Aston Martin has announced its intention to cut 500 jobs and reduce production of its front-engined sports car production “in order to rebalance supply to demand”.
The Company’s first SUV, DBX, remains on track for deliveries in the summer and has a strong order book said the Warwickshire-based luxury car company in a statement.
The company hopes that these measures, along with others to reduce expenditure from the business at every level including in areas such as contractor numbers, site footprint, marketing and travel, will restore profitability to the iconic British brand.
The restructuring is expected to annually deliver operating cost savings of around £10 million, reduced direct manufacturing costs of around £8 million and £10 million of reduced capital expenditure.
The announcement comes just a week after Aston Martin announced that Tobias Moers is to take over as Chief Executive Officer. Tobias, 54, will be appointed to the Board as an Executive Director and will take over from Dr Andy Palmer. He will be based at the Company’s headquarters in Gaydon, Warwickshire and will join on 1 August 2020.
Dr Andy Palmer took over as CEO in 2014. Interviewed the following year by the editor of Business & Innovation Magazine, he said: “When I joined we were selling a 10-year-old range of cars with nothing in the pipeline to replace them.” Dr Palmer – who moved to Aston Martin from Nissan where he rose to become one of the Japanese car manufacturer’s three global chief operating officers, initiated the design of a new SUV, and lead the planning and development of Aston Martin’s new SUV factory in St Athan, South Wales. While Gaydon continues to be the home of the company’s sports car production, St Athan will be the home of Aston Martin’s first SUV, the DBX. When full production starts – which was supposed to be in the second quarter of 2020, the company said it will have created up to 600 new highly-skilled jobs, rising to 750 at peak production.
In 2018 the company floated on the London Stock Exchange, but by January this year it was citing “Challenging trading conditions in Europe” for lower sales and higher selling costs. Core wholesales declined seven per cent year-on-year to 5,809.
In January Canadian billionaire Lawrence Stroll took a 16.7% stake in the company. He said at the time: “I, and my partners, firmly believe that Aston Martin is one of the great global luxury car brands. I believe that this combination of capital and my experience of both the motor industry and building highly successful global brands will mean that, over time, we fulfil Aston Martin Lagonda’s potential.”