Andy Palmer’s bumpy ride: from supercars to battery buses | Automotive industry
When Andy Palmer left school at 15 to become an apprentice draughtsman – helping design car gearboxes – he quickly caught the automotive bug.
“By the age of 21, when I came out of my apprenticeship, I wanted to be the CEO of a car company, which was extraordinarily arrogant,” he recalls as we talk in a London hotel restaurant. Four decades on, he made it, taking over in 2014 as chief executive of one of the UK’s truly world-famous brands: Aston Martin, sports car maker to James Bond.
What happened next was probably not part of Palmer’s dream: after organising a successful turnaround plan he led the company through a flotation that quickly turned sour, pushing the carmaker to the brink of its eighth bankruptcy in 105 years, even as it boldly launched a new SUV. He was unceremoniously pushed out in May 2020 following a financial rescue led by the fashion billionaire Lawrence Stroll.
Palmer could have laid low and licked his wounds, using the pandemic as cover. Instead, he used the time to do something fairly startling: stepping in to lead an unheralded Yorkshire bus manufacturer and quietly turning it into a $1.6bn (£1.2bn) business. The company, Switch Mobility, formerly known as Optare, says it is now aiming to be the “Tesla of buses and vans”.
Palmer grew up in the West Midlands, the UK’s traditional automotive heartland, and says his interest in carmaking was piqued when his father, a manufacturing engineer, gave his son a knackered old Mini engine to take to pieces. After his apprenticeship, he moved to British Leyland, from where he was headhunted by Nissan UK.
He thought he would stay there a few years and return to work in a British company, but after the breakup of British Leyland there was no home industry to return to.
He ultimately spent 23 years at Nissan – the latter 13 in Japan – and played a key part in making the Nissan Leaf the first mass-market electric car to be built in Europe (in Sunderland, more precisely). He eventually rose to become a “samurai” under former chief executive and chair Carlos Ghosn, who later gained notoriety with the business world’s most famous flight from arrest.
Palmer acknowledges his former boss as a huge influence and says he was a genius at simplifying problems. Yet as Ghosn gained more power via an alliance with France’s Renault, Palmer found himself covering more and more for the “naked emperor” at the top. “What I saw was a guy who started to become disconnected from reality,” Palmer says, pointing to Ghosn’s regular use of a Gulfstream G550 private jet and his failure to visit Japan promptly following the devastating tsunami of 2011 – although he says there were no clues about the allegedly concealed income.
In his next car industry post, Palmer learned a lesson in the importance of narrative, especially for a public company. When he took over Aston Martin in 2014, he says, it was unprofitable, three months from bankruptcy and had been valued at just £420m. When he left in 2020, it was valued at £2bn – but had floated at £4.3bn.
“If you tell the story of going from £420m to £2bn, it’s an amazing turnaround,” he says. “If you’ve taken it from £4.3bn to £2bn, that’s a different story altogether.”
Palmer holds up his hands when asked about the endgame at Aston – much of which is covered by a non-disclosure agreement. Yet it seems clear he thinks the owner at the time, Italian private equity firm Investindustrial, has questions to answer. It wanted to cash out, and wouldn’t wait, which left Palmer with a dilemma.
“Do I just quit, or do I try to make something of it?” he says. “That question still exists in my mind: what was the right thing to do?”
The initial public offering did not provide cash to the business, so when the costs were higher than expected, it was exposed, and the glare of public markets meant there was no room for error.
“I will never put myself in the position I was in at Aston,” he says. “My goal now is always to work where there is available liquidity – and to work for people I like. Life’s too short otherwise.”
Age 58 Family Has a daughter with wife Hitomi, whom he met at Nissan in the UK, and two more daughters and a son from his first marriage. Education Kineton school, near Gaydon (“I barely went”) followed by apprenticeship at 16. Returned to studies at 21, earning an industrial management degree on evenings and weekends at the Lanchester Polytechnic, now Coventry University. At Rover he completed an MSc, and at Nissan he completed an MBA and a PhD part-time from Cranfield University. Pay “My Aston salary was on the record, so I was on £1.2m and bonuses and what have you. I earn more now than I did then.” Last holiday Two and a half years ago (pre-pandemic) to the Maldives. Best advice he’s been given “Listen” – the quietest people in meetings can have the best ideas. Word he overuses “Not one that you can print … but ‘work, work, work’ according to my kids.” How he relaxes Sitting in his toolroom working on clocks and a motorbike, listening to punk and rock music: the Clash, the Sex Pistols, Bob Geldof, Siouxsie and the Banshees, the Jam.
Switch Mobility is a different proposition. In a pleasing coincidence, it is majority-owned by Ashok Leyland, the Indian conglomerate that has absorbed (via a circuitous route) parts of the British Leyland empire. Palmer was approached to start consulting work there a day after leaving Aston Martin, and took over as chief executive in June 2021.
If the past 18 months have been better for Palmer, the same can’t be said for his former company. Aston Martin Lagonda is languishing at a valuation of £1.3bn, or $1.8bn, just $200m more than Switch, which is in the middle of raising £200m. It is not inconceivable then, that a rise in its valuation or an Aston Martin stumble could see Palmer’s new employer overtaking his old one.
“I won’t say I haven’t thought of that moment,” Palmer says.
Switch took the old Optare bus business and combined it with a faltering Ashok Leyland electric vehicle division. “Had it been Optare by itself,” says Palmer, “it would probably have died, but we were able to stabilise Optare because we’ve got India now starting to really bubble.” The firm has just taken a major electric bus order from Bangalore.
From nine engineers in the UK when he joined, Switch now has 100, with 300 in India. A factory in Spain will eventually employ 2,000, although the 300 workers at the Leeds factory will still make buses and, eventually, vans.
Switch buses and vans will initially use batteries made by Austrian company Kreisel, but Palmer has had talks with both Envision, now owner of the Sunderland battery factory he started, and Britishvolt, the startup which is building a gigafactory in Northumberland.
Palmer has become an electric vehicle evangelist, meeting council leaders and trying to sell them electric buses. Switch vehicles are more expensive than ones from Chinese rivals such as BYD, but, crucially, he claims his buses have net zero emissions during their life, including production – although for now that require buying carbon offsets.
He spots a chance for the UK to undo some of the ravages the car industry has suffered. “This is your one opportunity in many lifetimes to rebuild an industry that used to be number two in the world, and is now number 15,” he says. “How stupid would we be to then give that all to the Chinese?”