Situation

$100M+ subsidiary of $3B public medical device company. Subsidiary business unit developed, produced and sold materials and equipment globally. Business unit in heavy sales and profitability decline due to an industry shift from analog to digital techniques. Business unit had not made the necessary portfolio or infrastructure changes to adjust with the industry. Certain product lines required significant ongoing financial commitment with a very low return and very poor prospects for long term competitive success. Other core product lines in decline had not been supported with effective cost out engineering.

Action

Developed and implemented a plan to dramatically reconfigure the business including portfolio pruning, factory closures and downsizing of a bloated commercial organization. Plan was implemented within the normal German works council engagement framework.

Result

Converted the subsidiary P&L from a loss position to profitability with $10M in savings from rationalization efforts. Time from announcement to completion was 24 months.