Aston Martin is trimming supplier costs as part of a cultural change as the UK sports car maker seeks to become consistently profitable.
Suppliers are being asked to reduce costs by 10 percent annually, said Aston’s chief financial officer, Mark Wilson.
Although Aston is a niche manufacturer, the company aims to adopt the best of large-scale automaker practices, he told me during a visit to the automaker’s single factory in Gaydon, England.
Suppliers will take money out anyway as they get smarter producing the same part repeatedly, he said. Aston now wants a cut of that saving. “That wasn't happening before,” he said.
Aston is working with its smaller suppliers to reduce production costs. For Wilson bigger suppliers, the approach is different. “That’s more a question of saying ‘look, I know what the rivals are paying, we want the same’,” he said.
Aston is undergoing a transformation under its new CEO Andy Palmer, Carlos Ghosn’s former chief planning officer at Nissan, who took charge of Aston in October 2014.
The company is thinking more like a mass-market automaker when it comes to cutting bills. Palmer has installed a system under which costs are scrutinized annually. “That’s not something historically we’ve had before,” he said.
He said Aston is focusing on anything in its new cars that doesn’t add value or is seen by the customer.
The cost of engineering and building the cars has been scrutinized. Practices inherited from Aston’s former owner, Ford Motor, have been ditched and new digital prototyping methods have enabled Aston to track down “lost man days” in different departments, Palmer said.
The automaker is cutting 295 jobs in the areas of sales, general and administration.
Employees are encouraged to be frugal with the company’s money. “We’re putting in place a culture of treating the business as if it was your own money,” Wilson said.
Travel costs are also targeted. Last year, I saw the evidence of that when returning from the Geneva auto show. I was in the economy cabin on the flight back from the Swiss city to London – and so was Palmer.