Gordon Sutherland’s family owned Aston Martin between 1933 and 1947. When I met him, aged 88, in 1996 he joked that “while saving Aston Martin was a reoccurring chore for all its owners, making money was optional”.
Sutherland’s shrewd judgement came to mind this week with the news that Andy Palmer, highly respected former senior manager at Nissan, who joined Aston Martin as president and chief executive in October 2014, is to leave the company along with three other directors after a colossal collapse in the share price from £19 a share at the Initial Public Offering (IPO) in 2018 to just 35p.
After the 2018 flotation it was clear to everyone but The City that Palmer would need a lot more money to secure the company and its new DBX SUV to be built at a new factory in Wales, especially as luxury sports car sales were falling out of a tree and the Far Eastern markets, upon which Palmer and his team had been relying to service loans and keep the share price bobbing along, were starting to falter.
City investors, with their fingers smouldering after the IPO, weren’t going to pay, nor were existing investors, which included the Italian Investindustrial group, various Kuwati interests, or Mercedes-Benz, which supplied engines and electronics to Aston and had a 3.13 per cent holding.
In the end it was Lawrence Stroll, a Canadian billionaire and owner of the Racing Point Formula One team, who took a £182 million, 20 per cent share and chairmanship, and has dumped Palmer in favour of Tobias Moers, 54-year-old German engineer par excellence, who is currently a board director of Mercedes-Benz AMG.
So an all-new management and ownership team is in place from August at the makers of James Bond’s company car. Will they be enough to turn fortunes around? I’d wager not.
Because while Andy Palmer might have been over-ambitious and over-reliant on perfidious City investors, he, too, will have certainly saved the company on a monthly basis, even boasting that he’d made an operating profit for the very first time – though he’d not be the first to do so. According to the company’s accounts filed at Companies House, Aston Martin Lagonda made a pre-tax profit of £135 million in 2017 and £46 million in 2018.
To be fair, though, in 106 years, every single previous owner from founders Lionel Martin and Robert Bamford, through Bill Renwick, Augustus Bertelli, Lance Prideaux Brune, Sir Arthur Sutherland (Gordon’s father), David Brown, Peter Spargue and Alan Curtis, Victor Gauntlett and Peter Livanos, Ford, and various private equity firms, all did that, but have any of them ever made a return on their initial investment?
There’s a great story from the era of David Brown, the diddy industrialist with an eye for a well-turned ankle, who owned Aston from 1947 to 1972 and whose DB initials now adorn the model badge. While Aston Martin was used as a halo marque for the whole David Brown Group, it's unlikely it ever made money.
An apocryphal story from the 1960s tells that when Hollywood actor Clark Gable toured the factory with David Brown, Gable announced that he would like to buy an Aston Martin, but because of the publicity value of his ownership, he wanted to pay only the cost price for his car. Brown brightened considerably, saying: "Oh, thank you very much Mr Gable, most of our customers pay £2,000 less than that."
Moers, a mechanical and industrial engineering graduate from Offenbach University, starts with one foot ahead of the game in that he has run Mercedes-Benz’s AMG high-performance department for years, though to be fair in recent years his woebegone face has spoken of the pressures of marketing ever more powerful, badge-engineered hot hatchbacks instead of the elegant and supremely powerful grand tourers for which AMG is most famed.
He also managed one of the most difficult projects, Mercedes’s 217mph, $2.72 million Formula One car for the road, the Project One, which has not been without its problems. Aston Martin’s own hypercar, the 250mph $3.25 million Valkyrie, also hasn’t been the easiest project.
So Moers is Aston’s second German chief executive in seven years; the previous one was Ulrich Bez, who ran the company from 2000 to 2013. On Moers’s desk when he officially joins the firm on August 1 will be a big pile of ‘To Do Now’ notes including: an almost total collapse of the market; two complete factories emerging from shutdown, one of them brand new; high dealer stocks and rampant discounting and launching a new SUV is a world seemingly falling out of love with the things.
Then there’s the usual issues that affect small specialist companies making luxury cars; as they say, “If you want to make a small fortune making British sports cars, start with a large one.”
In 2008, when Ford sold Aston Martin to a couple of Kuwati and Italian investment funds for £500 million, there were some daft things said about how Aston could be a new sort of luxury brand surviving on its own with super-high prices to suit. That was never going to happen as legislation on the environment and safety means small car makers need a big car maker to shelter them from the winds of change and supply parts and drivelines at preferred supplier prices.
In the next 15 to 20 years large-capacity petrol engines such as those fitted to all Astons will have to be replaced with petrol-electric hybrids and pure battery drivetrains, which Aston won’t have the funds to develop on its own.
Aston Martin already gets its engines from Mercedes AMG and it’s likely Moers will have to talk turkey with his old employers to dump Aston’s expensive Italian transmissions and go for all-Mercedes AMG drivetrains, as well as getting hold of the advanced new hybrid units and battery-electric drivetrains that are in the current range of Mercedes cars or currently under development.
James Bond’s new outing No Time To Die has been put back until the autumn, but the trailers show a litany of Aston’s best and greatest on screen, including his gorgeous old charger the DB5.
It could be, however, that Moers is going to have to update the British spy and his cars for the next but one outing.
Now pay attention Bond, this is an electric plug...
To talk all things motoring with the Telegraph Cars team join the Telegraph Motoring Club Facebook group here