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Restructuring of automotive components supplier CQLT SaarGummi

Case Study

Challenge

The restructuring request from the new owner in China could hardly have been bigger. Losses at SaarGummi were high, customer confidence was at rock bottom, the production facilities were outdated and costs were too high. On top of all that, one of the group’s production facilities had to be closed down. 

Success

Atreus rapidly and successfully implemented the restructuring to rescue this automotive components supplier. The staff council and employees joined in and the company succeeded in warding off the impending loss of reputation among key customers from the automotive industry and to sign some major orders. 

Interview with Michael Lorig, COO of CQLT SaarGummi

What was the situation at your company when you called on Atreus?

CQLT SaarGummi Deutschland was in the midst of a restructuring process when we parted company with our CEO. We called Atreus in because we had to make sure that work on the reorganization would continue without interruption. Just one week after the previous CEO withdrew from his post, Atreus came into the company with a manager in the position of CEO. 

 

"The Chinese parent CQLT had bought the company out of the insolvency. It now wanted to see changes being made fast."

You want to know what Atreus can do for you in a similar situation?
Contact Dr. Harald Linné, CEO.

+49 89 452249-200 Harald.Linne(at)atreus.de

Which skills were important?

The manager was a perfect fit for SaarGummi: a top manager with restructuring experience who could immediately work in the rubber, metal and automotive components industry. These were important requirements to be able to take on this difficult assignment: leading the company out of the red and restructuring the Wadern-Büschfeld site. 

Which special challenges awaited Atreus?

Following the sales crisis, the key challange was the fact that the capital and financing structure that had been chosen within a private equity operator model was not actually appropriate for the earnings situation. The Chinese company CQLT SaarGummi Deutschland then took the company over from the insolvency procedure, and of course wanted to see results fast. 

Engineer Michael Lorig has been COO of CQLT SaarGummi Deutschland GmbH since 2011. He is responsible for worldwide operations: sales and marketing, production, projects and applications engineering.

Michael Lorig

Engineer Michael Lorig has been COO of CQLT SaarGummi Deutschland GmbH since 2011. He is responsible for worldwide operations: sales and marketing, production, projects and applications engineering.

"The turnaround came quickly. Among other successes, the company soon won two major contracts from BMW and Daimler."

Immediate cost-cutting measures

  • Reinforcing customer contacts
  • Optimizing the organizational and production processes
  • 20% staff reduction
  • Recruiting qualified employees
  • Qualifying the existing employees
  • Optimizing the logistics processes
  • Improving service agreements
  • Analyzing price structures and price increases
  • Introducing innovations
  • … and much more

What was the lever for success?

Because of the strong focus on the insolvency, daily business had been neglected. When Atreus started at SaarGummi, it was losing €1.2 million a month. Not an easy situation to move into. Atreus quickly familiarized themselves with the circumstances, reviewed the existing strategy and compiled a new action plan and roadmap. In this way, the ongoing restructuring process could be continued without loss of time. At the same time, potential improvements and cost reductions could be identified. Atreus put together an action plan for each operational division, which contained potential cost reductions and stopped the outflow of capital. 

"Atreus gave the SaarGummi staff a new orientation for the company’s future, with a new organizational structure and leaner, innovative processes."

The fact that the measures introduced bore fruit can be seen in the big new orders that SaarGummi subsequently won.

...Yes. That is one of the factors that clearly shows the turnaround. SaarGummi Deutschland won two major contracts from BMW and Daimler, among others. In fact, the Daimler order was the largest individual contract in the company’s history. 

What were the negotiations like with the employees?

A constructive and amenable cooperation with the employer’s association, the unions and especially the staff council were absolutely essential. Despite all the change processes in the offing, Atreus managed to build up a base of trust among employees. Together, they worked towards the goal of securing the future of the long-standing company SaarGummi. 

Atreus is the leading interim management provider in Germany and one of the largest in its field in Europe. We solve difficult operational management and transformation problems quickly and reliably. Contact us and find out how we can help you master your situation with management expertise that is available at short notice and that is the perfect fit for you.

Atreus is a co-founder of Globalise – the market’s leading and largest provider of international interim management. Accelerating change and delivering success. Worldwide. Structured as a global group of leading interim management firms, Globalise has the reach to support you in solving your company’s most important issues around the world.