DRB-Hicom boss gives pledge to business secretary Vince Cable to keep Lotus production in Norfolk
The campaign to keep Lotus cars in Norfolk received a massive boost today after new Malaysian owners DRB-Hicom pledged to business secretary Vince Cable that they will look to keep production in the county.
Ministers have been keeping a close eye on the fate of the company since DRB bought Lotus's parent Proton in January and triggered a review of the business operation.
That review, which is due to be completed shortly, fuelled rumours that the car maker could be sold to a Chinese buyer and production shipped overseas potentially putting at risk 1,200 Norfolk-based jobs at Lotus's Hethel HQ and hundreds more in the wider manufacturing economy.
But in a further boost, it has also emerged that the car maker has stepped up production at Hethel, after DRB-Hicom began to turn back on the funding tap, and is now producing 46 cars a week.
Pressure mounted on DRB to show its hand, with South Norfolk MP joining forces with the EDP to spearhead a 'Keep Lotus in Norfolk' campaign, while prime minister David Cameron also raised the issue with his Malaysian counterpart.
Last week Hicom's group managing director Dato' Sri Haji Mohd Khamil Bin Jamil flew into the UK for the talks with Dr Cable insisting he would seek a 'win-win' solution for the company's 1,200 staff and the wider community when deciding the future of the car maker.
Details of those talks have now been released in a letter to Norfolk MPs, including Mr Bacon revealing that DRB stressed to the UK government that their primary objective was to see if they could keep Lotus as a viable concern in the first instance, but if they did look to sell then they would secure a deal in which production stayed in this county.
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'I emphasised the importance of Lotus to the Norfolk economy and its valuable contribution to the wider UK automotive industry,' Dr Cable wrote. 'He confirmed to me that DRB-Hicom hand not taken any decisions to sell Lotus, and he had put a stop to activity in this direction under the previous owners.
'His desire was for Lotus to be a viable part of the DRB-Hicom Group. But if a sale was considered the best commercial course of action, he gave an undertaking that as part of the terms, any new owner would be required to retain Lotus in Norfolk.'
The DRB pledge is sure to be welcomed among the wider business community and policymakers, fearful of the devastating hole which could be blown in the county's economy if Lotus went overseas.
Dr Cable also stressed to DRB that the government was ready to re-activate a �10m pledge from its regional growth fund to support plans to develop four new models and create 1,000 new jobs at Hethel, which had been put on hold until the future of the company was determined.
Mr Bacon welcomed the pledge as a further encouraging sign for the campaign, though he cautioned against taking the foot off the pedal until Lotus's future was guaranteed.
'The company has gone through a period of instability which has been a source of considerable anxiety for the employees,' he said. 'My main concern is to secure their long term future and anything that points in that direction has to be welcome.'
However, while the mood music coming from Malaysia regarding Lotus sounds increasingly positive, there are still likely to be questions about how such an assurance can be legally enforced if the business were sold.
But in a further encouraging sign for Lotus, the car maker revealed that it has returned to its target of producing 46 cars a week. Production never stopped, but up until the end of March it was running at a vastly reduced rate with some staff 'banking hours' at home or switched to other duties.
The company said that since April it has been ramping up production and reached the 46 unit target from the start of May.
The cars being built are a mix of Evora and Elise, the company said while production of the Exige S, which has already won plaudits in the motor industry press, starting in summer.
However, while positive the upturn is far from business as usual and the company stressed it was doing its best within the limited resources available and was concentrating on its core business of manufacturing sports cars.
A Lotus spokesman said: 'It is, of course great news for the whole of Lotus that production is back to normal and we are now working hard to satisfy the global order book of around 1200 cars.'