Aston Sale Imminent – But Why?

March 6, 2007
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The band blares a nameless pop tune as I lean in a little closer to one of long-time sources at Ford Motor Co. “Soon,” he shouts, hoping to be heard over the din at a Geneva preview of the automaker’s new Mondeo, “It should be done soon.”

By “it,” I must explain, he was referring to the imminent sale of Ford’s ultra-luxury brand, Aston Martin.

Since the U.S. automaker announced, last year, plans to put Aston on the auction block, there’ve been countless headlines devoted to the expected sale. A surprising number of bidders have jostled in the effort to pull off the high-profile purchase – including one buy-out group led by former Ford CEO Jacques Nasser. At this point, the winner appears to be David Richards, head of the European motorsports group, ProDrive, which already runs Aston’s racing team, and which, according to the folks at the Financial Times, will likely shell out about $900 million to complete the deal.

The question is really not “when,” though, but “why?” Okay, there are several official explanations. Struggling with massive losses, Ford has certainly been facing some cash problems. And, say executives put on the record, “Aston is a distraction for management.”

Yeah, sure, I guess. But maybe not. Once upon a time, it really was a distraction. That was a quarter-century ago, when the legendary Deuce – Henry Ford II, if you prefer – bought Aston for a pittance in order to keep it alive. The company was an unquestionable basket case back then. At the news conference announcing the deal, a quick-thinking PR person duct-taped an industrial-sized diaper to the bottom of the engine of an Aston that had been rolled into Glass House. It was probably a good idea not to have us media scribes see the flood of oil that had been leaking out of the only Aston they could find in the state of Michigan.

But the fact is, Aston’s quality has improved dramatically in recent years, even as its product line has mushroomed. Sales, meanwhile, have outpaced almost anything else on the market. Okay, at about 7,000 cars a year, Aston isn’t a threat to big name marques, like Mercedes, but that’s still a 20-fold growth since the mid-1990s. (And in the immediate years after Ford purchased the British brand, Aston sales had plunged to barely 50.)

Aston is a largely self-contained operation, which is one of the things that makes it so appealing to a new owner – and the fact that it is actually now in the black, one of the few Ford brands that can make that claim.

As to the cash, even if the deal nets Ford an even billion dollars, that’s still just a drop in the bucket for a company its size. It would barely cover a season’s losses, or, put another way, would barely fund a mainstream product program. But Aston has been a real image-booster, especially since it returned to the limelight as the car of choice for silver screen spy James Bond.

Ask folks inside Ford and they’ll admit, almost to a man and woman, their disappointment in the decision to sell Aston off. “But it’s simply gone too far to turn back,” said one senior manager I spent a few minutes with tonight.

I just hope this isn’t an example of the sort of thinking Ford expects to use to get its fortunes turned around. The deal may make it look like a return to basics – but it seems more, to me, an act of impassioned desperation than cool logic. And that’s a real loss.

Prodrive founder drives £450m Aston Martin bid - Financial Times (subscription required)

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