Ulrich Bez steers Aston Martin past trouble

It had been an extremely bad week for Aston Martin, the once-failing British sports car maker that went through a miraculous make-over to re-establish itself as an iconic marque - and to return to profit.
  

Aston Martin V12 RS
Top class: the V12 RS, a recent high-powered Aston Martin concept

First it was targeted by the former chairman of Shell, Sir Mark Moody-Stuart, who decided that all gas-guzzling cars that do less than 35 miles to the gallon should be banned. Aston was the only sinner that Moody-Stuart mentioned by name. "We need very tough regulations saying that you can't build or drive something less than a certain standard. You would be allowed to drive an Aston Martin but only if it did 50-60mpg," he said. Aston Martins currently average 17-18mpg.

Then there were potentially destabilising rumours that the company was about to do the unthinkable and pair up with Mercedes. Worse still for petrolheads, was a suggestion that the expensively-restored brand-name - majority-owned by two Kuwati investment funds - could be used to adorn high-street luxury goods and real estate.

The funds bought the company from US giant Ford in a £500m deal last March and Ulrich Bez, chief executive and saviour of Aston Martin since taking the wheel in 2000, was persuaded to stay on after the sale. But now he is being forced to defend the company he loves.

Bez said: "Sir Mark had lots of years in the oil industry. The fact that he only steps up now disqualifies him. Are we going to say that all windows must be double glazed or that no one must take more than five showers a day? Some things have to be left to a personal responsibility."
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Fast, expensive fuel-hungry cars are obviously going to attract hostility when political leaders such as the Mayor of London choose to centre the carbon dioxide debate on them. Bez takes an original position: "The water of the world is far more of an issue than air quality. We already have an air quality in the West that gives us an average life of 70 years. In Africa it is 40 years.

"We do our bit to help out in Africa and support a Unicef programme that promotes road safety for kids."

Bez was speaking at length for the first time since the new owners took over 10 months ago.

Adham Charanoglu, business development manager for Investment Dar, one of the Kuwait funds behind Aston Martin, set the hares running when he told Reuters news agency that there had been talks with Daimler - where it owns 7pc of the shares, as well as with Louis Vuitton and Gucci on branded merchandising.

The link to Daimler sparked a stream of speculation about sharing platforms or engines with Mercedes - spelling the end of Aston's proud independence.
  
Ulrich Bez steers Aston Martin past trouble
Ulrich Bez: we've been profitable since the last quarter of 2005

There was an implication that the new consortium was feeling the pinch or that the profitability of the business was dropping

"There is nothing in my five-year-plan that allows for sharing with other makers," Bez said. "Our lightweight aluminium platform is better and made more easily than that used - or to be used - by any other company."

He is just as rigid on preserving the attraction of distinctive engines and points out that Ferrari's success is heavily dependent on its own engines. "We have our own technology and structure and our own platform. We do not have any reason to go and change. The architecture of the cars has low investment and low initial cost and we have got away from relying on Jaguar platforms and components."

He concedes however that he talks to suppliers and other manufacturers routinely. "Now that we are free from Ford we can talk to anyone about requirements," he said. Bez is the complete car buff with skills behind the wheel that rival those of James Bond - due to back behind the wheel of the British car in his next film.

If he wishes to, he can lock and unlock his Aston by pressing the dial of his Jaeger LeCoultre watch. Two years ago, at the age of 62, he was one of the team that drove an Aston V8 Vantage to a finishing place in the Nurburgring 24-Hour endurance race.

Born two years before the end of the Second World War in the spa town of Bad Cannstatt near Stuttgart, he has an engineering doctorate and holds several patents in critical areas of car design. He was the project leader on the Porsche 911 Turbo, the Carrera RS 2.7 and the BMW Z1 amongst others.

So is there any sign of softness in the market for fuel-hungry exotic cars? Categorically not; or not yet anyway. The business is investing hard to get more cars out to fulfil waiting lists. "DBS is sold out for the year. Our target for the year is to get a productivity increase of 3pc-5pc and we do not yet know how we will do that," he said.

That would yield around 7,700 cars compared with 6,800 in 2006 - the first full year of profit. Complexity is crowding in as the cars get more and more sophisticated, and they take longer to build. There is investment for the paint plant to increase its capacity. The design engineering department has grown tenfold to 330 staff in the last eight years and a customer and engineering centre will open at the Nurburgring in May.

What will exacerbate the congestion is the arrival of four-door saloon, the Rapide - already undergoing cold-weather testing in Sweden. There is a strong possibility that its assembly will be outsourced to one of the four big subcontract assemblers - Valmet, Karmann, Magna-Steyr and Pininfarina, which are all showing interest.

Are profits still growing? Aston Martin has not yet published its 2007 financial results but Bez says: "Usually when there is a change of ownership you can say that a company will go through a difficult time for a year or two. We have not seen any of that. We have not lost any of the motivation that we had under Ford where we were a very enthusiastic team. We have been profitable since the last quarter of 2005 and we have increased that profitability year on year."

Aston Martin has an unusual board structure but it works well, says Bez. "I have board meetings every two months and I run it like a public company." David Richards, another maverick character and obsessive car man, is the chairman. He is the owner of Prodrive and was the proprietor of the BAR Formula 1 race team with Honda.

He also runs the works rally team for Subaru. Ford retains a seat on the board to look after the £40m it is said to have left in the company, but it is not a shareholder.

Investment Dar and their Kuwaiti running mate, Adeem Investments, also have two seats each.

At the time that Investment Dar, a listed company, filed its accounts up to September 2007, an auditors' footnote said that the final purchase price had not been settled but that £240m has been paid on account towards an assumed £500m.

The final shareholding structure was not due to be resolved until the end of last year, risking possible boardroom disagreements as all these parties nailed down exactly what they own. So, has it now been resolved? Bez declined to give shareholder proportions but admitted cheerfully that he had his share. How much?

He's not saying; but the amount is clearly interesting - he has signed on for another five years.