British car manufacturing company Lotus may be transferring its production commercial property base to China. The Malaysian-owned company currently manufactures all of its cars at an industrial property in Hethel, Norfolk, and employs around 1,400 workers.
Sixteen years ago, Lotus was sold to Malaysian firm Proton, which gave it a much-needed revival and made Lotus a prominent name in the car industry once more. Then, earlier this year, conglomerate DRB-Hicom, who own a portfolio of industrial commercial properties in Malaysia, took over the brand and was expected to inject £500 million into the car company’s expansion.
However, it now appears that DRB-Hicom has little to no interest in manufacturing Lotus cars, and instead informed the British Parliament that it had appointed City firm KPMG with the view to finding a potential Chinese buyer. Rumours that the company are keen for a Chinese commercial property company to buy Group Lotus were further fuelled by the launch of a new model specifically for the Chinese market.
Richard Bacon, Conservative MP for South Norfolk, was granted a Commons debate on the subject when he raised concerns in Parliament about the potential loss of 1,400 jobs in his constituency should the Hethel commercial property close. He said; “The fact that KPMG has been appointed with a mandate to sell Group Lotus to the Chinese is not an encouraging sign.”
Perhaps part of the reason for the controversial sell-off being considered is the position of Lotus chief executive Dany Bahar. He has a pay packet and bonus scheme worth an estimated £1.2 million – yet also has a contract which was extended in December, and includes a lucrative bonus clause, rumoured to be worth several million, which he can claim in the event of a sell-off. MPs were told that this aspect makes him “incentivised to sell Lotus”.
Reacting to this theory, Lotus released a statement saying; “Dany Bahar remains totally committed to Lotus. His overriding priority is securing the future of the company and protecting its employees.”
Should Lotus remain in the UK, a grant worth £10 million will be available to the group from the British government, on the condition that the £500 million expansion plan was put into action. This would allow the Hethel commercial property plant to be modernised significantly over a five-year period, and would additionally create over 1,000 jobs in the area.
Business Minister Mark Prisk is adamant that Lotus manufacturing commercial properties “must remain in Britain.” He said; “Ministers at the very highest level are taking this matter very seriously.
“We are working to make sure the new owners understand Norfolk is the home of Lotus.”
Norfolk Council leader Derrick Murphy added; “It is important we continue to press the case for the company as so many livelihoods depend on Lotus being based here in Norfolk.”
Do you think Group Lotus should be transferred to the Far East, potentially lowering manufacturing costs and making the business secure in a time of economic uncertainty? Or do you think DRB-Hicom should honour their plans to expand the Hethel commercial property and create jobs for British people, even if this puts the company at risk?
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