This $40 million, family-owned automotive supplier had recently entered its third generation. After enjoying approximately 60 years of profitability, it began losing money. “The company was bending over backwards to please its primary customer, who strongly urged the company to follow them overseas,” says Tim Weed, a partner with Plante & Moran’s Restructuring & Turnaround Practice. “That overseas expansion resulted in significant losses—between $1 million and $3 million for three consecutive years.” Deteriorating bank relations and an inappropriate focus on top-line growth compounded these losses. It was clear the company needed help.

Enter Plante & Moran’s Restructuring & Turnaround team, which performed a strategic analysis of the company’s underperforming divisions and facilitated a cross-functional turnaround team to identify additional cost savings. “We reviewed the customer and profit line profitability, assessed the company’s SG&A, and evaluated management performance against the stated objectives,” says Weed.

As a result, the company replaced a majority of its European staff, including the head of European operations, which dramatically reduced costs. Plante & Moran prepared due diligence and assisted in negotiations to sell the company’s underperforming division. In addition, bank fatigue led to a request for a replacement lender, which Plante & Moran successfully negotiated. “In the end, the company achieved 8 percent operating income the following year,” says Weed. “Today they continue to thrive.”