Departing Lotus chief executive urges India and Russia drive
A back injury and a small army of medical consultants have forced Mike Kimberley, chief executive of Norfolk sports car maker and automotive engineering consultancy Group Lotus, into premature retirement – a few weeks shy of his 71st birthday. But even on the way out, he was still charting potential avenues of growth for one of Britain’s premier export successes in an exclusive interview with Tony Quested.
Mike Kimberley was on the first Boeing 707 to fly over Russian territory when the Kremlin opened up the air space over the Urals at the height of the Cold War. While fellow passengers on this historic flight were scouring the skyline for missiles, Mike had only one thing on his radar: “What a vast territory this was. And what an enormous economy it could become.” Half a century on, his initial thoughts have not altered. He wants to see his beloved Group Lotus move in there and grasp an opportunity for growth that he believes could be immense. Having cracked America and broken China, Kimberley has an unshakeable belief that India and Russia should be the locations for the group’s next two technology centres of excellence. “That flight across Russia left an indelible impression on me,” he says. “Everyone was frightened we would be hit by a missile. We flew out of Moscow and went on and on for 10 and a half hours and were still over Russian territory. “It’s a vast expanse of land and represents an enormous opportunity for Lotus. Russia will turn round economically and once it does it can be a powerhouse.” Ever the strategist, Kimberley cites Russia’s soaring GDP – up 8.1 per cent at the last count to the sixth largest in the world at $2.076 trillion. He quotes Russia’s strength as having the world’s largest natural gas reserves, the second largest coal reserves and the eighth largest oil reserves. It is the world’s leading natural gas exporter and the second leading oil exporter. Forget it at your peril but Russia also has brains to burn. It has a long tradition of education, science, and industry and has more higher education graduates than any other country in Europe.
And India will be the next China, Kimberley is convinced. “It has a rich and growing middle class with high disposable income – ideal buyers of Lotus sports cars. And its government is building its 2020 vision on developing a knowledge based economy, fertile territory for Lotus’ engineering innovation.”
Kimberley fought hard the year before last to push through a tech centre for India as a matter of priority but says: “It never happened. Then I brought in a new MD with a more open mind and it’s taken the board seven months to open the doors to the proposal. Lotus has a great proposition to set before the large Indian OEMs.
“These emerging economies represent huge opportunities for Lotus and if the company doesn’t grasp them, then shame on them.”
Kimberley, a 56-year veteran of the motor industry – many of them spent in Asia – says the first step is to build trust and relationships. “I worked hard for three years building trust and relationships in China. Initially we were in the hands of Chinese manufacturers.
“Then, as trust built, we started to work with them, introducing our engineering skills to many different aspects of vehicle production, such as ride handling, iconic valve dynamics, engine efficiency and performance – total vehicle integration.
“We’ve gone through the learning curve and got to know the Chinese market. Now we can use this template in India and elsewhere – new markets where we can grow and maintain the integrity of the Lotus group’s DNA. Lotus has got to be entrepreneurial. If you are risk averse you die.”
Kimberley reckons that if you cut off one of his arms it would bleed yellow and green – Lotus’s corporate colours. Such surgery would appear to be superfluous. Where Lotus is concerned his bleeding heart is already on public display – on his sleeve.
Part of the passion stems from his early years with the group when he worked alongside the legendary automotive pioneer and Lotus founder Colin Chapman.
A brilliant engineer in his own right, Mike joined Lotus from Jaguar in 1969 and rose rapidly through the ranks, joining the board aged 37 and becoming MD of Lotus Cars in 1976 and MD of Lotus Engineering by 1980, being responsible for such Lotus icons as the Esprit, Eclat and Elite.
It was Chapman and Kimberley who set up the world-class Lotus Engineering consultancy to enable Lotus to work for many other car companies around the world.
Kimberley recalls that in 1977, working with Chapman, he spent £6 million design-engineering the Elite and Esprit, developing a state of the art, all aluminium engine – the first one in the world and built to meet new US regulations “that old models wouldn’t have come near, structure or emissions wise.”
He still chuckles and shakes his head at the then astronomical sum of £6m – perhaps remembering how cash-strapped the business often was.
“Looking back, we were clearly in advance of our years – we had a lot of technology and ideas cascading down from F1 technology. But we were not financially irresponsible. We just had this belief that innovation would be the differentiator for Lotus.
“We looked at Porsche, a carmaker at the cutting edge, who kept innovating though tough economic times. No matter how the economy bounced up and down Porsche seemed to manage to soldier on regardless and always pulled through.
“Innovation was the key. We realised the importance of developing our own engineering consultancy at Lotus and nurturing the ability of being able to take an idea from inside your head and develop it into a real product.
“We also knew we had to harness the need for innovation to the ceaseless search for market validity and commercial endorsement.
“Colin and I had a plan of having 25 per cent of our business in each of the major centres of the world – Europe, China, the US and the Rest of the World – so we would spread the risk and maximise the opportunity.”
Colin Chapman’s tragic and untimely death in 1982, rewrote the script. Mike became CEO of Group Lotus plc, as well as holding board positions with a number of Lotus associated companies. It was soon apparent that the thread on the company’s financial ‘tyres’ was down to the wire.
But Mike Kimberley has never been short of friends and allies in the motor industry.
When he asked for help it was generally forthcoming – often from the fiercely loyal Toyota, who helped Lotus out of cashflow problems more than once – and through one particularly tough period from the American Express bank, who at one time financed Chrysler and Lotus.
Through the early 80s’ recession they allowed Lotus to pay off £2m worth of debt at £50k a month. When Lotus ran out of cash at the height of the downturn, Mike was able to jet out to meet the president of Toyota and it took just 30 minutes for the friends to agree a lifeline deal.
Mike recalls: “He asked how much would see us through and I told him. The money was in the bank by the time we got on the jumbo jet to fly home.”
Mike had long since determined to turn Lotus into a hi-tech concern and, sharing the vision, Toyota took a stake and celebrated a step forward for the general good of automotive engineering.
But as Mike was flying back from Japan, news leaked out to the City and a jealous and overzealous stakeholder had gazumped Toyota – unbeknown to Mike – and jumped into the No1 investor slot he had promised Toyota just hours before. Kimberley got straight back on the plane to explain to Toyota what had happened; such was the strength of the relationship, Toyota agreed to step aside to No2 investor slot so the rescue deal wouldn’t be ruined.
Further progress on both the carmaking and engineering sides over the next 20 years couldn’t mask the continued financial struggles of Group Lotus.
Lotus moved under General Motors ownership and Mike became chairman of Group Lotus plc before leaving in 1992 to become executive vice-president (General Motors Overseas Corporation) based in South East Asia.
Two years later, Mike became director of the Vector Aeromotive Corporation, and in 1994, he was named president & managing director of Automobili Lamborghini, responsible for the rebuilding of Lamborghini after Chrysler’s ownership and prior to its sale to Audi AG, as part of the VW Group.
He did such an outstanding job turning Lamborghini round that he was head hunted in the mid-90s to work directly for Tommy Suharto as a board member of Timor Putra Nasional (owners of Lamborghini).
An undiagnosed tropical fever forced him into an early retirement for a few months but Mike returned to the industry as a consultant for several organisations including Tata Motors Ltd.
If Mike thought he was winding down his engine and heading for the garage at home, a seminal moment sent him careering down a familiar track.
In August 2005, he was appointed to the Lotus Group International Limited and Group Lotus plc boards as well as other boards of Malaysia-based Proton – now the new owners – and was named acting CEO in May 2006. Cometh the hour ...
Kimberley recalls: “In May 2006 we hadn’t got £5 cash to our name but we had world class carmaking and engineering capability. And we had a good backer in Proton, committed to pulling us through the bad times so that we could take advantage of a product and skills that were by now in record global demand.
“We introduced a five-year plan – which has now evolved into an eight-year strategy – and slowly but surely exploited our engineering excellence, moving the company from a very significant loss in 2006 to a small profit and a very bright future.
“Together, we have steered Lotus through at a time when the global economic downturn has sunk so many car industry giants.
“And we have transcended mere survival. The group has been recruiting in the last three months. Out of all the car companies in the world, we are probably the only one that is building up and increasing staff and getting in more creative young engineers.
“You need people with a bit of mileage but you also need out-of-the-box thinkers. That’s what Lotus is all about.
“Lotus Cars and our engineering division are working on some incredibly exciting things that you are likely to see emerge in the not too distant future, spanning many areas of cutting edge automotive technology.”
Such a man as Mike Kimberley was always bound to leave the industry a significant legacy. Indeed, there are many strands to the one he bequeaths to the board, shareholders and customers of Lotus.
It’s only a personal hunch but automotive history might best recall and cherish him for overseeing the production of the multi award-winning Evora – the group’s first all new car for 14 years and one that has been compared to the very best of Ferraris, Porsches and Lamborghinis ever made.
It strikes me that from the boot to the bonnet, in all its power and all its glory, this is a physical embodiment of the very spirit of Colin Chapman.