As Brexit looms, Mr. Bond’s favourite carmaker puts contingency plans in motion
Would James Bond support Brexit? Who knows. What we do know, however, is how the fictional superspy’s favourite carmaker feels about it: decidedly unsettled. Iconic luxury auto brand Aston Martin announced on Monday that it was triggering Brexit contingency plans to “cope with a potentially disorderly Brexit.” Those plans include hiring a new supply chain chief, preparing to fly components in to Britain, and using ports other than Dover.
Aston Martin’s share price has risen by 2% so far this year
Source: Yahoo Finance
Brexit is finally just around the corner – 80 days away, in fact. But the chances of a “no-deal” situation remain high, as Prime Minister Theresa May’s negotiated ‘Checkers Deal’ looks likely to be downvoted next week. And, if lawmakers do decide to vote down the deal, that makes disruptions to trade far more likely. Britain’s carmakers – amongst its most successful manufacturing industry – have warned against this possibility. And since they employ 850,000 people in the UK, they’re worth listening to!
Aston Martin’s CEO, Andy Palmer, said: “I don’t think we’ve been in a position in the last two years where we’ve been further apart from understanding where we’re going to end up. We program a car to align and order all the parts for those cars twelve weeks in advance. You don’t need to do the maths to know that therefore takes us across the Brexit period. We have to prepare for the worst-case scenario.”
Aston Martin had a “record” 2018, and is one of many companies looking to future-proof themselves against what could be a huge blow to Britain’s economy. According to Palmer, the company is less concerned by rising costs (as an iconic luxury brand, Aston Martin assumes a certain ability on the part of its customers to absorb costs). Rather, what worries Palmer is things like customs checks and delays. Unsurprisingly, he had less-than wonderful things to say about the politicians responsible for how the Brexit process is going. He said:
“Both the European and the UK politicians are not discharging the duty for which they are put in place which is basically to plan and bring certainty to allow the country to thrive.” However, politics aside, investors can rest assured that Aston Martin has initiatives in place to compensate for a worst-case scenario.
Dominion holds Aston Martin in its Global Trends Luxury Fund.
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