Lots of turmoil, usually serious

Chris Sawyer, Executive Editor of US-based website Cars In Context, reflects on his time as Communications Director of Lotus Cars USA Inc.

Proton Satria GTI

Proton Satria GTi: Chris Sawyer says the original version lasted for just three laps of Hethel...

Through long-term friendships with Lotus personnel, many stretching back over 20 years, and my time as the Communications Director of Lotus Cars USA Inc. (LCU) – a position that was the main focus of my employment at a Detroit-based PR agency, I received regular reports about the goings on in Hethel during the Proton-Lotus courtship and early years of the marriage. Here are a few of the highlights:

  • Romano Artioli reportedly paid General Motors $40 million for Lotus, but Lotus Engineering received $40 million in engineering contracts from the nearly bankrupt automaker to take Lotus off its hands.
  • Artioli deftly played Daewoo against Proton in an attempt to get the highest possible sale price for Lotus. The amount he ultimately received from Proton for an 80% holding was many times the asset value of a company that was technically bankrupt.
  • Daewoo didn’t want Atlanta, Gerogia-based Lotus Cars USA, so Artioli sold it to LCU CEO James G. Selwa for a rumored £1.00 to seal the deal. (It may have been more.) Daewoo had no use for a US sales arm as it was in the process of creating its own ground-up sales and distribution organization. Selwa, seeing a prime opportunity, jumped at the deal.
  • Proton, which talked of selling its cars in the US, didn’t have a sales organization in-country, and bought LCU back from Selwa for many times what he paid once the company had bought Lotus.
  • Had it acted on pleas from its British management, Honda might have bought Lotus outright. The company was impressed with the work done on a British-built variant of the Civic and was interested in expanding its sports car reach in light of its involvement in F1. Honda’s management in Japan never responded to the British managers’ pleas.
  • Proton’s late CEO Yahaya Ahmad reportedly flipped an Esprit on the Lotus test track after the signing ceremony, earning himself the nickname “Flipper” at LCU.
  • Malaysian dignitaries and company executives were stunned to discover that the paperwork turning Lotus over to Proton did not include Team Lotus.  One witness described the scene: “Some were ashen-faced, others red as beets.” Some Malaysians also expected to own Classic Team Lotus as part of the deal – so much for due diligence.
  • Proton brought a number of its Mitsubishi Colt-based hatchbacks to the celebration and these were run on the Lotus test track. Reportedly, most of the cars’ front wheel bearings gave up after three laps.
  • Lotus race car drive Doc Bundy was able to get the Elise an appearance on Baywatch. The plot had a rich businessman helped/rescued by Pam Anderson. As a token of his thanks, the businessman would give her an Elise. With no commitment from the UK to sell the Elise Stateside, the idea floated off to sea.
  • During the initial development of the Elise GT (a Ferrari Dino-like closed coupe version of the Elise), Lotus was looking for an engine other than the KV6 to power the car in order to make US sales easier. Through personal contacts, I helped source the 250bhp Ford SVT Contour (Mondeo) 2.5-litre V6 and five-speed transaxle. Incoming CEO Chris Knight cancelled the project as being too expensive and too dissimilar to the standard Elise.
  • The M250 took the Elise GT’s place and was to be powered by a Lotus-modified Renault V6 with 250bhp. Initial development costs for the M250 were pegged at £60 million, far greater than the $7 million needed to take the Elise S1 from an idea and into production. Group Lotus made just £65 million that year.
  • Over the course of a month, four Senior Engineers at Lotus whittled the cost of the M250 below £20 million, with more to come. However, bickering with Renault over payment for modifications to its V6 engine (Lotus was to receive the engine for free in return for engineering the tweaks) killed the deal.
  • At various times, LCU was to receive the K-Series Elise, a KV6-powered Elise or a Lotus-badged and bodied version of the Vauxhall VX220 with a GM turbo motor. Management dithering meant none ever made it past the talking stage.
  • Lotus Engineer and Director Roger Becker became so frustrated with the roadblocks preventing production of a Federal Elise that he investigated a number of alternatives.
  • One option reportedly involved building Dodge Neon SRT-powered drag car kits to be sold through So-Cal Speed Shops. This would establish Elise production in the US and pave the way for a US-built Elise built in partnership with a third party. This would reduce Lotus’ exposure at a time when it was considering pulling out of the US market.
  • Concurrently, Lotus bought MARCO Engineering in Ann Arbor, Michigan. (It’s now known as Lotus Engineering, Inc.) In addition to its work testing and developing engines for the American car companies, Harley-Davidson, and small engine manufacturers, MARCO had enough extra room to build the Elise in CKD form. Worries that the United Auto Workers would want to represent the Lotus workers, as well as more dithering from Hethel, killed this idea.
  • Later on, Becker used his personal relationship with top Toyota managers to procure the 2ZZ-GE inline four. The agreement did not include the Denso engine control unit, which would have cost Lotus more than it could afford.
  • In order to save the project, Becker had new LCU CEO Arnie Johnson buy a Toyota Celica GT and ship it back to Hethel. A new Lotus-designed ECU – which eliminated the torque spike Denso and Toyota said could not be controlled by the engine electronics – was produced in two weeks. The engine was placed in an old Elise S1 test hack for presentation to the same Lotus management who had not been consulted about buying the Toyota. Unsurprisingly, the programme was soon approved after that.

These are just some of the things I saw and heard while trying to keep Lotus relevant to a jaded press community, which was tired of trying to find something else other than the over 20 year-old Esprit to write, and working against the near-constant threat that Lotus would leave the American market.

Despite all of the maddening decisions, or lack thereof, made during this time, I can say Tony Rudd had it right when he called his autobiography It Was Fun! However, if I ever write a book about my time at LCU, I may use the title suggested by Andrew Walmsley, a former Director at Lotus: Casualties of a Previous Summer. Somehow, that seems more appropriate…

Posted in: AROnline Blogs, Lotus
Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

3 Comments on "Lots of turmoil, usually serious"

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  1. Andrew Elphick says:

    I love the scandal of the reverse-engineered Toyota ECUs. Did the KIA Elan cast-off ever figure in the North American market?

  2. Simon Woodward says:

    I heard a rumour that, after the Lotus Carlton, there were meant to be Lotus versions of the Calibra and Tigra or is that just a red herring?

  3. Chris Sawyer says:

    I apologise if I suggested that the ECUs were reverse-engineered Denso units. They were not. Lotus could not afford the time (about 18 months) and money (unknown) Denso quoted to supply a bespoke ECU for the Elise and, in addition, both Toyota and Denso claimed the ECU could not be made to control the massive increase in power and torque that arrived when the variable cam timing hit its stride around 6,200 rpm.

    Lotus therefore struck out on its own, creating a new ECU that could control the power output more effectively. It was ready in two weeks, not 18 months. When the Toyota delegation arrived in Hethel to see how things were going (they had been on a fact-finding tour of Europe), the Celica’s Chief Engineer was amazed to discover just how more controllable the Toyota motor was with the Lotus ECU. He drove the Celica with the Lotus ECU as the powertrain hadn’t been moved to the S1 Elise test hack at that point.

    Maybe one day I or another will write about the electronics capability Lotus acquired with Romano Artioli’s takeover of the company. I have been told that the Lotus ECU is capable of running engines of more than 12 cylinders when fully enabled and the folks here in the U.S. have used it on some pretty diverse engines when nothing else would do the trick.

    The Kia Elan never made it to North America. Probably a good thing, too… The M100 cost about $40,000 when it debuted, far above the price of a Miata, and had an Isuzu motor in it. It would not have fared well with a Kia engine. The car was also overly complex and it was known inside Lotus that it could not be built economically. However, the project was so far down the road by that time that it could not be cancelled. GM would have thrown a fit…

    One day I, or someone with more information, will tell the story of GM’s ownership of Lotus. The barricades put in place by GM to prevent it from “contaminating” Lotus meant it was never used to its full potential.

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