Ministers 'must Protect Auto Industry'

[Mark H]

Ministers must ensure the auto industry's supply chain - and car dealers - can survive production cuts and uncertainty surrounding the major carmakers, the chief executive of Group Lotus warned last night.

 

Lotus is among the auto firms left pondering the impact on its business of General Motors' (GM) move into bankruptcy protection in the United States earlier this week.

 

The Norfolk carmarker is both a supplier and a customer of GM - buying GM engines for the Lotus Europa and supplying engineering consultancy to the American car giant around the world.

 

Last night, Group Lotus chief executive Mike Kimberley urged the government to act if other companies in the wider supply chain need financial aid.

 

Mr Kimberley revealed that 11 Lotus suppliers had collapsed in recent months - obliging the firm to find alternatives at additional cost in both time and money.

 

"The biggest problem facing the industry at the moment is the impact on suppliers," Mr Kimberley said.

 

"A lot of them are already having a tough time - most of the big car companies have already cut back. Lotus is unique in that we're building 52pc more cars in this year than in the previous financial year, although the volumes we're talking about are relatively small compared to the big companies.

 

"We're recruiting - we've already taken on 57 staff in manufacturing and there's another 100 to go, but we're only going to recruit them when we see the cars start to flow. The new Evora has been incredibly well received - some industry commentators are describing it as the best car Lotus has ever made.

 

"In normal times, I'd be pulling on the arm of a slot machine and hearing the chink of the sales coming through.

 

"But we're in different times. Our order bank is strong - with forward orders throughout the world which will take us through to the end of the year.

 

"But to date, since we started building the production cars, we've had 11 tier one suppliers go bankrupt, or into liquidation or receivership.

 

"That's damaging. When that happens, in some cases you have to re-engineer the parts and re-test them and anything that's powertrain or emissions-related - whether in Europe or the US - has to go through durability tests and meet very stringent standards.

 

"So for every supplier you lose, you have to go through a major reinvestment and test campaign in engineering to certify it.

 

"That's my biggest worry with GM and Opel.

 

"I sincerely hope that the government is awake and alert enough in Britain to support the suppliers that work with Vauxhall - and the dealers - to see if they need help. It's a known fact that some of them really do."

 

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