Lotus' U.S. chief departs on eve of Elise's arrival after rejecting demotion
By DALE JEWETT | Automotive News
Lotus Holdings CEO Duke Hale, left, asked Lotus Cars CEO Arnie Johnson, center, to become executive director of service and parts. Instead, Johnson left the company. The two are shown with Tony Shute, right, head of product for Lotus Cars, at the press p Arnie Johnson, whom enthusiasts consider the soul of Lotus in the United States, is out as CEO of Lotus Cars U.S.A. Inc. after 33 years at the company.
John English, 59, who was Mazda North American Operations' regional general manager for the Southeast region until last September, replaced him on April 30.
The change comes just as Lotus prepares for a huge increase in its U.S. sales with the arrival of the Elise two-seater in July. Lotus expects to sell about 2,000 Elises a year, and its 41 U.S. dealers already have taken more than 2,000 deposits from buyers.
Duke Hale, 53, CEO of Lotus Holdings Inc., made the change. Hale, a former COO of American Isuzu Motors Inc., joined Lotus in January. He oversees the automaker's engineering and sales activities in North America. Lotus headquarters is in England.
Hale says Lotus needs to move to a "higher level" of structure and dealer support with the Elise's arrival.
Johnson was asked to become Lotus Cars' executive director of service and parts, "to use his base of expertise and continue to be a valuable asset to us," Hale says. But Johnson chose to leave the company.
"Arnie was well liked internally and by a lot of the dealers," Hale says.
Lotus enthusiasts on Internet message boards decried Johnson's leaving. Some writers urged buyers to cancel their Elise deposits.
Johnson could not be contacted.
Bill Nuccio, president of Fox Valley Motorcars of West Chicago, Ill., says Johnson will be missed.
"This guy was committed to the retail customer," says Nuccio, whose dealership has taken more than 200 deposits for the Elise. "When a customer called with a problem, he picked up the phone. At the Elise dealer launch program, he was treated like a god by the dealers and the factory people."
That bond with customers made Johnson a legend within the Lotus community.
He joined Lotus in 1971 as a U.S. distributor and became renowned for his support of racing the cars and technical knowledge. Even as Lotus changed hands several times - including ownership by General Motors, Bugatti and, currently, Malaysian automaker Proton - Johnson remained. At times, he was one of only a handful of U.S. employees.
He became president of Lotus Cars U.S.A. in 1997 and added the CEO title in 1998.
Hale says it is important for Lotus to build its infrastructure to handle and capitalize on its sales growth. He cited English's experience working with Chrysler Corp., Volvo Cars of North America Inc. and Mazda in the areas of service and parts and dealer development.
Hale and English both worked for Volvo in the 1980s and Mazda in the early and mid-1990s.
"We need to elevate the Lotus brand and the profitability of the dealers," Hale says.
The focus on building profit areas such as service contracts and accessories is important because Lotus needs to prepare for when the initial rush of Elise sales passes.
"The real test will be in years two and three of the Elise," English said. "We can't get to second base until we round first base."
But Lotus' focus will remain on dealer profitability, not growing sales by expanding the dealer base rapidly, English said. That was a valuable lesson learned while expanding Volvo in the United States, English and Hale say.
English says he expects to sign a vendor for "high-end" service contracts within two weeks. Dealers have been asked to install new signs in their dealerships and prepare to sell apparel and accessories. English wants it all ready when the first Elises arrive in July.