Big CEO interview: Dr Andy Palmer, Aston Martin
PUBLISHED: 10:12 06 January 2017
Photographer - Max Earey
Dr Andy Palmer is turning around the fortunes of the UK's most iconic car brand and investing in new car design
Aston Martin, the only independent British car company of any size left in the UK, is the epitome of timeless cool.
The marque of choice for almost every James Bond since 1964, the well-tailored bottoms of Britain’s most debonair actors have warmed the seats of Aston Martin DB5s to the DB10s.
Last September, after a hiatus of over a decade, Aston Martin’s DB marque made a comeback as the first DB11 began rolling off the company’s production lines at Gaydon, Warwickshire. It followed the DB9, launched in 2003. (The DB10 was designed exclusively for the film 2015 Spectre and only ten were manufactured). The DB11 is heralding the start of a new, hopefully profitable, era for Aston Martin.
For it’s true to say that the history of Aston Martin, founded in 1913, has been rocky at times, the company has been bought and sold many times throughout its 103-year history.
Now its future seems as secure as it can be. Owned by two Kuwaiti families (Investment Dar) and one Italian Family (Investindustrial), German car company Daimler also has a 5% ownership. In 2014 Aston Martin announced the appointment of one of the automotive world’s most successful executives, Dr Andy Palmer. Andy is now Aston Martin’s President and CEO and he’s wasted no time in accelerating the company’s ambitions.
A self-confessed product man, Andy is personally inspecting the first 1000 DB11s currently rolling off the production line. That’s a good 30 minutes per car, 500 hours or so of his head under each perfectly polished bonnet, around 40 working days of his life signing off perfection.
“I’m a product guy, it’s what I know and love,” he says. “I’m in our design offices every day, and walking the factory floor a couple of times a day. The DB11 is Aston Martin’s latest design. There’s often a reticence to buy the first of any new car model so I’m putting my name and email address on the first 1000 engine inspection covers. That’s a new owner’s security that the car is good, because I’m personally vouching for it.”
You might expect the boss of one of the world’s most lauded luxury car brands to be to be perfectly suited, booted and with an urbane, perhaps snooty manner. You’d be wrong. When we meet at Aston Martin’s Gaydon headquarters, Andy’s jacket is hanging off the back of his chair and his shirtsleeves are rolled up. This man means business.
Dr Andy Palmer might have a Bachelor’s degree, a Master’s, an MBA and a PhD under his belt, not to mention four professorships, but his career began in 1979 as an automotive apprentice in the Midlands, and his engineer’s mindset has never faded.
His apprenticeship, completed by the time he was 20, was overshadowed by the British car industry sinking to its lowest point. “As a supplier to British Leyland, the company I worked for was regularly teetering on bankruptcy thanks to really poor productivity. It was crazy. There had to be a better way.”
Determined to understand the industry’s problems and help solve them, Andy began a Bachelor’s degree at Coventry University, studying at night over three years. While studying he secured a job at Austin Rover, working under Clive Hickman (now chief executive of the Midland Technology Centre, part of the UK’s High Value Manufacturing Catapult). Clive encouraged Andy to study further, and Austin Rover paid for him to do a three year Master’s at Warwick.
Meanwhile his career was blossoming. Austin Rover was working with Honda and the contrast between the chaos of Austin Rover manufacturing and the sleek processes followed by the Japanese carmaker came sharply into focus. “I looked at the Japanese engineers and thought ‘these guys are bloody good’, why can’t we be the same.”
Andy wanted to learn from the best. After six years with Austin Rover, he joined Nissan in 1991, vowing to discover their secrets and return to fix the UK’s broken automotive industry.
At Nissan, where he rose to be the company’s most senior engineer in Europe, he learned more about the Japanese ‘Kaizen’ method of engineering: ‘if it’s broken, fix it and make sure it never happens again.’ A simple concept, but back then amazingly difficult to implement in a British context.
Kaizen methods or not, at that time Nissan was struggling financially. In 1999 its’ saviour was French car company Renault which took a 34% stake in the business. Andy was invited to turn around the company’s failing Light Commercial Vehicle business. He did so, very successfully, rising again and taking on planning, IT, marketing – finally becoming one of Nissan’s three global chief operating officers.
Then Aston Martin came calling. “I could have stayed in Japan, being second in command, or I could be the boss at Aston Martin,” he says. It was a no-brainer. “Aston Martin is a great brand, based near where I went to school and no one had been able to make the business profitable for years. It was the luxury end of the automotive market, one part of the industry I’d yet to conquer.” He joined aged 51, determined to doing something spectacular with the company.
For the first four months he listened: to his global dealership and to the employees at Gaydon. Then he took his plan to the board in January 2015.
“When I joined we were selling a 10 year old range of cars with nothing in the pipeline to replace them. Our plan is to stay in sports cars but replacing all the ones we currently manufacture. We’ll be bringing back the Lagonda name, and we are designing a brand new Aston Martin Sports Utility Vehicle.”
The company has bought a site in South Wales, near Cardiff specifically to manufacture the new SUV.
“We will end up with seven cars, over seven years with a seven-year life cycle. That gives us a consistence expenditure on R&D, and revenue return which provides a positive free cash flow to invest in the next generation of cars, giving the company a surer financial footing,” says Andy.
Why is Aston Martin, the car of cool, intent on building a SUV? Surely ‘utility’ is the polar opposite of luxury, even with ‘sports’ tacked in front?
It’s simple mathematics. There are around 16 million high net worth individuals in the world, and in that very select world there isn’t a car company that covers all type of car.. “72% of our customers have an SUV in their garage,” Andy says. “Why shouldn’t that SUV be designed by Aston Martin?
“Yes we make luxury sports cars. Everything we do is about proportion and beauty. Every one of our cars has to be the most beautiful one in its segment and the Aston Martin SUV will be the best of the best.” The first SUV will roll off the production lines in 2019.
Just over two years at the helm of one of the UK’s most iconic brands and business is on the up. “We are on a long journey, but early sales are going well,” says Andy.
Andy Palmer’s unique recipe for success
“I get things done, but my style of management has adapted a lot from the confrontational style of survival politics driven by testosterone I encountered in Austin Rover. I matured when I worked at Nissan and hopefully the guys at Aston Martin will say I’m relatively logical and much softer. I’ve got a steely edge, but management is more about motivating others to work hard. The Japanese are process orientated. It’s about data. It’s about what I know here (he puts his palm to his forehead), rather than what I feel here (he strikes his heart). I work hard, and when everyone else has gone home, I leave.”
Aston Martin boosts apprenticeship training
Aston Martin needs engineers to thrive and grow, but many engineers are being drawn from its supply base, and the UK already has a problem of too few UK suppliers. The country needs to invest in apprentices and bring more suppliers to this country, says Andy.
The car company has increased its number of apprentices significantly, and the good news for them is that due to the lack of apprentices coming through over the last 20 years, they are likely to get promoted quickly because Andy’s cohort of 1970s apprentices are closer to retirement.
“We train them at Gaydon, using Walsall College as our training partner,” says Andy. “We offer training opportunities to apprentices from 16 to 21. Our graduate apprentices study at Warwick University.
“My goal is that by 2025, no matter if you came as a 16, 18 or the 21 year old route, you will receive on the job training, and we’ll put you through your industrial management qualifications. By 2025 every apprentice will be equal, no matter what route they came through. That’s when democracy ends and after that it’s how good you work and how hard you are prepared to work.”
Britain needs an industrial strategy
Andy has given evidence to a May Government parliamentary steering committee on the UK’s industrial strategy. “It’s not enough to want an industrial strategy- you’ve got to work out how you want it to drive the economy,” he said. “If you want to concentrate on the services and financial industries, you’ve got to get interest rates and inflation under control and don’t worry about the manufacturing sector, we’ll just die out.
“But if you want a country that makes things, concentrate on getting the pound strength back, or if you want the intellectual property, nurture exports which means actively managing a weaker pound in the same way that Japan does with its Yen. It’s not always a success but there are parallels. It’s an island and it exports. Sound familiar?
Aston Martin’s biggest market outside the UK is the United States, with Europe its’ second biggest and Asia Pacific is growing fast.