Andy Palmer P45 Dailyarblog.com
Mercedes Get Ready To Sack Andy Palmer And Replace Him With AMG Executive
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The news of Aston Martin’s CEO, Andy Palmer, being sacked from his position and replaced with a Mercedes AMG executive should come as no surprise. Palmer led the luxury sportscar maker to a triumphant stock market flotation. Two years later and Aston Martin’s stock value has fallen by 98 percent. After initially being valued at $4.87 billion USD, the company is currently worth $648 million. The former Nissan executive implemented mass-production strategies to a low volume luxury carmaker. By oversupplying the market Aston Martin simply didn’t have enough demand and now dealers are stuck with inventory that is sitting on forecourts, essentially depreciating assets. 

Then the Covid-19 pandemic hit and turned the screw loose on Palmer’s Aston Martin tenure. During the first quarter of 2020 Aston sold 578 cars, a 45 percent downturn from the same period in 2019. Lawrence Stroll, the billionaire entrepreneur and owner of the Formula 1 team Racing Point, parachuted in with a $600 billion USD bailout.


But Aston Martin’s debt of over $1 billion USD exceeds its earnings and much more money will be needed to extract it from terminal financial decline. Palmer’s last throw of the dice to keep Aston Martin on the straight and narrow is the DBX SUV. But he made another misstep by declaring it will sell 4,000 units in its first year of production.

He later backed down by saying just over 2,000 pre-orders have been made. It is possible Palmer overstated the demand of the DBX to ‘play’ the stock markets and temporarily increase the company’s valuation. Stock markets rely on confidence, but the main players aren’t stupid and they didn’t buy into Palmer’s mind-games.

The real take away here is not the impending sacking of Andy Palmer, it is more to do with the influence of Mercedes. Mercedes is a very minor shareholder in Aston Martin, just 5 percent. But it seems their links with Lawrence Stroll, and Formula 1’s Toto Wolff, have combined to give Mercedes considerable clout on who runs Aston Martin from this point forward.


Andy Palmer P45 Dailyarblog.com
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