Wind-down and exit of OEM from Australian market
KordaMentha supported a global automotive component manufacturer through a structured wind-down of its Australian operations, ensuring employee entitlements were funded, obligations met, and value preserved.
Following the planned withdrawal of most Australian vehicle original equipment manufacturers in December 2017, a global automotive component manufacturer needed to exit the local market.
With three sites and more than 300 employees, the business faced complex operational, financial and stakeholder challenges.
The private equity owners and global board required a strategy to wind down operations while maintaining global relationships and meeting long-term obligations.
KordaMentha was engaged to develop and implement a structured exit plan that would be self-funded, minimise disruption to customers and suppliers, and ensure employees and unions were treated respectfully.
The plan also needed to address OE spares obligations for a ten-year period post-production and maximise real estate and private equity value.
How we helped
KordaMentha led the development and execution of a multi-year wind-down strategy, balancing financial outcomes with stakeholder care.
- Modelled closure scenarios and developed optimal exit plan
- Appointed to underperforming subsidiary to manage insolvency
- Facilitated EBA negotiations and employee protection mechanisms
- Designed performance and motivation frameworks for workforce
- Developed commercial strategies to maximise OEM and OES contributions
- Ensured IAM and OES activities remained financially viable and transferable
- Structured real estate and PE sale programs aligned to market conditions
Outcomes acheived
- $50 million cash uplift: Improvement in closing cash position over a three-year closure program
- OEM relationships preserved: Positive impact on global connections
- Employee entitlements funded: Expectation of full coverage and significant surplus on EOP
- Tax efficiency achieved: Utilisation of trade generated tax losses
- Strategic divestment enabled: Potential sale of OES and IAM business units to other regions within the group
- Structured governance: Reporting model and ongoing project office to execute strategy
