“Our cash position became incredibly tight,” says McLaren Automotive Chief Executive Mike Flewitt.
McLaren CEO: ‘Our cash position became incredibly tight’
- Update Date：
- Post Date：
- Tags
“Our cash position became incredibly tight,” says McLaren Automotive Chief Executive Mike Flewitt.
If you stop making faulty cars and churning them out…
Shut up, fool! Which car manufacturer don’t make faulty cars? Why do you think just about ever can manufacturer has had to make a recall or two? Smh.
Tyran Mathurin why do you have to call him a fool just because you disagree with him? McLaren clearly have an issue with their build quality, it’s not the primary reason they are struggling but it is a factor. No need to be so emotional, just disagree make your point and move on. 🙄
But now you’ll have a big negative on the balance sheet for your rent.
That’s a future problem.
They’ll get a big cash inflow from the sale of the property, and then smaller but regular cash outflows for the rent.
Given they need money right now, it’ll keep the company solvent in the short term. Even if there’s a big risk of that rent liability causing them to eventually collapse in the medium term, that’s still better than where they are today. It buys them time to fix their issues.
There’s also a bunch of tax reasons why you’d want to shift your commercial premises from capital expenditure to operational expenditure on the books (I’m not a tax accountant so I’m not sure what they all are) which is why so many businesses have already shifted to this model.
He talks about how McLaren is one of the few car companies that still own their premises like it’s a good thing, instead of showing how out of touch their leadership team is with managing the company finances.
@ScathingMobile It’s better to be paying taxes as that means you’re making money! What they’ll have with a landlord is still all the same expenses to maintain the building plus a rent. And an extra amount so that the landlord can make a profit (which there isn’t anything wrong with landlords profiting as they’re putting up the cash first).
For a lot of businesses they’re happy having a rental property, especially startups. McLaren’s building is very unique, with a wind tunnel build in to its core, and as such the only future use would be another F1 team. The customer base is small, and if McLaren were to fail the new landlord would be left with a building they couldn’t rent out to anybody other than another McLaren.
The buyer is effectively betting on the future of McLaren!
As such, any rental amount would also have to add a bit extra for that risk. Any future owner would have to think carefully about owning that building when it only has one type of customer. Unless McLaren already have someone willing to put up the cash and this is a innovative way to guarantee the “loan” without it being a loan!
That’s because too many people like me cancel our orders
Which model did you order (if i can ask) ?
cause u broke bruh
Buying car is one thing, keeping it running is another. Service and spare parts are terrible.
How did he become CEO? Option to rent indefinitely doesn’t sound good especially if you plan to be building cars well into the future or is this the end of McLaren road cars?
Because Ron Dennis left😜
Sooo… guessing this means McLaren SUV is on the way
This guy is so deluded,return to the successful business model of 2018-2019. It was those years and other years that got them where they are now
They have just sold the last remaining assets they own and have debts up to their eye balls with the same unreliable overpriced car offering
Circa £400k for a specked up 765LT is a joke,that car needs to be late 200’s with all the toys on it
They will rip through the cash from the sale in no time snd now have an additional huge debt,the monthly lease payment on the facility
No idea of how to run a business
Maybe we wouldn’t have debt on the balance sheet if we actually made cars people want to own. Who wants to own a GT, 570GT, and the new electric 570 coming out.