Results Results

Tier 1 Supplier Averts Meltdown
Leadership Through Expert Interim Management

Client
A Tier-1 automotive supplier and acquisition candidate.

Issue
Declining sales, excess capacity, financial difficulties, CEO vacancy.

Newmarket's Role
Initially retained to assess the opportunities for the client and assist in the development of a logical business plan to support the sale of the company. As the sale process unfolded, Newmarket provided an interim CEO to manage the Company, interface with suppliers, customers, the bank, the union, and prospective buyers. During Newmarket's tenure, sales were increased, quality improved, and costs were reduced. The company was ultimately sold in a secured party sale with full recovery for the bank.

Implementation

  • Liquidity management: Aggressive on-site management of cash flow and cost position. Steered company to a positive cash position, reduced and/or eliminated costs. Made investments only in support of direct new sales efforts.
     
  • Creative customer management: Secured selective funding of materials and inventory by OEM manufacturer to assure continued service.
     
  • Quality Control: Reduced PPMs to single digit rating.

Key Element: Managing Stakeholders with Widely Divergent Agendas

  • Customers: Maintained high levels of quality and service, achieving 100% on-time delivery.
     
  • Creditors: Effectively forestalled disruptive actions through aggressive negotiations and regular, on-time payments.
     
  • Bank: Built strong working relationship with the bank to manage cash flow. Paid off $4 million working capital line from operating cash and creditor loans of $900k.
     
  • Union: Established productive relationship with union president to maintain membership work attitudes. Transferred union pension funds to regional union management without cost or liability to the client.
     
  • Shareholder: Preserved shareholder's ownership position and protected him from outside claims. Successfully transferred leased assets to the acquiring company with removal of personal guarantees, without cost to the Company.

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