Yesterday’s news of redundancies at CTI (Caterham Technology and Innovation) sends out worrying signals about the Caterham Group.
On the face of it, losing 18 people from a people-centric business might appear to be a simple housekeeping fix, but when you consider the number that have already left (of their own volition), it amounts to roughly one third of the payroll.
When CTI was established in 2011, we were told that it would produce “accessible and affordable sports cars inspired by the lightweight, minimalist philosophy of the Seven.” The only (complete) offering to date has been the AeroSeven, but with development of this shelved*, it’s little wonder that Chairman Tony Fernandes and Caterham Group CEO Graham MacDonald felt the need to wield the axe on an operation that incurred up to £10 million per annum to run.
But this isn’t the real story behind CTI. Many of the developments we’ve seen on Caterham’s cars during the last few years were due to the hard work of CTI.
The Seven 165 and 485 both had life breathed into them by Hingham. CTI were instrumental in developing the new EU5 powertrains, which helped secure much-needed export revenues to offset further costs. In fact not only did they achieve EU5 compliance, but it was rumoured that straight out of the box they reached the soon-to-be-introduced EU6 standard, a task which many larger car makers have yet to achieve.
If true, Caterham are fortunate indeed, because by downsizing CTI’s powertrain team they now look vulnerable should any issues arise during testing for EU6 compliance. And yet it also raises very clear questions about Caterham’s capacity to develop current and future models.
Earlier this week, Renault announced it had “increased its stake in Société des Automobiles Alpine Caterham to 100%”, buying out the interest held by Caterham Group and bringing an end to the partnership they both signed in November 2012. Both companies envisage other forms of cooperation in future, but Renault will now pursue the Alpine project independently while Caterham have said they will continue with development of their own sports car (although we understand nobody at Hingham is working on the project).
Clearly the challenge is greater with a smaller development team, without a major parts-sharing partner and without an experienced distribution and dealer network, but Fernandes always said this was part of a long-term plan, so one can only hope the expertise lost from CTI will find its way directly back into the programme to develop their future cars.
A little over a week ago, Fernades said (in response to rumours that Caterham Group was for sale);
READ MORE: Caterham respond to sale rumours
I’m not so sure. Looking from the outside they’d need to acquire a ready-to-go project (such as Artega), and even then they may have to outsource powertrain and other key engineering roles in order to meet those all-important emission standards. Without the backing of a known brand like Renault, they’ll also be competing against the likes of the Alfa 4C and Porsche Cayman, where their lack of provenance is plain for all to see.
These are tough times for Caterham and we’re eager to see if Fernandes remains as committed to its future as his words imply. Meanwhile, Ansar Ali and Mark Edwards at Zenos may well be thanking the day that he tore-up their plans and set them free.
* We understand that development of the AeroSeven Concept has now been shelved indefinitely. A prototype version with gull-wing doors and a closed roof had been developed, but noise vibration and harshness (NVH) issues made production unfeasible despite attempts to isolate the problem with better engine mounts.