Tier II Auto Supplier

Company Overview

Tier II Auto Supplier - A leading manufacturer of precision insert and injection molded thermoplastic parts with revenues of $60 million, operating in two facilities in the Midwest as well as Mexico and Asia.
Engagement Overview

•  The Company was operating in a very serious liquidity situation and engaged FDP to review their strategic reorganization plan and cost reduction initiatives.

•  FDP's review and analyses included:
•  Reviewing management's plan to consolidate their plants
•  Assisting management in quantifying the capital required to consolidate the plants
•  A review of the Company's 13-week cash flow forecast to determine the capital needed to cover operating losses
•  Preparing a monthly financial forecast to determine if the profit improvement initiatives are sufficient to cover forecasted operating losses

•  Working closely with management to prioritize strategic initiatives and develop tactics to improve cash flow and profitability:
•  Assisted management in identifying duplicate operating and personnel costs as a result of operating two facilities
•  Assisted management in identifying and negotiating sales price increases with a key customer
•  Assisted management in preparing for and executing a significant reduction-in-force
•  Assisted management in identifying sources of capital necessary to cover forecasted operating losses

•  Determined that management should close one plant and consolidate it into other existing plants.

•  Estimated that the consolidation of the facilities would result in annual savings of approximately $2 million.

•  Negotiated a price increase with a Tier I auto supplier of more than $1 million annually.