Company Turnaround

Project Details

We assumed the VP and GM role of this company with current sales at $110 million and with an EBITDA of $4.75 million.

The business at the time was surviving on a very profitable patented Teflon hose business selling to three major US automotive OEM’s through tier one suppliers. The industrial hose and fitting business was marginally profitable in the US and in Europe, the majority of the business was automotive nylon fluid assemblies sold to major European automotive OEM’s as a tier one supplier at a significant loss. The remainder of the business was selling unpatented Teflon hose to automotive and industrial customers at a small profit.

Processes and Solutions

Our plan was to grow the business by using the company’s teflon hose technology and automotive supplier skill sets to move up the value chain in the heavy truck market. This plan was first started in the US with an objective of then being expanded into both Europe and Asia. We reduced costs through a short-term action plan by reducing quality, productivity, and procurement costs. A SWOT (Strengths, Weaknesses, Opportunities and Threat) Analysis was also conducted on all four segments and a strategic plan was developed.

Once we had this plan in place, our first task was to develop a focused global manufacturing team that used data to drive improvement and growth. Secondly, we needed to change the company’s culture to meet and exceed customer expectations. Our main objectives were to improve the company’s quality to a world class standard while also providing our customer’s technical needs. Lastly, we needed to develop low cost suppliers to produce a 0 parts per million (PPM) rejection rate at reasonable costs and quality levels.

Results

Within two years, the company was able to:

  • Pierce the heavy truck industry with sales of $50,000,000 in the US and $15,000,000 in Europe.
  • Attain profitability in the European automotive business by exiting low margin business.
  • Improve global industrial profits and maintained US automotive profitability.

In the end our improvement through manufacturing solutions was a major reason the parent company was able to sell the division along with a significantly underperforming tier one automotive division to a strategic buyer at much higher than expected multiple.

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