Aston Martin Rises 2% On Hiring News – A Hint At Tomorrow’s Results?

Aston Martin Lagonda (LON: AML) shares are up 2% on the news that the company has started to rehire workers at the plant in Wales. This is the factory that makes the DBX model which is the core offering – as far as Aston’s corporate finances go at least – for the company. So, it’s not too much of a logical leap to think that if the workforce is expanding, then orders for the DBX are looking good and therefore so are the core prospects of the group.

We’ve looked at Aston Martin before and the story is beset by uncertainty. After all, the car business itself – that’s the Aston business, not this current corporation – has gone bust so many times even newspapers have difficulty in keeping the number straight. Being an independent manufacturer of high-end cars is simply a difficult thing to do. Near all of the other high-end manufacturers are a part of larger groups that help to carry the investment burden.

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We’ve also seen problems with delivery times of the Valkyrie hypercar although Aston Martin does say that this is just a timing issue, the entire production run is sold.

There are reasons to think that the troubled times are past for Aston. The deal with Mercedes for engines – and bringing them on as a shareholder – reduces the development costs of engines for example. Sales are spread globally, China is the second-largest market. Aston is working on EVs, they’re keeping up with the times.

So there are positives. But it’s also true that the finances of the group seem to depend upon the success of the new SUV offering, the DBX. That’s hoped to be the breakout product that provides some volume in both sales and cashflow after all. So, with results intended to be released tomorrow any scrap of information about the performance – in a business sense – of the DBX is to be welcomed.

Which is just what we’ve got. In the hard times last year, Aston Martin cut 500 jobs – including 95 at the St Athan plant by Cardiff Airport where they make the DBX. Now that’s being reversed as they look to add 100 “skilled automotive technicians” to the workforce there.

Yes, indeed this is scraps of information. But then that’s what building up a view of a company is all about. Keep adding small pieces together in order to be able to create a view of the corporate prospects as a whole.

Of course, we’ll know more about past performance tomorrow with the results announcement. But hiring practices are a guide to expectations about the future. Aston needs the DBX to be a roaring success. That they’re hiring more people to make the DBX isn’t proof that it will be but it’s also not a signal that it isn’t now, is it?