Aston Martin shares jump on manufacturing resumption announcement
Production of crucial DBX model to resume in May
Aston Martin Lagonda (AML) saw its stock surge in Friday trading after it announced plans to resume manufacturing.
The British car manufacturer’s share price closed up 9.67 per cent at 58.95 pence at the end of the week, with investors buoyed by the prospect of business activity resuming after the havoc wreaked by the Covid-19 pandemic.
Aston Martin stated that it would reopen its factory in St Athan, Wales, on 5 May, hoping to step up production of its DBX. The success and long-term survival of the legendary carmaker depends to a great extent on the new sports utility vehicle.
While its share price might have fallen by more than 56 per cent in the past three months, Aston Martin was already in deep trouble before the Covid-19 pandemic. In late January a consortium led by billionaire Canadian businessman, Lawrence Stoll, saved the carmaker with a £500m ($616m, €571m) rescue deal.
Along with new social distancing measures to ensure worker safety, Aston Martin’s CEO and board members have announced that they will take a voluntary 35 per cent pay cut as the company gets back on its feet. Other executives at the firm will see their pay drop by 20 per cent, in line with the reduction for workers furloughed under the British government’s job retention scheme.
Confirmed cases of the novel coronavirus in Europe now surpass 1.3 million, with around 118,580 deaths. In order to limit the spread of the virus governments across the continent declared states of emergency and imposed lockdowns, shuttering non-essential businesses.
Before the virus’ arrival in Europe, European car manufacturers were already struggling as a result of the outbreak. The lockdowns imposed across much of China severely disrupted global supply chains. At one point Jaguar Land Rover (JLR) flew essential parts from China to British factories in suitcases.
Britain’s biggest carmaker also announced plans to gradually reopen some factories by mid-May.
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