Bosal back in business after a successful pit stop
The miraculous resurrection of Bosal? René de Wit and Jos Zandhuis would not describe it quite like that. But it is a fact that Bosal has now - within the space of two years - risen from near-bankruptcy to an extremely healthy company full of optimism, capital for investment and with renewed customer confidence.
"The basis of this successful turnaround is collaboration," says Jos Zandhuis, partner at Boer & Croon. "Undertaking the reorganisation with the people on site. Together with the employees who have to do the work, also when we - the temporary support staff - have left."
UP FOR SALE
It was the last resort, according to the external advisors. That is, until Boer & Croon delved into the problems of the family business in the summer of 2018. The profitable towbar division had already been sold off by then. And the other business assets were up for sale. The demise of the almost 100-year-old family business seemed inevitable.
A DIFFERENT ANALYSIS
"In the first instance, they were looking for an experienced CFO who had experience in restructuring. That's how we got René de Wit on board in August." Rene is an experienced restructuring consultant and associate partner of the specialised Transformation and Restructuring group at B&C.
The approach of the previous advisor was to sell out and hope that you have some money left over,' Jos says. "But we made a different analysis than the previous advisers," René adds. René and Jos definitely saw a future for Bosal.
We won the trust of the shareholders to bring the organisation back under control and get a grip on the finances.
With the proceeds of €207 million from the sale of the towbar division, the debt burden was cleared. However, a further loss of €17 million was looming in 2018. "Where things particularly threatened to go wrong was in Prague. That's where a large Bosal manufacturing factory is located, which is worth about €200 million. On top of that, it's quite a complex site. Work is done in small batches for a wide range of customers. Then you have to deal with conversion times and all sorts of complicated processes. Challenging and interesting from a production and technical-planning point of view," according to De Wit.
NEW ORGANISATIONAL STRUCTURE
In the new organisational structure that René rolled out in January 2019, all other factories operated along these new lines. This was done by optimising production, along with sales training and by encouraging teamwork. "Results were shared with each other in a very transparent way, so that people could learn from each other,' René explains. The various divisions were given financial targets, and the introduction of a management information system provided head office with up-to-date and detailed information on the latest developments.
RESTORATION OF CONFIDENCE
"An RFQ is an invitation to submit a bid, a 'request for a quote'. For that, there has to be confidence in the production capacity as well as in the quality. And obviously, the price of the product must be competitive. If you charge too much, then you're out. If you don't ask enough, then you’ll go bankrupt." One important step was when Bosal won the order to supply the exhaust systems for the Ford Transit, which are manufactured in Turkey. This was soon followed by an order to supply fuel tanks to truck OEMs in Europe.
CONSOLIDATION AND ECONOMICS OF SCALE
INNOVATIVE TECHNICAL PARTY
The recent opening of a new factory in China also formed part of the strategy. A branch was opened in Sweden as well and Bosal also started manufacturing towbars again three years after this business activity was sold off. "We have not forgotten how to make towbars," says René cheerfully.
In the meantime, B&C's involvement has been phased out and the family is fully in charge once more. At their request and in consultation with B&C, René joined Bosal to continue to lead the further growth and innovation, while Jos is still involved as a non-executive Board member.
FOUR PRINCIPLES FOR THE SOLUTION
- Ensure that the employees' attention is focused on the goal and the assignment is in line with the business model;
- Avoid complexity, bring structure to business processes, win and build up trust around the company, restore the staff's belief in the future, do it together as a team and celebrate your successes;
- Focus firmly on creating transparency about the restructuring plan by setting SMART goals and steering towards KPIs;
- Restore the confidence of customers and shareholders by involving them and talking to them frequently.