Move all equipment and processes in groups spaced three weeks apart to allow time for training and transition on both ends. Entire operation needs to be moved to enable customer to close the facility in only 10 weeks from the start of the project. 

This fast transition is necessary to enable customer’s employees to move to new jobs at a nearby facility while they are available. Timing and employee relationships are critical. The existing operation is unionized, adding complexity. 

Mission Accomplished.

Customer is delighted with results and awards client with another large $25 million/year contract for a second manufacturing facility.   

New division is profitable for the client within 6 months.

ClearStone International

Clear Solutions. Solid Results.

Due to the specialized nature of the products being produced by the client for the customer, the original pricing had been developed with input from the customer…but perhaps selective input.

There is going to need to be an adjustment in the pricing, and/or a higher volume commitment from the customer, since the client cannot continue to lose money.

The customer cannot commit to higher volume and will fight a price increase since they based many business decisions on the agreed to pricing. 

Our client made an investment of over $15 million based on a return that has become negative once operational. Neither party is happy. A battle is soon to develop.

It’s time to open up and bare it all. A difficult situation such as this where each party is convinced their information/opinion is the truth, is best handled by engaging everyone to work through the problem and the data together as a team instead of arguing over differences.

We requested the customer provide it’s best two individuals to work together with the client for several weeks full time to mutually create a business plan for the most efficient (but possible) operation producing the product, as requested and specified by the customer.

Once the costs to run the operation were mutually agreed upon, the customers’ volume commitment determined the final new pricing.

Mission Accomplished

The client’s business immediately turned from losing money each month to making money, including a built-in return on investment.

The client’s customer was also pleased with the outcome as they realize the supplier (our client) must ultimately be paid their costs plus a reasonable return to survive long-term. By jointly working together to build the business plan, the customer was also convinced that they were paying the least possible cost, even though it was higher than their initial (incorrect) estimate.

ClearStone International

Clear Solutions. Solid Results.

The customer has grown to become the client’s largest customer at one specific facility, providing approximately 60% of the facilities’ total sales. The client feels they cannot lose the customer short term but cannot continue being consumed with this customer and losing money.

In such a situation, it’s best to play hard ball. It’s better to have it out sooner rather than later. The more time that passes, the money has been lost and the client cannot focus on other opportunity.

We presented all of the data to the customer to properly justify the price changes/corrections.

We made every effort to resolve the situation in a positive manner, although the client unfortunately had to temporarily shut down the customers’ production and shipments, so they knew the client was serious.

Mission Accomplished

Client obtained a price increase of over $2 million per year, tooling was repaired, and they maintained all of the existing business until programs came to a natural end-of-life, 3-8 years later.

The additional cash flow from the price adjustment ensured the client’s success, including providing time to transition away from this lower margin type work to a higher margin, value added, product focus.

The aggressive customer was not happy and did not source new business with our client…but that’s ok, you don’t need customers that cost you more than they pay.

ClearStone International

Clear Solutions. Solid Results.

Evaluate the workload and skill set of all employees and keep the best for the company. Transfer knowledge and job responsibilities from those replaced to those assuming new responsibilities.

Reevaluate management and determine the most functional and cost-effective organizational structure.

Above changes and action items should exceed in total the required reductions by an additional 20-30% to ensure the goals are achieved.  

Implement the changes. Get it done.

Mission Accomplished

Client’s business was rightsized with cost savings exceeding the targets. With a higher concentration of the best people, the facility ran better than ever and was able to regrow sales without adding back the proportionate amount of people.

ClearStone International

Clear Solutions. Solid Results.

Negotiate the acquisition of the facility from the customer as well as a long-term supply agreement. Acquire the facility and all equipment. The facility produces more than $50 million per year of product.

Hire and retain all necessary personnel.

Secure all necessary financing and equity to acquire the facility and equipment and finance the operations of the business.

Project manage the transition of facility ownership, operating systems and ensure absolutely no production issues when transferring ownership and operations from customer to client.

Mission Accomplished

The facility and operations were successfully acquired by the client who has grown the facility to be their flagship operation. The client became the sole dedicated supplier to the customer for over 15 years until the product life cycle came to a natural end.

The facility acquired by our client diversified into other markets and now has over 25 key customers, instead of one. The employees have also had their employment extended for over 16 years since the customer announced their original plans to close the facility.

ClearStone International

Clear Solutions. Solid Results.

The client is a tier one automotive supplier. Its largest customer is one of the largest OEM’s, not known for its patience with suppliers. 

The client fortunately has a fantastic operating performance of consistent zero PPMs.

Solution is to approach the OEM customer’s risk management group and request their assistance to help the client refinance to a different lender. Provided data to support the client’s request as well as its excellent performance record.

Mission Accomplished

A temporary loan agreement was structured between the client and the customer, enabling the lender to be paid off. The customer was repaid in full by the client. This provided a bridge to the client to refinance the remaining debt under attractive terms. 

The relationship with the customer ironically improved with this situation leading to securing significant business for both of the client’s other facilities. 

The difficult lender who took advantage of the client and the situation went out of business shortly thereafter.

ClearStone International

Clear Solutions. Solid Results.

Mission Accomplished

Since the client was carrying too much debt from 2008/2009, its balance sheet and financial ratios made it near impossible to find a new lender.

The FDIC was approached with the reality that the client would only be able to move a portion of its debt.  

In the end, a large portion of the debt was forgiven, significantly improving the client’s balance sheet and enabling a new beginning for the client.

Established a relationship with a new lender out of Chicago that was excited to finance the client with the reduced debt amount. Also reduced interest rates by over 3% from the rates with the prior lender.

Handled correctly, even what appears to be a bad situation can potentially have a good outcome.

ClearStone International

Clear Solutions. Solid Results.

It’s impossible to predict the future, so we have found it best to create pricing arrangements with customers that fluctuate up or down with steel or other commodity prices on a quarterly or monthly basis.

Using this method, the pricing is always fair for both the supplier and the customer. Neither party is taking a risk or gambling on the future unknown market.

Mission Accomplished

Revised sales and pricing agreements with the client’s largest customers were negotiated and implemented. The pricing agreements include formulas to properly account for changes in the steel and scrap market.

Immediate improvement of over $1.5 million per year in pricing, representing approximately half of the problem. Additional changes were made by our restructuring and vendor management team, saving an additional $1.75 million per year with other changes.

ClearStone International

Clear Solutions. Solid Results.

When this issue was corrected, the company was over $1.0 million overdrawn on its credit line. The bank placed the company in default, offered a short-term forbearance agreement and considered pulling the line.

The mission is to maintain the relationship with the bank and correct the contra and overdrawn situation as rapidly as possible.

Prepare a detailed cash flow statement with weekly conformance tests to determine when additional payments can be made to the bank to slowly bring the credit line back into compliance.

Mission Accomplished

Due to the clients improved cash flow accuracy and consistency is paying the overdrawn amount down, the bank worked with the client and provided sufficient time for the client to correct the overdrawn situation. The client progressed to better circumstances and later sold the business.

ClearStone International

Clear Solutions. Solid Results.

A large automotive Tier 1 supplier was struggling with capacity, equipment and tooling issues, and outsourced a large volume of business to the client. 

The Tier 1 customer also required the client to purchase steel from its steel suppliers at agreed to pricing. These costs were to be charged back to the customer with no mark-up. 

Based on the conversion price (non-material price) obtained per part produced, it seems like a highly profitable piece of business. 

As the work is transitioned in, the client begins losing money with no end in sight. The tooling is in terrible condition and there is no time to repair the tools due to the customer already very late to their OEM customers. 

The client begins working seven days a week, inadvertently putting less focus on other customers and starting to fall behind with other shipments. 

The Tier 1 customer is also completely disorganized regarding its orders, schedules, steel supply, and even keeping track of who owes who, creating an accounting nightmare and constant disagreements.

The client also learns this same tooling has been to many of their competitors over the years and caused problems everywhere they went.

Mission Accomplished

There is only one solution for a customer that treats their suppliers this way. Get rid of them as fast as possible. 

Within one week of involvement at the facility, a trip was made to visit the Tier 1 customer’s President. 

After confirming they would not work together to fix the situation and repay the supplier for the costs incurred keeping them from missing shipments to their customers, the customer was fired and told to pick up their tooling the following Monday. 

Not another moment must be wasted on this customer. 

The client returned to focusing on its other paying customers and reversed the losses of over $200k per month incurred with this ‘new business’. 

ClearStone International

Clear Solutions. Solid Results.

Mission Accomplished

A study of the critical supplier yielded price increases of over 30% per year, often spread over quarterly adjustments. This ‘gradually’ tripled the pricing over five years.

The price adjustments were supposedly tied to a specific commodity index, but after further review, the commodity pricing index had hardly changed over the five years.

After learning about the industry, competitive pricing, commodities that impact the pricing, and seeking specific legal advice regarding key contract language, the contract was terminated by the client and a new agreement negotiated with the supplier for five years at less than one-third of the current cost, a sizable six figure savings every year.

We were also able to negotiate reimbursement from the supplier for a portion of the amounts ‘overcharged’ equal to almost two years of free supply of products.

There is usually a way to change anything. Just have to know where to look, and how to ‘ask’.

ClearStone International

Clear Solutions. Solid Results.

A complete review of the employee benefit package revealed that significant savings could be achieved by moving to a self-insured platform for group healthcare and some of the ancillary coverages such as Dental and Short-Term Disability.  

The company’s risk was managed by aggregate and specific stop loss coverages.  A Third-Party Administrator was contracted to administer the claims.

Implemented an annual wellness fair where employees had the opportunity to get screened for things like high blood pressure and diabetes to hopefully catch some diseases before they became a devastating illness.  

Implemented on-site flu and pneumonia shots available for all employees to promote a healthy work environment and reduce absenteeism due to illness.

Mission Accomplished

The employees appreciated our client’s interest in their well-being and the improved benefit plan without an increase in cost.  The company realized significant savings by moving to the self-insured platform versus guaranteed cost and was able to provide better benefits to its employees.

ClearStone International

Clear Solutions. Solid Results.

Goal is to maintain the current ownership and employees from the acquisition to remain and continue with the merged business, controlled by our client. 

Manage the entire process to ensure a successful acquisition and integration, including:

• all due diligence, 
• legal agreements, 
• transition planning and execution, 
• equipment consolidation into client’s building, 
• reorganization of processes and workflow in client’s facility, 
• accounting system transition, 
• ERP system and inventory, 
• quality system requirements, 
• customer requirements and relationships, 
• supplier relationships, 
• and all employee / HR  requirements and relationships. 

Mission Accomplished

All of client’s objectives were successfully achieved with the acquisition and integration.

The entire process from start to Closing took six months. Complete move and consolidation of the business after Closing completed in two months. 

A positive profit and contribution is achieved from the newly acquired business unit within three months from Closing, simultaneous with completion of the integration.

ClearStone International

Clear Solutions. Solid Results.