Technical know-how from Ford Motor Company will continue to play an important part in the future of Aston Martin, despite the sale of the prestige brand.
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Volvo’s safety engineering skills and crash-test facilities in Sweden will be used to get the four-door Rapide super-saloon into production by 2010, the first major new product expected from the independent Aston Martin.
“We will continue to use Volvo on the Rapide project for safety work,” Aston Martin CEO Uli Bez confirmed at the press conference to announce the sale to a Kuwaiti-backed, Anglo-American consortium.
Volvo’s safety engineering has been instrumental in the design of Aston Martin’s bonded aluminium VH platform, which underpins the DB9 and V8 Vantage, and which will be stretched to underpin the Rapide.
Both the DB9 and V8 Vantage are engineered to Ford’s global safety standards, meaning they can be sold in all markets around the world, a costly process for an independent car maker.
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By GlobalDataCrash-engineering the four-door for side impacts will be a specialist job, the B-pillar needing expert design that Aston Martin doesn’t have, since all its models in recent history are three-door coupes.
Ford will also continue to host Aston Martin’s engine facility at Cologne, where V8 and V12 engines are assembled on a dedicated line by Aston Martin-employed workers.
The sell-off is expected to have less significance for supply of minor components like electrical switches and hidden small parts, according to Bez: “There are very, very few parts in the car that are shared with Ford and those that are we could source independently from suppliers.”
Although, in the tiny numbers ordered by an independent Aston Martin, the unit cost of parts could rocket without the bulk supply deals underpinned by Ford’s huge global sales volume. Details like these have wrecked the hopes of other specialist car makers hoping to survive independent of major OEMs.
For example, the main raw material in Aston’s cars is aluminium, a material that has risen inexorably in price in recent years. Outside the Ford bulk purchasing process, Aston could see its raw materials prices go up, too.
Some suppliers might also be more nervous that Aston’s move from under the wing of Ford increases the risk of defaults on payments, and raise parts prices as a result – a problem faced by independent sports car makers across the globe.
Ford and the new investors know all this, of course, so at the new investor’s insistence, Ford has retained a minor share in its spun-off subsidiary, worth GBP40m, but held in special preference shares.
Details of these shares are yet undisclosed, although they are likely to be non-voting, denying Ford any say in the company’s strategic direction, but letting it benefit financially if the value of Aston goes up.
“There’s nothing to stop us selling the stake, but it’s there because the consortium wanted it,” a Ford spokesman said.
Ford itself is structured in this way, Ford family members controlling the bulk of voting shares, with investors buying stock with limited voting rights.
Ford appears to have got a reasonable deal with the sell-off, the transaction majoring on cash, according to sources.
Although getting towards the target figure of $US1bn mentioned when the sell-off was announced last August, has been helped by the weak dollar, now at $1.9o to the pound.
On paper, the GBP479m transaction price gives the Blue Oval a more than 20-fold return on the GBP20m originally invested in the British-sports car maker in September 1987.
Back then, Ford took a 75% stake in Aston Martin from Greek shipping magnate George Livanos, later upping its stake to 100%.
In the intervening years, Ford has sunk hundreds of millions of pounds into Aston Martin for models like the DB7 and more recently a new range of alloy-platform cars, the DB9/V8 Vantage and a gleaming new factory and HQ at Gaydon.
Quizzed on the size of that investment at a press conference yesterday, Ford Europe chairman Lewis Booth, refused to quote a figure, although it is likely to be counted in the billions of pounds.
The deal also gives the new consortium ownership of many acres of prime English countryside. As well as the Gaydon site in Warwickshire, the deal includes land and property at Newport Pagnell, ripe for redevelopment into housing, being situated close to the M1 and just a short drive from Milton Keynes.
Today, though, the new owners are promising that Aston’s Works Service at Newport Pagnell will stay put. The future of the old coachworks opposite Works Service, is less clear since it’s main purpose – production for the Vanquish – will shortly stop.
Julian Rendell
