Andy Palmer has done much for Aston Martin, but amid troubled times, we consider what Tobias Moers, currently boss of Mercedes-AMG, can bring to the renowned maker.
For many months it has been a matter of when, not whether, Aston Martin’s president and CEO of the past six years, Dr Andy Palmer, would leave the job. Things have looked bad for him since AML shares, newly listed two years ago in London at AU $35 amid much pomp, promptly halved in value and have since fallen lower.
They worsened when Canadian billionaire brand entrepreneur Lawrence Stroll entered the Aston picture in January as executive chairman brining $1 billion in cash — especially given Stroll’s reputation for micro management and his avowed determination to correct what he clearly saw as mistakes on Palmer’s watch such as an oversupply of cars and needless tinkering with Aston-badged submarines and Miami property.
However, the most pressing questions are raised by news that Palmer’s replacement will be Tobias Moers, chief executive of Mercedes-AMG, the performance arm of Daimler, which already holds a five per cent stake in Aston Martin and provides engines, electronics and an increasing level of know-how to the Gaydon-based company.
Moers, an ambitious 54-year old engineer who joined AMG 26 years ago and has held many roles in the company, is successful and widely experienced at making and selling high performance cars. The managing director’s role he has had for seven years is viewed as an important training ground for Daimler executives bound for bigger things: a previous incumbent was Ola Kallenius, now chairman of Daimler and head of Mercedes-Benz.
Moers must already have a good working knowledge of the Aston business after years as its most important component supplier, so his arrival begs plenty of questions about plans Daimler may have to increase its relationship with Aston Martin, given the Gaydon company’s value as a provider of economies of scale for AMG engines and hardware. It may be that Moers will view the UK assignment with relief: insiders say their relationship at AMG was not all sweetness and light — Moers pressing for ever more sophisticated cars where Kallenius was a cost-cutter in the Ghosn mould.
Moers’ arrival will also raise concerns among the faithful about Aston’s ability to continue portraying itself as a British company, and about the fate of its sports car racing activities, given the recent announcement that Lawrence Stroll’s Silverstone-based Racing Point F1 team will be rebranded as Aston Martin from next year.
Aston Martin’s and Andy Palmer’s difficulties have been greatly compounded by the effects of the coronavirus — which has even prevented the company from staging an international launch for the new product on which it admits its success depends, the DBX SUV — although a decline in demand for luxury goods was gathering pace even before the infection took hold. No high-end car company, not even Ferrari, is doing well at present and many are in dire straits.
Despite all, it would be deeply unfair to ignore the six-year contribution made by Palmer, who fostered a new atmosphere of optimism and creativity when he arrived from Nissan in 2014, and within months had drawn up a very credible “Second Century Plan” that entailed launching a new model a year. Within three years he had renewed the company’s existing model range and found a convincing and evidently profitable role for the always-problematic Lagonda brand
Most important of all, he led the creation of the DBX, opening and equipping a new factory for its manufacture at St Athan, South Wales. That car, impressive from the outset, could yet lead a revival of the company’s fortunes provided a worldwide demand for luxury SUVs survives when times improve.
Palmer himself has been significantly enriched by his Aston exploit (one estimate valued his share allotment at the issue price at over $110 million) but there is no doubt that he was totally dedicated to the Aston assignment, and will be reluctant to leave it unfinished. There are few certainties — except that the company is currently in very serious trouble — but history may still come to show that Palmer put the company on the path to eventual success.