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| Aston Martin boss maps out route to profitability for next 100 years | Aston Martin boss maps out route to profitability for next 100 years |
| (35 minutes later) | |
| Andy Palmer was a successful senior executive at one of the biggest car companies in the world. He had no financial worries and was surrounded by the love of his family. | Andy Palmer was a successful senior executive at one of the biggest car companies in the world. He had no financial worries and was surrounded by the love of his family. |
| Life was good; but it wasn’t enough. | Life was good; but it wasn’t enough. |
| That was two years ago. Palmer had just turned 50 and even though he was among the top three executives at Nissan, where he had enjoyed a 23-year career, doubts gnawed away at him. | That was two years ago. Palmer had just turned 50 and even though he was among the top three executives at Nissan, where he had enjoyed a 23-year career, doubts gnawed away at him. |
| Since the age of 20, the ambitious Brit had wanted to run a car company. | Since the age of 20, the ambitious Brit had wanted to run a car company. |
| “I just thought, what happened to that 20-something-year-old upstart who told everyone, including Nissan, that he was going to be the boss of the company?” said Palmer, who took over as chief executive at Aston Martin in October. | “I just thought, what happened to that 20-something-year-old upstart who told everyone, including Nissan, that he was going to be the boss of the company?” said Palmer, who took over as chief executive at Aston Martin in October. |
| “I realised I hadn’t done what I wanted to do, and then I realised that there aren’t that many car companies that you can run because they are either huge corporations or belong to a family. | “I realised I hadn’t done what I wanted to do, and then I realised that there aren’t that many car companies that you can run because they are either huge corporations or belong to a family. |
| “Also, there’s a pretty big talent pool competing for about 10 top jobs in the industry.” | “Also, there’s a pretty big talent pool competing for about 10 top jobs in the industry.” |
| Palmer’s bout of soul searching was brought to a juddering halt last year when Aston Martin came calling for him. | Palmer’s bout of soul searching was brought to a juddering halt last year when Aston Martin came calling for him. |
| The Midlands-based sports carmaker was crying out for some stability. It is the only manufacturer of luxury sports cars that isn’t owned by one of the industry giants and was in dire financial straits. | The Midlands-based sports carmaker was crying out for some stability. It is the only manufacturer of luxury sports cars that isn’t owned by one of the industry giants and was in dire financial straits. |
| Aston is loved and revered in Britain; it is James Bond’s carmaker of choice. And yet, that groundswell of affection has consistently failed to translate into financial success. | Aston is loved and revered in Britain; it is James Bond’s carmaker of choice. And yet, that groundswell of affection has consistently failed to translate into financial success. |
| For much of its 101-year history, Aston has teetered on the brink. Successive owners and chief executives have been hammered by heavy losses – £25m in 2013 and £36m the year before. | For much of its 101-year history, Aston has teetered on the brink. Successive owners and chief executives have been hammered by heavy losses – £25m in 2013 and £36m the year before. |
| Palmer now has six years in which to make Aston profitable and self-financing. He has a £500m warchest for new products and the company has just raised a further £200m by issuing preference shares to City investors. | Palmer now has six years in which to make Aston profitable and self-financing. He has a £500m warchest for new products and the company has just raised a further £200m by issuing preference shares to City investors. |
| “I want to balance the portfolio so we don’t go through this feast and famine,” he said. “We need to generate enough cashflow so I don’t have to go out with the begging bowl. The plan is to bring the company to profitability within six years. So that, for the next 100 years, [Aston] won’t go bankrupt.” | |
| Palmer is clear that Aston Martin must remain firmly rooted in the luxury segment, but it must also spread its wings further than its core sports car market. | Palmer is clear that Aston Martin must remain firmly rooted in the luxury segment, but it must also spread its wings further than its core sports car market. |
| He is planning a raft of new product launches. One of the first new models to roll off the line at Aston’s headquarters in Gaydon, Warwickshire, is likely to be a sporty 4x4 – the DBX. | He is planning a raft of new product launches. One of the first new models to roll off the line at Aston’s headquarters in Gaydon, Warwickshire, is likely to be a sporty 4x4 – the DBX. |
| Having the support of a settled group of shareholders is key, Palmer acknowledges. | Having the support of a settled group of shareholders is key, Palmer acknowledges. |
| For years, Aston has been passed around like some prized trophy asset. In 1987, Ford bought a majority stake but sold it in 2007 to a consortium including Kuwaiti investors. Then, two years ago, Investindustrial – an Italian private equity firm that turned around Ducati before selling it to Audi – snapped up a 37.5% stake. | For years, Aston has been passed around like some prized trophy asset. In 1987, Ford bought a majority stake but sold it in 2007 to a consortium including Kuwaiti investors. Then, two years ago, Investindustrial – an Italian private equity firm that turned around Ducati before selling it to Audi – snapped up a 37.5% stake. |
| Daimler, the German giant that owns Mercedes, took a 5% stake last year in return for a deal to supply the Midlands producer with engines and electronic technology. | Daimler, the German giant that owns Mercedes, took a 5% stake last year in return for a deal to supply the Midlands producer with engines and electronic technology. |
| Palmer believes this deal could prove crucial in securing Aston’s survival, but denies it is a precursor to a full takeover by the Germans. | Palmer believes this deal could prove crucial in securing Aston’s survival, but denies it is a precursor to a full takeover by the Germans. |
| “It could happen,” he admits. “But if I’ve done my job properly, it’s going to be more expensive. Daimler should have bought it now because it’s cheap.” | “It could happen,” he admits. “But if I’ve done my job properly, it’s going to be more expensive. Daimler should have bought it now because it’s cheap.” |
| He also notes that Dieter Zetsche, chairman of Daimler, has repeatedly stated that he doesn’t want to buy Aston outright. However, it does not want this jewel of British auto engineering falling into anyone else’s hands. | He also notes that Dieter Zetsche, chairman of Daimler, has repeatedly stated that he doesn’t want to buy Aston outright. However, it does not want this jewel of British auto engineering falling into anyone else’s hands. |
| “My personal opinion is that the most credible way for one of our shareholders to exit is to IPO,” says Palmer. | “My personal opinion is that the most credible way for one of our shareholders to exit is to IPO,” says Palmer. |
| The Aston boss is affable, engaging and chatty. It is easy to see why Aston’s investors plucked this ambitious, likeable executive from the summit of the Nissan empire. | The Aston boss is affable, engaging and chatty. It is easy to see why Aston’s investors plucked this ambitious, likeable executive from the summit of the Nissan empire. |
| He may be running James Bond’s carmaker of choice, but Daniel Craig needn’t worry about his 007 role just yet. Palmer looks more like Blofeld than Bond. | He may be running James Bond’s carmaker of choice, but Daniel Craig needn’t worry about his 007 role just yet. Palmer looks more like Blofeld than Bond. |
| The endless stream of lunches and sedentary lifestyle of a top executive have taken their toll. Palmer runs his fingers through his rapidly receding hairline and leans back in the chair, which puts extra strain on one shirt button at the apex of his round stomach. | The endless stream of lunches and sedentary lifestyle of a top executive have taken their toll. Palmer runs his fingers through his rapidly receding hairline and leans back in the chair, which puts extra strain on one shirt button at the apex of his round stomach. |
| “It seems odd now, looking at me, but I used to be quite sporty when I was younger,” he says. “I was into tennis, badminton and fencing. I’ve also always had bikes and cars.” | “It seems odd now, looking at me, but I used to be quite sporty when I was younger,” he says. “I was into tennis, badminton and fencing. I’ve also always had bikes and cars.” |
| The 52-year-old still rides a BMW K1600 motorbike at weekends, and races an Aston Martin Vantage GT4. | The 52-year-old still rides a BMW K1600 motorbike at weekends, and races an Aston Martin Vantage GT4. |
| Moving back to Britain has been more of a wrench for Palmer than his Japanese wife, who he met at Nissan in Britain, and youngest daughter, who is eight, and was born in Japan. He has three other children from a previous marriage. | |
| “If I could import sushi, I would be in a perfect world,” he says. | “If I could import sushi, I would be in a perfect world,” he says. |
| In many ways, Palmer has come home. He was born in nearby Stratford Upon Avon and did his apprenticeship down the road at a car parts firm in Leamington Spa 35 years ago. | In many ways, Palmer has come home. He was born in nearby Stratford Upon Avon and did his apprenticeship down the road at a car parts firm in Leamington Spa 35 years ago. |
| He and his brother, who is five years younger, had a humble upbringing just a few miles from Gaydon. His father was an engineer, his mother a secretary. | He and his brother, who is five years younger, had a humble upbringing just a few miles from Gaydon. His father was an engineer, his mother a secretary. |
| “I didn’t much like school,” he recalls. He failed his 11-plus exam and instead focused on his dream of becoming a car engineer. | “I didn’t much like school,” he recalls. He failed his 11-plus exam and instead focused on his dream of becoming a car engineer. |
| Despite his early antipathy to academia, Palmer has since completed a masters degree in product engineering and a doctorate in management from Cranfield University. | Despite his early antipathy to academia, Palmer has since completed a masters degree in product engineering and a doctorate in management from Cranfield University. |
| So why does Palmer think he can succeed at Aston when so many others have failed? | So why does Palmer think he can succeed at Aston when so many others have failed? |
| Sitting in his first-floor office at Aston’s white-walled and glass-panelled head office, he recounts the tale of Chesley Sullenberger. | Sitting in his first-floor office at Aston’s white-walled and glass-panelled head office, he recounts the tale of Chesley Sullenberger. |
| Sullenberger was the US Airways pilot who landed his plane in the Hudson river off Manhattan in January 2009 after it hit a flock of Canada geese. The veteran pilot’s splashdown saved all 155 passengers and crew. | Sullenberger was the US Airways pilot who landed his plane in the Hudson river off Manhattan in January 2009 after it hit a flock of Canada geese. The veteran pilot’s splashdown saved all 155 passengers and crew. |
| ‘Captain Cool’ retired not long after but remarked, memorably for Palmer, that every day of his 42-year career had been training for that one moment. | ‘Captain Cool’ retired not long after but remarked, memorably for Palmer, that every day of his 42-year career had been training for that one moment. |
| After the apprenticeship at the car parts company, Palmer joined Austin Rover, where he first encountered the jaw-dropping attention to detail that Honda brought to a joint venture. | After the apprenticeship at the car parts company, Palmer joined Austin Rover, where he first encountered the jaw-dropping attention to detail that Honda brought to a joint venture. |
| “From that moment, I was hooked,” Palmer says of his encounter with Japanese industrial practice. | “From that moment, I was hooked,” Palmer says of his encounter with Japanese industrial practice. |
| So off he went to Nissan, where he spent 24 years, including a 13-year stint in Japan. In that time, he became one of Nissan chief executive Carlos Ghosn’s closest confidants. | So off he went to Nissan, where he spent 24 years, including a 13-year stint in Japan. In that time, he became one of Nissan chief executive Carlos Ghosn’s closest confidants. |
| When he quit, Palmer was chief planning officer of Nissan, and was responsible for directing strategy. He also launched cars such as the electric Leaf, and was chairman of the Infiniti luxury brand. | When he quit, Palmer was chief planning officer of Nissan, and was responsible for directing strategy. He also launched cars such as the electric Leaf, and was chairman of the Infiniti luxury brand. |
| It was a big risk to take, leaving behind such a powerful group that produces more than 8m cars a year, to head a much-loved but niche sports carmaker that sells around 4,000 a year. | It was a big risk to take, leaving behind such a powerful group that produces more than 8m cars a year, to head a much-loved but niche sports carmaker that sells around 4,000 a year. |
| Palmer chuckles: “I thought you guys [the media] would say I’d gone mad – going from the number 3 in Nissan to running this cottage industry.” | Palmer chuckles: “I thought you guys [the media] would say I’d gone mad – going from the number 3 in Nissan to running this cottage industry.” |
| It may have seemed crazy, but Ghosn must have been pleased for him? | It may have seemed crazy, but Ghosn must have been pleased for him? |
| For the first time, the garrulous Palmer pauses and appears tense. “He hasn’t spoken to me since. I suppose he was disappointed.” | For the first time, the garrulous Palmer pauses and appears tense. “He hasn’t spoken to me since. I suppose he was disappointed.” |
| Palmer is clearly hurt by the snub, but tries to shrug it off: “At the top end of this industry, it’s a pretty ruthless place. I take more solace from the friends I made and still have at Nissan. I also look at the success of the Qashqai and that makes me quite happy. | Palmer is clearly hurt by the snub, but tries to shrug it off: “At the top end of this industry, it’s a pretty ruthless place. I take more solace from the friends I made and still have at Nissan. I also look at the success of the Qashqai and that makes me quite happy. |
| “In 50 years’ time, nobody is going to remember who the number 2 or 3 at Nissan was.” | “In 50 years’ time, nobody is going to remember who the number 2 or 3 at Nissan was.” |
| The British car industry and foreign ownership | The British car industry and foreign ownership |
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