Up to 99 jobs could be lost at Lotus

Up to 99 Norfolk jobs could be lost as sports car manufacturer Lotus looks to slash staff levels at its Hethel factory to cut costs.

Employees have been informed that their roles could be at risk as Lotus Cars launched a consultation period for the planned cuts. The total number of jobs lost could be as high as 99, though this figure could be reduced as the process continues.

By June 17 the company hopes to have identified the exact number of employees affected and which areas of the business they will be taken from. It has invited offers from any staff members who wish to apply for voluntary redundancy. Those applying for voluntary redundancy would leave the company by July 1, while any forced redundancies would take effect the following week.

Chief executive Dany Bahar said in a letter to staff that there was 'a need to reduce headcount in a number of areas of the business'.

The firm conducted an efficiency review which, the letter said, had 'highlighted the need for increased improvement in both cost and productivity'.

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'It is with regret that we have to enter into a redundancy process. However it is imperative that we realise cost savings and efficiency improvements this year to help ensure the success of Group Lotus in the future. 'Whilst we understand that this news will be disturbing to many of you, we ask that you continue to focus on your role within the organisation and delivering to the best of your ability.'

The firm is also conducting a review into working patterns, working hours and terms and conditions of employment.

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Group Lotus is a subsidiary of Malaysian business Proton Holdings, which bought a majority stake in 1996, and is itself a parent company which owns car manufacturer Lotus Cars and Lotus Engineering.

The only area not affected by the current redundancy process is Lotus Engineering, the consultancy arm of Group Lotus, which carries out development work on behalf of companies around the world including other motor manufacturers.

But Mr Bahar goes on to say in his letter that an ongoing review of that part of the business is not complete and that employees in the department 'will be advised of any impact' to them at a later date.

Earlier this year Lotus lost out on �27.5m in funding from the government's Regional Growth Fund, which could have seen it expand its workforce.

The money had been intended to extend its manufacturing operation in Norfolk.

Earlier this year the company claimed the expansion would create 1,000 jobs in Norfolk, but warned that if it failed to secure the cash then the manufacturing facility could be built outside the UK.

But, following that loss, Lotus Cars managed to source �270m from a syndicate of Malaysian and Chinese banks to fund an aggressive expansion campaign involving the launch of five new car models in just five years.

Last week Group Lotus was struck a blow as the High Court ruled that unrelated F1 group Team Lotus could retain their right to use the Norfolk marque in Formula One.

Team Lotus, part-owned by Malaysian entrepreneur Tony Fernandes and not connected to Group Lotus in any way except name, had been fighting Group Lotus in the courts since last year.

Both teams compete using the Lotus name, as Hingham-based Team Lotus having bought the rights from the defunct Team Lotus F1 group which ceased to race in 1994.

Lotus declined to comment on the redundancies yesterday.

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