Turnarounds--Renaissance consultants

Turnarounds and Crisis Management

As management consultants acting as interim management or crisis management in turnarounds, a restructuring and action plan must be prepared and implemented immediately with a goal of positive cash flow generation. Below is a case history illustrating Renaissance consultants' success in turnarounds.

Type of Company:	Manufacturer of tape
Type of Ownership:	Public
Position:	Interim Management--Crisis Management

Problem:	Company had both serious manufacturing and quality problems. The company was losing 15% pretax. Manufacturing management was weak and permitted an aggressive union to run the company. The union dictated restrictive work rules, encouraged featherbedding and other practices that impacted productivity. Problems were exacerbated by a labor contract that prevented company management from exercising normal management control, including its right to manage the work force.
Action:	Hired with a mandate to stop the losses quickly. A comprehensive action plan was developed and implemented including exercising management contractual rights permitted under the labor agreement, preparing for upcoming union negotiations, and preparing a contingency strike plan.
Results:	Negotiated a new labor contract with the union regaining management control of the plant. Reduced overall operating costs 25% at the gross profit level. Operation was made profitable (10% pretax) and sold.