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China's Geely says it has no plan to buy Fiat Chrysler — as FCA stock leaps

HONG KONG — Chinese carmaker Geely Automobile denied media speculation on Wednesday that it planned to make a takeover bid for Fiat Chryslerk Automobiles (FCA), the world's seventh-largest automaker. Geely was one of several Chinese carmakers cited in by Automotive News, which said representatives of "a well-known Chinese automaker" had made an offer this month for FCA, which has a market value of almost $20 billion. "We don't have such a plan at the moment," Geely executive director Gui Shengyue told reporters at an earnings briefing, when asked if Geely was interested in Fiat. He said a foreign acquisition would be complicated, but he did not elaborate. "But for other (Chinese) brands, it could be a fast track for their development," Gui added. However, a source close to the matter said FCA and Geely Automobile's parent firm, Zhejiang Geely Holding Group, had held initial talks late last year, without disclosing their nature. The source confirmed Geely was no longer interested in FCA, noting that the parent company had only three months ago announced its first push into Southeast Asia with the purchase of 49.9 percent of struggling Malaysian carmaker Proton, a deal that also included a stake in Lotus. Geel's denial failed to dent FCA's stock. The price of its Milan-based shares has jumped more than 10 percent to a 19-year high since Automotive News first reported on Monday, citing unnamed sources, that FCA had rejected the Chinese offer as too low. FCA stock on the New York Stock Exchange rose sharply on Monday from $11.60 to $12.38 and on Wednesday was trading at $12.84. FCA declined to comment on Wednesday. FCA Chief Executive Sergio Marchionne has repeatedly called for mergers as a way of sharing the costs of making cleaner, more advanced cars, but he has repeatedly failed to find a partner and retreated from his search for in April, saying FCA would stick to its business plan. He has also spoken of spinning the successful Jeep and Ram divisions off from FCA. Europe's largest carmaker, Volkswagen, and General Motors have both said they are not interested in talks with FCA. On Wednesday, Geely Automobile reported a doubling of first-half profit, above expectations, as cars designed with Sweden's Volvo won over domestic consumers. Volvo is a unit of the Zhejiang Geely group, and has recently announced it will share its technology with Geely.

Lotus hiring 100 after securing lb100m investment

Lotus is getting a shot in the arm courtesy of corporate parent DRB-Hicom, which has announced a 100-million pound ($152.3M USD at today's rates) investment in the Hethel, UK-based manufacturer. The troubled brand was also in the news last week, with DRB announcing a new, three-year plan that would see variants of existing models introduced.
The money will create 100 new jobs in Hethel, with 45 new engineers, 40 manufacturing operatives and 18 university grads joining the team. Lotus has already seen an uptick in sales this year, according to a Norfolk-based news site, with 40 to 45 cars being produced per week and 722 road cars and 45 race cars sold between January and May. Even sales in the UK have seen a big jump - Lotus only moved 70 units in 2012, but it's already sold 80 cars in the first half of 2013.
Better yet, Lotus is citing an increased demand for its cars around the globe as the motive behind the new hires. While still quite uncertain, Lotus looks like it might finally be on the right track.

Lotus to layoff a quarter of its workforce

Lotus has issued a press release to day, wherein it indicates that a "need to both reshape its organisation and to reduce costs" may result in the loss of "up to 325" jobs. That's a fairly significant number of layoffs for any company, but considering that Lotus currently employs 1,215 people (per the company's bio in the same release), it could mean a full 25-percent of the automaker's workers could soon be sharpening their resumes.
CEO Jean-Marc Gales says in the statement that Lotus has "worked very hard to avoid the need to make this proposal," but admits that it is now "essential" to the future of the company. The chief indicates that post-restructuring, he expects Lotus to be a "leaner" and "more competitive" organization, one which - and we can all see a little silver lining here - is focused on "producing class-leading sports cars and innovative engineering."
The 325-job number appears to be soft at this point, with the statement indicating that some negotiation about which and how many posts will be cut is yet to come. Further, the company may "redeploy" some employees, and may even recruit new blood for "key roles," all with an eye toward running the strongest possible team going forward. Though, we imagine that the recruitment bit won't fly well for those employees getting the sack.