The economic crisis hit the automotive sector right between the eyes. The Stuttgart-based Steinbeis Consulting Center for Corporate Evaluation and Rehabilitation visited a variety of manufacturing clients with close links to carmakers. Their objective: to develop strategies for coping with current economic challenges.
In all companies visited already had simple instruments in place to cut costs: agency staff had been laid off, untaken leave and time in lieu had been used up, almost all factories were on short time. Most firms had also done what they could to keep materials, stocks and expenses to a minimum, to match the expected dip in sales. They were talking regularly with their banks and adapting reporting procedures. And almost all were – at least in principle – in a position to use a second source of finance in an emergency.
During the interviews, one of the first questions was what other measures could be taken to prepare for an even deeper recession. Here, the experts from the Steinbeis Consulting Center drew inspiration from a Chinese proverb – when the winds of change blow, some people build walls, but others build windmills – and worked out coping strategies together with their clients to steal a march on the crisis.
The measures they came up with were by no means exhaustive but they did provide pointers which could also help mediumsized businesses in other areas. Ideas spanned all fields, from changes in production to pricing, customer services and even innovation management. Of course, it is vital for manufacturing companies to be supported by an expert in all aspects of crisis management when implementing measures. One place to turn to for help is a Steinbeis mentor.
The catalog of measures, based on a wide range of discussions, shows that there is no panacea for all ills during an economic downturn. The name of the game at the moment is to secure key resources to guarantee a position at the head of the pack when things improve. Firms also need excellent employees, quality products and services, marketing that makes a mark, a powerful sales division and a bank that listens and cares. The medium-sized companies that Steinbeis interviewed were currently discussing with their banks ways to adjust the burden placed on finances by accrued interest payable. Because at the moment, debt rescheduling, reduced liabilities, and interest adjustments are just as important as project funding.