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Case Study 1 min read
Restructuring and negotiation advisory services secures $1M cash assistance and repairs customer relations for automotive supplier.

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The client 

A formerly high profit $50M auto supplier with a high concentration of sales to one OEM requires intervention to rescue failed consolidation.

The challenge

A poorly executed plant consolidation resulted in late deliveries and quality problems for the auto supplier’s key OEM customer. The company’s management initial mitigation plan included adding temporary employees, increasing overtime, and deploying expedited freight carriers to maintain deliveries to their customers. The company began experiencing severe losses and liquidity problems. 

The solution 

Our restructuring experts helped the company identify additional costs and ultimately calculate the cash “hole”. While working with the company’s management and outside attorneys, we developed a negotiation framework which included customer accommodations. This formed the basis for a series of negotiations that ultimately led to an agreement that ensured continued production for the OEM, as well as financial considerations for the automotive supplier. 

The benefit 

With our help, the company was able to secure less than $1M in immediate cash assistance from the OEM customer, as well as, interim price increase to bridge the return to normal operations. The supplier ultimately stabilized its operations and cash flow, and remains a viable supplier for all customers.