at a loss, albeit just ahead of bankrupcy, which would render Proton's initial investment worthless. "
It seems you are making my point. Why would Proton invest at all if the outlook was that they would lose all of their initial investment and the new infusion? They would not invest in a losing case, they are business people who make those decisions carefully. If it was a lost cause, as you state, they would simply shut it down or sell if for that they could get for it as Ford recently did with the "Think" mess.
"As far as courting previous suiters, these deals involved Proton carrying long term debt in order that a financing structure could be made with a lender in order to consummate the deal, something Proton was unwilling to do. This was explained in Proton's last Shareholder's Report. "
M&A discussions are not always reported in annual reports. My statement is based on the fact that I, as CEO and founder of two companies, I was directly involved in buying and selling. I have been told, by Lotus Senior Management, of two large cash offers for Lotus that did not happen for various reasons. These offers were before the global economic downturn and it's doubful that they would happen again, however, Lotus is a valuable commodity and I am confident that if Proton wanted to sell it, they could.
"I hope you are correct, I think that you are not"
Time will tell
Roy
"But, my post is merely based upon the certified financial records and real world events surrounding Lotus. Such as the layoffs in Hethel, cancellation of the M250, further delays of the Elise into the US (which by the way dilute it's innovation as other models 'catch up')."
Yos, these events occured. One of them was directly related to their financial condition, the other two actions were not based only on their financial condition. The M250 was a design that did not allow for easy export to other countries. After Proton took more direct control of Lotus, they decided that any new car had to be a "world" car. Frankly, I think they made the right long term decision; designing a car for UK and Europe today is not a wise choice. The Elise delays were based on many factors one of which was money. Others included a valid debate in the factory as to the potential success of the car in the US. Much of the factory remembers the US stating they could sell thousands of Elans only to sell 800; many of those with sizable rebates. There was strong resistance to the project which had to be addressed. I'm not saying that money was not a factor in these, I'm just saying that it was not the only factor.
"Additionally, Proton's 'infusion' of capital into Lotus current operating year equates to little more than the cost of buying Artioli out and will still cause Lotus to operate at a loss, albeit just ahead of bankrupcy, which would render Proton's initial investment worthless. "
It seems you are making my point. Why would Proton invest at all if the outlook was that they would lose all of their initial investment and the new infusion? They would not invest in a losing case, they are business people who make those decisions carefully. If it was a lost cause, as you state, they would simply shut it down or sell if for that they could get for it as Ford recently did with the "Think" mess.
"As far as courting previous suiters, these deals involved Proton carrying long term debt in order that a financing structure could be made with a lender in order to consummate the deal, something Proton was unwilling to do. This was explained in Proton's last Shareholder's Report. "
M&A discussions are not always reported in annual reports. My statement is based on the fact that I, as CEO and founder of two companies, I was directly involved in buying and selling. I have been told, by Lotus Senior Management, of two large cash offers for Lotus that did not happen for various reasons. These offers were before the global economic downturn and it's doubful that they would happen again, however, Lotus is a valuable commodity and I am confident that if Proton wanted to sell it, they could.
"I hope you are correct, I think that you are not"
Time will tell
Roy
Roy,
On the contrary, I think debate is a healthy thing, and I respect your knowledge and point of view in the matter.
But, when you say: "...these events occured. One of them was directly related to their financial condition, the other two actions were not based only on their financial condition. The M250 was a design that did not allow for easy export to other countries..."
My question is why did such a project get so far as to make public announcements to the press, not to mention the displaying of a full scale mock-up at the Frankfurt Auto Show in 1999. Presumably at a serious Balance Sheet penalty for a company in ill health? This action alone telegraphs major alarm signals to any Lender.
Further, you go on to say:"...After Proton took more direct control of Lotus, they decided that any new car had to be a "world" car. Frankly, I think they made the right long term decision; designing a car for UK and Europe today is not a wise choice."
Agreed.
And:"... The Elise delays were based on many factors one of which was money. Others included a valid debate in the factory as to the potential success of the car in the US. Much of the factory remembers the US stating they could sell thousands of Elans only to sell 800; many of those with sizable rebates."
This is so flawed an area of reasoning by Lotus Management as to be almost laughable. Is there any correlation to a car which was manufactured and marketed over 30 years ago, at a time when one's choice of sporty 2 seaters was staggering to the point of almost oozing from the very asphalt compared to the choices of today's meager present day 'prozac inspired' sports coupes? Certainly a realization of the differences in demographic alone with people staying single longer into adulthood and delaying planning a family, disposing of greater amounts of personal income for personal gratification, not to mention the greater emancipation and monetary independence of women adding to the mix, should clear up any misconception that this could possibly be a repeat of those bygone days.
And,:" There was strong resistance to the project which had to be addressed..." By whom? Lotus employees? Proton, who was in no position to judge the world market?
You further reply: " Why would Proton invest at all if the outlook was that they would lose all of their initial investment and the new infusion? They would not invest in a losing case, they are business people who make those decisions carefully. If it was a lost cause, as you state, they would simply shut it down or sell if for that they could get for it as Ford recently did with the "Think" mess."
Not at all, Ford was answerable to a broad group of shareholders, many of them institutional, to whom profit is the name of the game. The fact is that, contrary to Ford, the decision makers at Proton are driven by the political climate in Maylaysia. To date, ownership of Lotus has been a big chip in the National Pride game of an emerging Minority World Industrial country. Woe be to the politician who tries to face their electorate after flushing copius amounts of the National Treasury down the drain via investment in a Foreign company. Better to chase the bet, buy some more time, and let the next guy deal with it.
M&A discussions are not always reported in annual reports. A
Again, agreed.
"My statement is based on the fact that I, as CEO and founder of two companies, I was directly involved in buying and selling."
Extremely laudible!
"I have been told, by Lotus Senior Management, of two large cash offers for Lotus that did not happen for various reasons..."
Not much to differ with here, except the long term debt issue I previously mentioned, as reported in WSJ.
"Lotus is a valuable commodity and I am confident that if Proton wanted to sell it, they could."
Are they really such a valuable commodity? Do they posess large cash reserves? Competitive market share? Innovative patents? Considering the recent demographic shifts, do they even still posess the prestige once earned on the track, or the exposure from shows like The Prisoner, The Avengers? Are even the Bond movies showcasing the cars allocated to the nostalgia bin by present day young people such as the model T's of the Our Gang and Keystone Cops movies were to us?
I mentioned your experience founding and heading companies as laudible and I truly mean that. Virtually the only way for a limited production manufacturer of anything to survive in today's world is to offer some benefit (read financial) to a larger corporation, something GM apparently decided Lotus had not. Or to be a prestige trophy to a Government, as financial information leads one to believe Lotus is to Maylaysia. Or to be the dreamchild of some strong Entrepreneur who can make decisions based upon matters other than how they will effect the share price, such as Henry Ford. Unfortunately, I don't believe that either Bill Gates or the Sultan of Brunai posess the itch to be a carmaker.
As I said, this is one prediction where I would much rather be wrong in my judgement than right. And, as you said: "Only time will tell..."
And let me restate, lest there be any confusion as to my loyalty. My passion for these automobiles and this company is immeasurable. Every time... EVERY TIME, I see someone driving a Viper, 'Vette, or Porsche, I smile to myself, aware of the fact that "they just don't know..."
Be well my friend, and thank you for your insights...Jim McFadden '85TE
>> Edited by lotusguy on Saturday 7th December 02:04
On the contrary, I think debate is a healthy thing, and I respect your knowledge and point of view in the matter.
But, when you say: "...these events occured. One of them was directly related to their financial condition, the other two actions were not based only on their financial condition. The M250 was a design that did not allow for easy export to other countries..."
My question is why did such a project get so far as to make public announcements to the press, not to mention the displaying of a full scale mock-up at the Frankfurt Auto Show in 1999. Presumably at a serious Balance Sheet penalty for a company in ill health? This action alone telegraphs major alarm signals to any Lender.
Further, you go on to say:"...After Proton took more direct control of Lotus, they decided that any new car had to be a "world" car. Frankly, I think they made the right long term decision; designing a car for UK and Europe today is not a wise choice."
Agreed.
And:"... The Elise delays were based on many factors one of which was money. Others included a valid debate in the factory as to the potential success of the car in the US. Much of the factory remembers the US stating they could sell thousands of Elans only to sell 800; many of those with sizable rebates."
This is so flawed an area of reasoning by Lotus Management as to be almost laughable. Is there any correlation to a car which was manufactured and marketed over 30 years ago, at a time when one's choice of sporty 2 seaters was staggering to the point of almost oozing from the very asphalt compared to the choices of today's meager present day 'prozac inspired' sports coupes? Certainly a realization of the differences in demographic alone with people staying single longer into adulthood and delaying planning a family, disposing of greater amounts of personal income for personal gratification, not to mention the greater emancipation and monetary independence of women adding to the mix, should clear up any misconception that this could possibly be a repeat of those bygone days.
And,:" There was strong resistance to the project which had to be addressed..." By whom? Lotus employees? Proton, who was in no position to judge the world market?
You further reply: " Why would Proton invest at all if the outlook was that they would lose all of their initial investment and the new infusion? They would not invest in a losing case, they are business people who make those decisions carefully. If it was a lost cause, as you state, they would simply shut it down or sell if for that they could get for it as Ford recently did with the "Think" mess."
Not at all, Ford was answerable to a broad group of shareholders, many of them institutional, to whom profit is the name of the game. The fact is that, contrary to Ford, the decision makers at Proton are driven by the political climate in Maylaysia. To date, ownership of Lotus has been a big chip in the National Pride game of an emerging Minority World Industrial country. Woe be to the politician who tries to face their electorate after flushing copius amounts of the National Treasury down the drain via investment in a Foreign company. Better to chase the bet, buy some more time, and let the next guy deal with it.
M&A discussions are not always reported in annual reports. A
Again, agreed.
"My statement is based on the fact that I, as CEO and founder of two companies, I was directly involved in buying and selling."
Extremely laudible!
"I have been told, by Lotus Senior Management, of two large cash offers for Lotus that did not happen for various reasons..."
Not much to differ with here, except the long term debt issue I previously mentioned, as reported in WSJ.
"Lotus is a valuable commodity and I am confident that if Proton wanted to sell it, they could."
Are they really such a valuable commodity? Do they posess large cash reserves? Competitive market share? Innovative patents? Considering the recent demographic shifts, do they even still posess the prestige once earned on the track, or the exposure from shows like The Prisoner, The Avengers? Are even the Bond movies showcasing the cars allocated to the nostalgia bin by present day young people such as the model T's of the Our Gang and Keystone Cops movies were to us?
I mentioned your experience founding and heading companies as laudible and I truly mean that. Virtually the only way for a limited production manufacturer of anything to survive in today's world is to offer some benefit (read financial) to a larger corporation, something GM apparently decided Lotus had not. Or to be a prestige trophy to a Government, as financial information leads one to believe Lotus is to Maylaysia. Or to be the dreamchild of some strong Entrepreneur who can make decisions based upon matters other than how they will effect the share price, such as Henry Ford. Unfortunately, I don't believe that either Bill Gates or the Sultan of Brunai posess the itch to be a carmaker.
As I said, this is one prediction where I would much rather be wrong in my judgement than right. And, as you said: "Only time will tell..."
And let me restate, lest there be any confusion as to my loyalty. My passion for these automobiles and this company is immeasurable. Every time... EVERY TIME, I see someone driving a Viper, 'Vette, or Porsche, I smile to myself, aware of the fact that "they just don't know..."
Be well my friend, and thank you for your insights...Jim McFadden '85TE
>> Edited by lotusguy on Saturday 7th December 02:04
GM ??? They did and they sold it after they finished work on the Corvette and other projects. Ed, no matter what anyone says we can not read the minds of the Proton Executive staff and no matter what the background of people expressing opinions, they are just opinions of people on the outside looking in. None of us are in the auto industry, much less privy to the internal working of Lotus or Proton. While we respect these people individual opinions, the auto industry is vastly different business than other types companies. Especially a small limited production auto company whose fate may hinge on the success of a single model. So don't get too bummed out. No disrespect to both of these guys but its not like any of them has inside info on this matter. Now if this was Peal and Arnie having this chat I would be waiting the outcome of the discussion on pin and needles. otherwise don't take the sometimes ramblings of us too seriously even mine at times.
Calvin
Calvin
Calvin,
What you say is true to a very great extent. And this applies to all previous discussions regarding the future viability of the company and it's product lines as well as the mere assumption that Lotus will be an ongoing concern.
However, in order for a business to survive, it must (read MUST) serve a purpose. In this case, these are limited to:
a: Dominating or posessing sufficient Market share
to produce profit.
b: Serving to boost the owners prestige in
sufficient amounts to justify any operating
losses. Or foregoing the profits the same
investment could have made in other ventures.
c: Posessing assets, both real and/or intellectual
sufficient to exceed operating losses, with the
expectation that they will reap greater benefit
in the future. Through either selling these
assets or employing them to produce profits.
Based upon information about both companies, Lotus need for capital, the cost of money, the world economic climate (ie. what happens when the UK goes Euro?, Proton's investment can go south if something wrong in Germany, or any other EU country, devalues their holdings), the attitude of Lenders and Lotus persistently bad business track record, all of which are available to the public. If one is sufficiently experienced to understand this information, certain intelligent conclusions can be made. That doesn't mean these will ultimately be correct as the variables upon which they are based are constantly in flux, while the conclusions themselves are fixed in time. On the other hand, if one were clairvoyant, there would be no need for discussion, merely the announcement of the pending outcome.
And since this outcome will affect each one of us in varying degrees, an awareness of the possible scenarios is not only important, but prudent. See you and Shiela on Saturday night at Jesse's I hope. I'll be stag as Brenda's in Mexico doing another tournament. 'Til then...Jim '85TE
What you say is true to a very great extent. And this applies to all previous discussions regarding the future viability of the company and it's product lines as well as the mere assumption that Lotus will be an ongoing concern.
However, in order for a business to survive, it must (read MUST) serve a purpose. In this case, these are limited to:
a: Dominating or posessing sufficient Market share
to produce profit.
b: Serving to boost the owners prestige in
sufficient amounts to justify any operating
losses. Or foregoing the profits the same
investment could have made in other ventures.
c: Posessing assets, both real and/or intellectual
sufficient to exceed operating losses, with the
expectation that they will reap greater benefit
in the future. Through either selling these
assets or employing them to produce profits.
Based upon information about both companies, Lotus need for capital, the cost of money, the world economic climate (ie. what happens when the UK goes Euro?, Proton's investment can go south if something wrong in Germany, or any other EU country, devalues their holdings), the attitude of Lenders and Lotus persistently bad business track record, all of which are available to the public. If one is sufficiently experienced to understand this information, certain intelligent conclusions can be made. That doesn't mean these will ultimately be correct as the variables upon which they are based are constantly in flux, while the conclusions themselves are fixed in time. On the other hand, if one were clairvoyant, there would be no need for discussion, merely the announcement of the pending outcome.
And since this outcome will affect each one of us in varying degrees, an awareness of the possible scenarios is not only important, but prudent. See you and Shiela on Saturday night at Jesse's I hope. I'll be stag as Brenda's in Mexico doing another tournament. 'Til then...Jim '85TE
Ed,
Sorry to 'Bum you out', these are merely an interpretation of existing facts. Certainly not all the facts, but a broad enough view of the essentials to lead me to believe in the case I present. Having said that, I too becamed 'Bummed' when these realizations hit me.
But they in no way deminish my love of the marque, it's distinguished history, my Esprit or my willingness to do whatever I can, within personal goals and limits, to contribute to Lotus continued existence.
If the worst case does occur, well "Better to have loved and lost..." as they say. I will continue to own my car and drive it until either it, or I gives up the ghost. Peace... Jim '85TE
Sorry to 'Bum you out', these are merely an interpretation of existing facts. Certainly not all the facts, but a broad enough view of the essentials to lead me to believe in the case I present. Having said that, I too becamed 'Bummed' when these realizations hit me.
But they in no way deminish my love of the marque, it's distinguished history, my Esprit or my willingness to do whatever I can, within personal goals and limits, to contribute to Lotus continued existence.
If the worst case does occur, well "Better to have loved and lost..." as they say. I will continue to own my car and drive it until either it, or I gives up the ghost. Peace... Jim '85TE
ErnestM said: Lotus has about 20 patents registered with the US Patent office by the way. The last one granted about 4 to 5 months ago...
Just FYI
ErnestM
Ernest,
You are quite correct. Lotus has in fact been granted 22 patents by the US Patent & Trademark Office. 21 of them are auto related, the 22nd concerns the Type 108, or Lotus Olympic Gold Medal winning bicycle. You can review these at:
http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=Lotus+Cars&FIELD1=ASNM&co1=AND&TERM2=&FIELD2=&d=pall
Makes for some interesting, albeit purposeful, reading. Of greater interest would be the number of requests for license rights to these patents by other car manufacturers, including Proton. Perhaps a greater measure of their percieved innovativeness.
It does however give insight to where their 'in-house' priorities lay in terms of auto design and manufacture. Certainly a plus in the assets column...Jim '85TE
I understand Jim/Clavin... I'm just glad you didn't post this discussion on December 17th of 2001, the day I decided to purchase my Lotus. I've grown to love my Esprit and I too will help out the "cause" however possible. I have both time and money invested in Lotus.
BTW- I'm printing a copy of all discussions on this thread to see if any or all come to fruition... I hope you're wrong on all this Jim.
BTW(2)- Jim... have you ever thought about writing for an Auto Magazine... You write a hell of a persuasive essay.... Either that or I've been reading too many 3rd grade reports...
BTW- I'm printing a copy of all discussions on this thread to see if any or all come to fruition... I hope you're wrong on all this Jim.
BTW(2)- Jim... have you ever thought about writing for an Auto Magazine... You write a hell of a persuasive essay.... Either that or I've been reading too many 3rd grade reports...
egomes said: I understand Jim/Clavin... I'm just glad you didn't post this discussion on December 17th of 2001, the day I decided to purchase my Lotus. I've grown to love my Esprit and I too will help out the "cause" however possible. I have both time and money invested in Lotus.
BTW- I'm printing a copy of all discussions on this thread to see if any or all come to fruition... I hope you're wrong on all this Jim.
BTW(2)- Jim... have you ever thought about writing for an Auto Magazine... You write a hell of a persuasive essay.... Either that or I've been reading too many 3rd grade reports...
Ed,
Thank you for your kind words. Admittedly, in this crowd, my observations are bound to be unpopular with many. I submitted them in an attempt to give another viewpoint to the air of denial often expressed when discussing Lotus future. And with Lotus seeking an extension to their DOT exemption, along with all the speculation here about the US Spec Elise and future models, the issue came to light once again. And I agree with you wholeheartedly, in spirit, that I be proven wrong in my conclusions.
I am not trashing Lotus in any way, nor am I even considering selling my car...ever. But, there are some among us who might suffer untold hardship should they fail to see what is very possibly written on the wall.
I would not discourage anyone from purchasing a Lotus, either new or used as we know how incredible these cars are. If Lotus went away, that would not make the existing cars any less special or fun to drive. Perhaps in the absence of any new models, they may be even more so.
As far as your critique of my writing, your comments are much appreciated. I would love to write professionally, especially in the automotive field. In fact, last year, while seeking a career change, I was a finalist for a position as Editor with MotorBooks International Inc.. After eliminating 36 other candidates, leaving just one other, he was offered the position over me. It was disappointing, but I took satisfaction in getting even that far as a candidate considering I was the only one without a Journalism degree. If you have any pull with any publications, I wouldn't mind a recommendation at all. It's also gratifying that you find that my work stands above the third grade level... I must have paid more attention than I thought...lol...Jim '85TE
Ed,
All the assumtions and opinons so far are made based public material. There is logic based thought behind Jim's thoughts. We the Lotus owners do not really figure in to the equation unless you want to make yourself feel better by doing whatever than just standing by and watching. We are not privy to boardroom discussions, deals, and financing arragnements. We don't know assurances, conditions of operations, or the moral integerty of the persons making those deals. One can read and learn all the theories about the biz. But unless you've done it and I mean be someone of authority in the auto biz or know how the controlling people will react, all the quotations, laws of business, etc. spouted about can not be taken too seriously except one can say is they better sell some cars. One thing too, there are many motives other than profit. Asians think different than western cultures. They like the best of brand names, esp. what western people covet. They like to own things. It makes them feel better after being treated like 2nd and 3rd class citizens of the world. That's why they work so had is because they have to 2-3 times better than anyone. They laugh and are proud when they take market share or buy an icon of the west. Proton is a state controlled entity, Malaysia is not the most relaxed place in world. There is penalty for failure, they might not execute you for failure but I would suspect it would be bad. Chapman great car builder but not what I would call a wiz at biz. He hated the auto biz and would have been content with his race team. Oh he had charisma and pulled Lotus from the brink but maybe it was luck, we really don't know other than what we read, have been told by someone, or by what they want us to hear via press release, unless someone was in the room. There are many cases of going against convention and coming through, thats why they are called innovator and are rare. Follow the conventional biz rules and you will be okay and do fine. But a lot of people know the rules and one will be average or one of the crowd if you follow the formula. Do something not many people can do or against the odds and they are genius, the prodigy. So both sides can spout theories, figures, and quotations. But in the end if one really wants to know how the story might turn out. Find out who is calling the shots, what they are like, and what has this person done in the past? If the timing is right and the person is right he can save Lotus. So that being said lets go back to something we have personally done and experienced like fixing and working on our cars. This is a great place for chatting about working Esprit's. The Turbo esprit list is great place for chatting on subjects like this as here are more people there that will chime in on something like this. See ya on Sat. for the club party. Shall we take a chance and drive our cars?
Calvin
All the assumtions and opinons so far are made based public material. There is logic based thought behind Jim's thoughts. We the Lotus owners do not really figure in to the equation unless you want to make yourself feel better by doing whatever than just standing by and watching. We are not privy to boardroom discussions, deals, and financing arragnements. We don't know assurances, conditions of operations, or the moral integerty of the persons making those deals. One can read and learn all the theories about the biz. But unless you've done it and I mean be someone of authority in the auto biz or know how the controlling people will react, all the quotations, laws of business, etc. spouted about can not be taken too seriously except one can say is they better sell some cars. One thing too, there are many motives other than profit. Asians think different than western cultures. They like the best of brand names, esp. what western people covet. They like to own things. It makes them feel better after being treated like 2nd and 3rd class citizens of the world. That's why they work so had is because they have to 2-3 times better than anyone. They laugh and are proud when they take market share or buy an icon of the west. Proton is a state controlled entity, Malaysia is not the most relaxed place in world. There is penalty for failure, they might not execute you for failure but I would suspect it would be bad. Chapman great car builder but not what I would call a wiz at biz. He hated the auto biz and would have been content with his race team. Oh he had charisma and pulled Lotus from the brink but maybe it was luck, we really don't know other than what we read, have been told by someone, or by what they want us to hear via press release, unless someone was in the room. There are many cases of going against convention and coming through, thats why they are called innovator and are rare. Follow the conventional biz rules and you will be okay and do fine. But a lot of people know the rules and one will be average or one of the crowd if you follow the formula. Do something not many people can do or against the odds and they are genius, the prodigy. So both sides can spout theories, figures, and quotations. But in the end if one really wants to know how the story might turn out. Find out who is calling the shots, what they are like, and what has this person done in the past? If the timing is right and the person is right he can save Lotus. So that being said lets go back to something we have personally done and experienced like fixing and working on our cars. This is a great place for chatting about working Esprit's. The Turbo esprit list is great place for chatting on subjects like this as here are more people there that will chime in on something like this. See ya on Sat. for the club party. Shall we take a chance and drive our cars?
Calvin
"We are not privy to boardroom discussions, deals, and financing arragnements. We don't know assurances, conditions of operations, or the moral integerty of the persons making those deals."
True, and well said...BUT...what if we all pitched in a purchased some stock in the company. Would we be privy to any boardroom discussions?? I'll put in $50.
Jim- I meant no offence by the "3rd Grade Report" comment... It's just that I had finished helping a 3rd grade teacher yesterday on calibrating her student's Report of Information papers. I wish I could help you with getting into the auto magazine industry but as a school Vice Principal, there is little I can do.
BTW- What do you think about posting your initial discussion on the turboesprit list like Calvin mentioned? I'm VERY interested in how some LotusUSA people think about all this...
Ed-
True, and well said...BUT...what if we all pitched in a purchased some stock in the company. Would we be privy to any boardroom discussions?? I'll put in $50.
Jim- I meant no offence by the "3rd Grade Report" comment... It's just that I had finished helping a 3rd grade teacher yesterday on calibrating her student's Report of Information papers. I wish I could help you with getting into the auto magazine industry but as a school Vice Principal, there is little I can do.
BTW- What do you think about posting your initial discussion on the turboesprit list like Calvin mentioned? I'm VERY interested in how some LotusUSA people think about all this...
Ed-
egomes said:
BTW- What do you think about posting your initial discussion on the turboesprit list like Calvin mentioned? I'm VERY interested in how some LotusUSA people think about all this...
Ed-
Ed,
Frankly, I'd rather not send this discussion to the other list. I am not seeking either confirmation or denial of my observations, which is exactly what they are.
Additionally, after seeing the 'Rose Colored Glases' view most Esprit owners choose to believe on this topic, it seems like a waste of bandwidth.
And, I expect LCU guys to voice a 180° take on my observations. After the 'Delayed Elise Release Announcement' fiasco at LOG22 this past September, it became apparent just how much these guys are either kept in the dark, or how deep their heads are buried in the sand.
For those who did not attend, there was a very uncomfortable looking Arnie Johnson (Pres. of LCU), just prior to his announcement of the delay, until 2004, for a limited number of Elise's, which bye the way, was very short and terse. It was as if he'd only first heard the news moments before. Which, by all appearances, seemed to be the case. Remember, it's gonna be really tough for these guys to justify their existence for the next 2 years without a single unit to sell in the world's largest car market - the first time in their history. And, these guys don't work for peanuts.
Upon reflection, while I stand by what I've said here, perhaps an open forum was not the best place to elucidate such conversation. I don't want some news item to pick it up and further the speculation. In other words, I do not want the discussion to become a self-fulfilling prophecy.
On the other hand, read over carefully what I've stated and use this information to pose questions of your own if you wish. Just examine the answer you're given carefully. Pay as much attention to 'how' they are answered as you would to the actual content of the answer. That in itself could be very revealing. And take anything LCU says with some suspicion (Btw, what's your confidence level that Clyde or John are privy to the inner circle? Or Arnie for that matter).
Remember, they actually have a stake in this, and may try to manipulate the outcome. Not because they are bad guys, but because it's their job , as well as being in their best interest to do so. Thanks for understanding my wishes on this...Jim '85TE
>> Edited by lotusguy on Saturday 7th December 21:10
>> Edited by lotusguy on Sunday 8th December 03:27
We all now the elise is coming! That is not even a question any more. Unless something seriously goes wrong at lotus.
Lotus is slow to do anything ex V8. I do not think lotus went to all that trouble to build the v8 And then sideline it.
The esprit is getting old, and even thow the body is time less it is time for a new car to take it's place. Who the hell nows what it will be, but I am sure lotus will bring out something very cool.
So do not worry on what they are going to do!
Guy
Lotus is slow to do anything ex V8. I do not think lotus went to all that trouble to build the v8 And then sideline it.
The esprit is getting old, and even thow the body is time less it is time for a new car to take it's place. Who the hell nows what it will be, but I am sure lotus will bring out something very cool.
So do not worry on what they are going to do!
Guy
GUY JOHNSON said: We all now the elise is coming! That is not even a question any more. Unless something seriously goes wrong at lotus...
Guy
Guy,
Your loyalty is great, but just a point, the Elise was initially supposed to be on US dealer showrooms in 1998, then 2000, then 2003 and now 2004. Forgive me if I don't share the same opitimism as you do.
I worked the Lotus display booth of a 'euro' spec Elise at this year's Auto Show, even got to drive it. We took 9 deposits on the car right there at the show for 2003 delivery because that was what Lotus told us. I bet half the people took their deposits back after this most recent delay. If it ever gets over here, it will be a near 10 year old design. I might buy one used, but I doubt I'd pay retail for it.
Delays like this demonstrate poor management and seriously dilute the innovativeness of the design. Even the Jaguar X Type is using manufacturing techniques which were once exclusive to Lotus. Sure they handle and yes, the US model will have an up to date engine, but the rest of the car world is slowly catching up. I am particularly interested in GM's new MSRC (Magnetic Selective Ride Control) which is available on the 2003 C5 Corvette as an option for only $1,695. This valveless damper or shock, literally adjusts each corner of the car in 1 millisecond (it takes 20 milliseconds to blink) meaning the car literally adjusts instantly to road conditions. This is a quantum leap in suspension systems and allows the car to well exceed the magical 1g. on the skidpad. While I don't want a Corvette, other manufacturers are sure to follow suit in short order. Without getting too deep into the technical stuff, this is such an improvement as to make the suspension dynamics that Lotus is famous for seem archaic.
We can make all the excuses we want, but if Lotus doesn't get back in the game, they are going to get left behind. It hasn't happened yet, but the gap closes every year. Even the Audi AS6 boasts performance numbers near equal to the Esprit V8 and it's a sedan!...Jim '85TE
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