Tony Fernandes announced, as expected, that he has reached agreement with David Hunt and is now the owner of the Team Lotus name and the celebrated CABC logo. Fernandes says that the team will be known next year as Team Lotus. He did not announce an engine deal for 2011, nor did he announce drivers. The team will still be based in Hingham, will still race in green and yellow and will still employ Mike Gascoyne. The Chapman Family is supporting the agreement.
When asked about Group Lotus trying to get involved in single-seater racing in Europe, Fernandes used some very specific legal terms: notably “goodwill” and “passing off”, which indicated that this is a matter that has clearly been discussed with his legal consultants. The term “goodwill” applies to a value that a business has resulting from a good reputation and past endeavours in a certain field. The act of “passing off” is what is called a tort (a damaging act) and the injured party may sue the wrongdoer for damages. The law is designed to prevent misrepresentation and to protect the goodwill of a company. This is in addition to any registered trademarks, which are protected by the United Kingdom Trade Marks Act 1994.
A Group Lotus press release on Wednesday used the CABC green and yellow badge and claimed that the company had achieved “seven F1 Constructers Championships, six F1 Driver Championships and numerous other considerable accolades”. This is true of Team Lotus, but not Group Lotus.
The main operating subsidiary of Group Lotus plc is Lotus Cars Ltd, which has two operating divisions – Lotus Engineering and Lotus Cars. Lotus Engineering is an automotive engineering consultancy based in Norfolk; Lotus Cars builds production road cars.
It is clear that there is trouble between Lotus Racing and Group Lotus, as I reported a couple of days ago, and it looks like Group Lotus has some idea that it can get into racing, elbowing Team Lotus out of the way. This is not a good idea. Group Lotus is owned by Proton, which is owned by the Malaysian government. This mighjt seem to suggest that Group Lotus has major political support, but Fernandes is very well-connected in Kuala Lumpur, a fact underlined by the appearance of Dr Mahathir Mohamad, the country’s ex-prime minister, at the opening of the Lotus F1 factory in February. He ran the country from 1981 until 2003 and still plays a major role behind-the-scenes role in Malaysian politics. He led the push to remove Abdullah Ahmad Badawi, his successor, in April 2009 and supported Najib Razak as the new premier. Tony Fernandes is close to Mahathir, having impressed the ex-PM by acquiring the near-bankrupt Air Asia in 2001 for one ringgit and turning it into one of the world’s most successful low-cost airlines.
Trying to take on Fernandes might be considered foolhardy given his connections, as the management of Group Lotus still needs to prove that it knows what it is doing. The chief executive Dany Bahar is a newcomer to the production car business. Lotus has never made much money and Bahar hopes to change that with a new range of road cars that will be launched at the forthcoming Paris Salon. The success of these models will probably decide Bahar’s fate as an automobile industry executive. However, it might be wise not to rock the boat in the motorsport world, particularly if your ultimate bosses are friends of Tony Fernandes.