Aston Martin up for grabs

Ailing giant car company Ford, has decided it needs to focus on its core product set and is starting the process of dumping its ‘vanity’ projects. Bill Ford announced that the first company from its so-called Premier Automotive Group, Aston Martin would be put on the block and auctioned off.

Ford is reckoning on getting $2 billion for the Luxury car manufacturer, which famously featured in many of the James Bond movies and reached an iconic status because of it. Ford has appointed an investment bank to handle to deal. Last month Ford hired Kenneth Leet, a former Goldman Sachs banker to guide it through the maze. Ford lost $1.3 billion in the first half of the year.

Until 2005 Aston Martin had never made a profit, Ford took a stake in the company in 1987. Since then the company has shown strong recovery, with investment in a new automated factory, moving away from hand building each car individually.  Aston Martin sold 4,500 cars last year, although that sounds small; it’s a significant increase on the 46 it sold in 1992.

Although it claims to be in the black now, the last published figures for 2004 show a loss of $16 million. Although Ford is hoping for $2 billion most analysts put the company at a more realistic value of  $500 million.

Feeling high from his recent breaking of a land speed record, owner of Digger company JCB, Sir Anthony Bamford stated last week that he would be interested in taking over Jaguar Motors, he also outlined in the same meeting that he had no interest in the other parts of the Premier Automotive Group, so Aston Martin was off the radar for him.

Ford is doing well to rid itself of these ‘vanity’ projects. The company itself is in dire straights and needs to update and consolidate its production and management processes. As is the case for many US motor companies, there has been too much investment in secondary projects and not enough investment in core markets and products.

Today, it can be argued that US car manufacturers are gridlocked with union agreements and years behind the Japanese in design. With the world moving towards cheaper, better-produced cars that require less gasoline, the US companies need to respond. It’s that old management mantra – FOCUS FOCUS FOCUS.