Industries

Automotive Management and Restructuring

The automotive industry faces many challenges, from an unpredictable global supply chain to regulatory compliance and changing consumer demands. When a situation causes a reduction in revenue, missed payments, or a loss of critical employees, the company may look to an expert in automotive management and restructuring to develop a long-term sustainability plan to maximize value for a sale.

Automotive businesses must comply with many regulations and are under pressure to reduce environmental impact. Changing industry trends and technological advancements pressure companies to develop new vehicles quickly. Market demand may fluctuate. 

At SierraConstellation Partners, we have deep expertise in the automotive sector. We serve auto vendors and auto groups, including automotive OEM suppliers. We’ve also worked with automotive technology companies, auto manufacturers, distributors of electric motors and gas engines, and aftermarket parts vendors, to name just a few of our auto industry clients. 

Our team of former CEOs, CFOs, COOs, investors, and investment bankers helps companies navigate the most challenging business environments. Our comprehensive automotive financial services range from interim management and restructuring to talent and culture strategies.

Improve your business performance with the financial and operational guidance of SCP’s expert advisers.

Automotive Interim Management

When is an automotive business in need of interim management services? It may be experiencing a liquidity crisis and default with lenders due to poor management. The CFO may have unexpectedly resigned. There may be operational challenges beyond the ability of the current COO.

SCP works seamlessly with automotive business management to fill gaps in leadership and steer organizations through difficult transitions. We offer interim CEO, CFO, COO, CRO, and general managerial services. Our team provides situation assessment, hands-on management, and strategy development to build revenue and achieve continual growth. SCP maximizes your team’s effectiveness and focuses business operations on enhancing performance while aligning with your company’s goals.

Automotive Financial Restructuring

An automotive business may have missed covenants or defaulted on a loan. A parent company may be over-extended, with difficulties in one organization pulling attention away from more lucrative opportunities. A business may be filing for Chapter 11 bankruptcy.

As part of our automotive financial services, the SCP team will perform a comprehensive analysis and recommend the best way to move forward and out of crisis. We work within your team to successfully execute these plans, with an eye toward long-term success. Steps may include reorganizing assets or changing the portfolio, financial structure, or ownership to enhance the company’s value.

Automotive Turnaround Management

A company may require a turnaround plan if the CFO has suddenly left, liquidity has dried up, labor and capital have been poorly managed, or the stock price has fallen. 

Turnaround management aims to reorganize a business to enhance profitability before insolvency. SCP team members with deep experience in the automotive sector will design a short-term plan to help make the company profitable again. SCP will then assist in executing this custom-tailored business recovery plan. 

Activities include managing cash flow, re-establishing the company’s credibility, and negotiating new agreements with lenders. SCP might also determine the company’s valuation and assess financial reporting practices.

Automotive Performance Improvement

Profitability may have declined due to rising material costs. A new product line may have been rushed into production, leading to cash flow problems. An automotive manufacturing plant with a global supply chain may be experiencing price fluctuations and production delays due to adverse local conditions, negatively affecting profits.

As part of SCP’s advisory services, we analyze the company’s operations, determine what needs to change and create an actionable blueprint. The goal is to position the organization for sustainable growth. Our team works closely with management to leverage available resources, reduce production costs, optimize facilities and capabilities, and align stakeholders.

Automotive Talent & Culture

Automotive business challenges include staff changes resulting from mergers or acquisitions and the need to maintain a strong company culture throughout these unsettling events.

SCP’s automotive financial services include supporting your most important resource—your people. Operational efficiency depends on the strength of your team. We guide human resource professionals through seamless leadership transitions and smooth M&A integrations. SCP assists with strategic organizational development, compensation planning, and talent acquisition. Our talent data intelligence helps you assemble the best team.

Frequently Asked Questions

What long-term solutions does SCP offer?

SierraConstellation Partners helps companies overcome business challenges and thrive. We offer interim management, financial restructuring, turnaround management, performance improvement, and talent and culture services. SCP facilitates smooth transitions, restores value, leverages assets, and capitalizes on opportunities for long-term growth.

What unique business challenges are common in the automotive industry?

Common automotive business challenges include a global supply chain dependent on regional conditions, complex trade regulations, evolving market trends, customer preferences, technological advances, environmental sustainability, and competition for top industry-savvy talent.

How does financial restructuring work?

A company undergoes financial restructuring during extreme economic pressure, such as being unable to pay off a loan or when preparing for a merger. They might restructure debt agreements, issue equity to raise capital, cut costs, or sell assets.

Financial Solutions for Your Automotive Business

If an automotive company you’re involved with is transitioning and having financial or operational difficulties, SCP can help. We design tailored solutions that fit the needs of your business to achieve stability and long-term profitability and growth.

Overcome financial and operational challenges with help from SCP’s team of experts.

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Case Studies

Automotive Industry Team Members

William White

Senior Director

Christian Sorensen

Senior Director

Bob Riiska

Managing Director

David Bitterman

Managing Director

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William White

Senior Director

Los Angeles, CA

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Industry Expertise

William White, a Senior Director at SierraConstellation Partners, has over 12 years of experience advising companies and creditor groups through complex transactions, including in- and out-of-court restructurings, distressed mergers and acquisitions, and challenging financings.

He has worked with clients across a variety of industries and executed transactions ranging in size from less than $100 million to over $20 billion. His industry experience includes apparel, automotive, consumer retail, manufacturing, distribution, infrastructure, technology and telecommunications.

Prior to joining SCP, Mr. White was a vice president in the restructuring group at Rothschild, Inc. in New York. He also worked as a financial analyst in the financial restructuring group at Houlihan Lokey and as a financial analyst in the corporate finance group at Ernst & Young.

Mr. White holds a bachelor’s degree in business administration from the University of Southern California and earned his MBA from New York University.

  • Served as interim manager of a designer, manufacturer and retailer of branded children’s apparel operating 82 stores and an e-commerce platform during its restructuring and sale of assets.
  • Advised a leading manufacturer of waste handling and recycling equipment in North America on the consensual out-of-court restructuring of $725 million in debt obligations.
  • Advised a leading global manufacturer of wire harnesses on its $325 million pre-packaged restructuring.
  • Advised a global Tier 1 automotive supplier during its Chapter 11 restructuring of approximately $22.2 billion of pre-petition liabilities.
  • Advised a Tier 2 industrial supplier on its $335 million pre-negotiated restructuring.

Media

Awards

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Christian Sorensen

Senior Director

Los Angeles, CA

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Christian Sorensen, a Senior Director at SierraConstellation Partners, provides operational and financial restructuring and advisory services to both underperforming companies and companies in transition. He has experience with in- and out-of-court restructurings, operational turnarounds/improvement, balance sheet restructurings, debt and equity capital raising, mergers and acquisitions, divestitures, and conducting financial modeling and forecasting.

Christian has experience in a variety of industry verticals, including: aerospace and defense; agriculture; automotive; business services; consumer; food and beverage; healthcare; gaming, lodging and leisure; industrial and manufacturing; media and entertainment; oil and gas; restaurants; retail; technology; and transportation and logistics.

Prior to joining SCP, Christian worked at Sun Capital Partners, an operationally-focused middle-market private equity firm that invests in companies that are operationally challenged, experiencing an industry or business transition, undergoing a corporate divestiture, or managing rapid growth, with over $9 billion of capital under management. At Sun Capital Partners, Christian focused on analyzing control equity investment and divestiture transactions, and actively worked with executive management teams to drive performance improvement of portfolio companies. Prior to Sun Capital Partners, Christian worked at the investment bank Imperial Capital, where he focused on restructuring, financing, and M&A transactions.

In 2019, Christian won the M&A Advisor’s Annual Turnaround Award for Restructuring of the Year of between $25-$50 million for his work with the Cranberry Growers Cooperative.

In 2021, Christian received the M&A Advisor’s Emerging Leader Award, which recognizes leading M&A, financial and turnaround professionals who have reached a significant level of success while still under the age of 40.

Christian holds an Honors Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario, where he graduated with Distinction.

  • Financial advisor and part of team that served as Chief Restructuring Officer to cooperative of cranberry growers, which successfully implemented a Chapter 11 Plan of Reorganization. SCP's solutions identified and implemented operational changes to reduce costs by over 20% and improve production yields by over 10%, while providing secured lenders full recovery. The transaction also received a Turnaround Award by The M&A Advisor for restructuring of the year.
  • Financial advisor and part of team that served as Chief Restructuring Officer to agriculture and commodities company during its Chapter 11 bankruptcy restructuring. Executed an orderly sale of all inventory, monetized certain contract assets, and sold individual operating facilities via court-approved Section 363 asset sales to maximize recoveries.
  • Financial advisor to consumer packaging business with over $140 million of indebtedness following events of default. Developed and implemented cash management solution, identified operational changes to reduce working capital accounts and increase cash conversion, and provided strategic review of alternatives.
  • Financial advisor to diversified manufacturing company with prior year revenue of over $700 million, including developing plant idling plans and identifying and implementing operations changes to reduce quarterly cash burn by over $5.0 million, while achieving a successful refinancing.
  • Worked with leading global manufacturing company on key operational enhancement initiatives to generate over $30 million of EBITDA improvement, and sell non-core assets.
  • Led approximate $100 million acquisition of North American manufacturing company. Worked with executive management teams to identify cost savings and synergies across various departments to enhance EBITDA by approximately 50%.
  • Evaluated in- and out-of-court restructuring alternatives to maximize shareholder value for an aerospace company. Negotiated senior debt purchase, and subsequent stalking horse purchase agreement and credit bid in a Chapter 11 §363 asset sale.
  • Closed over $7.0 billion of restructuring, financing and M&A transactions.

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Bob Riiska

Managing Director

Los Angeles, CA

BiographyNotable AssignmentsMedia & Awards

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Industry Expertise

Robert O. Riiska, a Managing Director at SierraConstellation Partners, has over 25 years of turnaround and advisory experience, including serving in interim senior management capacities for clients and performing numerous value-added consulting assignments. Clients have included multigenerational family businesses, sponsor-backed roll-ups and large publicly traded corporations.

Mr. Riiska is a Certified Turnaround Professional (CTP), Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA). He received a Bachelor of Science Degree in Economics from the Wharton School of the University of Pennsylvania, and an M.B.A. in Finance and Marketing from the University of Chicago Booth School of Business.

Mr. Riiska serves on the boards of several leading industry associations including the Executive Committee of the Turnaround Management Association’s Southern California Chapter, the Advisory Board of the American Bankruptcy Institute’s Bankruptcy Battleground West and as a Secured Finance Network member director.

In 2019, Mr. Riiska received the Turnaround Atlas Award for his work as Chief Restructuring Officer of LORAC Cosmetics prior to joining SCP in 2018.

Mr. Riiska’s recent engagements have been in diverse industries, including automotive dealerships, transportation, furniture manufacturing and retailers, apparel, mining, cryptocurrency lending, nonprofits, consumer products, restaurants and industrials.

  • Served as CRO of a gold mine located in the Southwest U.S., spearheading out-of-court restructuring efforts which led to a successful sale.
  • Served as financial advisor to a manufacturer and distributor of commercial office furniture, negotiating a forbearance agreement which would give the company sufficient operational runway to recover from the issues mainly caused by the pandemic.
  • As CRO of a prestige cosmetics company based in Los Angeles, oversaw all aspects of day-to-day operations, including directly interfacing with large national retailers and suppliers, and developing and executing liquidation strategies for excess inventory, while also coordinating successful sale efforts.
  • As financial advisor to a consumer packaging company, negotiated a new financing solution to provide liquidity to maintain core operations and pursue growth initiatives, while also achieving a successful sale of one of the divisions in an expedited timeframe.
  • As financial advisor to a $500 million long-haul trucking company, developed a successful turnaround plan and convinced the lenders to provide a significant structured loan overadvance to facilitate execution of the plan.
  • Served as financial advisor to a $300 million family-owned grocery wholesaler and developed a comprehensive turnaround plan to return the business to profitability.
  • Served as CRO of a $900 million publicly-traded staffing company with over 30,000 temporary employees. Successfully sold several business units after a massive tax fraud related to an affiliated company had been discovered.
  • Acted as Financial Advisor to one of the largest manufacturers of recreational vehicles while it operated in Chapter 11, leading to a successful asset sale.

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David Bitterman

Managing Director

Boston, MA

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David Bitterman, a Managing Director at SierraConstellation Partners, has nearly 30 years of experience as a financial advisor, investment banker and sell-side research analyst mostly serving the automotive, transportation and general industrial sectors. His career has provided him with great connectivity to lenders, lawyers, private equity firms and other return-oriented investors. David has enjoyed great success professionally both in an execution and business development capacity. At SCP, David is focused on maintaining support from his longstanding relationships to expand SCP’s presence in new markets, mostly on the east coast.

Prior to SierraConstellation, David spent 11 years at Huron Consulting Group where he first served in a capital raising capacity, eventually co-heading the firm’s broker-dealer and, subsequently, running new business development nationally for the Business Advisory practice.

Prior to Huron, David was 8 years at Deutsche Bank Securities, mostly in leveraged finance, first running the High Yield Research group and then moving onto the Industrials investment banking team where he worked on financing transactions in the automotive, commercial truck and car rental industries. David helped arrange and finance several leveraged buyouts of automotive suppliers and well as finance consolidation in the car rental industry and in support of several car OEMs as they managed through the Great Recession.

Since then, David has helped to raise capital for many stressed and distressed middle market companies and has worked alongside many lenders and investors to manage through some very challenging credits and platform companies.

In 2021, David won the 15th Annual M&A Advisor Turnaround Award under the category of ‘Information Technology Deal of the Year’ for his work with Wave Computing.

David received his bachelor’s degree in International Relations from Tufts University and his MBA in Finance from the NYU Stern School of Business.

  • Ran several successful debt capital raises concurrent with Financial Advisor roles at several stressed automotive suppliers through the Great Recession when credit appetite for the sector was particularly tight.
  • At SCP, David led the successful refinancing of a non-emergency ambulatory care provider.
  • Completed successful rights offering for an automotive supplier.
  • Ran a sellside advisory for Contech Castings in bankruptcy.
  • Ran a sellside advisory for a west coast-based digital marketing and advertising agency.
  • Served as Financial Advisor to a Georgia-based Payday lender, which ultimately resulted in a successful high yield bond offering.

Awards

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Confidential Automotive OEM Supplier

SITUATION

  • Foreign parent company owned two automotive suppliers – one specialized in high-end OEM racing systems, and the other in carbon fiber body panels.
  • The parent company was diverted due to problems with other unrelated parts of their business, causing the racing systems business to drift.
  • The parent company wanted to look for strategic options for the racing systems while it focused resource on the carbon fiber business.

SCP'S SOLUTION

  • SCP assisted in the preparation of segregating financial information to assess if the racing systems business could be marketed for sale as if it were a stand-alone entity.
  • SCP made many recommendations and observations during the analysis of and ultimate implementation of segregated financial reporting.

RESULTs

  • Parent company determined to hold the racing systems business as segregating financial information.
  • Creating segregating financial statements provided the Parent company with reasonable outlook for the business while it focused on strategically more important businesses.
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Carbon Composites
Structures Manufacturer

SITUATION

  • A $90 million advanced carbon composites structures manufacturer had miss-bid long-term production contracts with OEMs and was unable to negotiate different commercial terms. Significant operating losses were being incurred monthly.
  • In addition to the contract problems, Hitco’s inability to perform predictably and at OEM build rates put serious pressure on the business and management, resulting in significant cost overruns, missed production deadlines, management flight, etc
  • SCP was retained by Hitco’s German parent company as interim manager to assist in an asset sale process, which included extensive systems migration, accounting migration, and ITAR, CFIUS, and related regulatory and licensing issues.

SCP'S SOLUTION

  • SCP’s extensive experience in distressed aerospace M&A brought purpose and priority to a sale process that commenced 2 years earlier.
  • While a buyer for the business had previously identified the asset, the sale was complicated by deteriorating operating metrics, complicated regulations on export licenses, and management flight – all of which had to be proactively managed with SCP professionals.
  • Back-up planning in the event the sale would not conclude gave the parent company’s management visibility into next steps, timing, and cash requirements.

RESULTs

  • Asset sale closed and concluded without extraordinary purchase price adjustments typically found in distress M&A.
  • Successfully transitioned off incumbent accounting and MRP systems, so that the buyer of the business had a fully functional ERP system at closing.
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Confidential Tier-2 Automotive Supplier

SITUATION

  • A Billion+ manufacturer of undercarriage and axle assemblies supplying the global automotive market faced a massive revenue loss associated with foreign competitive forces.
  • Tooling, machinery expenditures, and other major costs were not managed to align with existing revenue levels.
  • The company had defaulted on payments on high-yield bonds.

SCP'S SOLUTION

  • Assessed the operating and liquidity challenges of the Company to appropriately set expectations with the lenders.
  • Developed a series of metrics and analyses to support the ongoing restructuring efforts and ensure short-to-medium-term visibility with the financial constituents.
  • Provided discreet solutions to realign the cost structure to reflect the “new normal” revenue levels.

RESULTs

  • Manufacturing facilities and capacities were optimized for the current revenue levels.
  • Certain plants and capabilities in the upper mid-west were reallocated to Southern US facilities.
  • The Company began achieving financial goals thereby alleviating the restructured default pressures.
  • The Company successfully re-financed with a new private equity sponsor to alleviate future liquidity concerns.
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Electric Motor System Company

SITUATION

  • Venture-backed electric motor system company.
  • The Company spent 8 years and $60 million developing a high-torque, next-generation motor system for electric vehicles and motorcycles.
  • KLD had a written, binding agreement for $25 million of long-term debt, but the deal failed due to significant debt (mostly bridge loans), and it became impossible for KLD to restructure outside of bankruptcy.

SCP'S SOLUTION

  • An SCP professional became the Chief Restructuring Officer prior to filing a Chapter 11 case.
  • The professional developed and implemented a financial plan stabilizing the Company and reducing costs.
  • The team managed the intellectual property assets and improved the portfolio with additional patent applications.
  • Within one month, the team developed comprehensive sales documents and sales targets.
  • The Chief Restructuring Officer engaged a top 3 automotive engineering firm to evaluate the KLD Energy motor system against current-generation motors to establish its value.

RESULTs

  • KLD received $3.5 million in Debtor-in-Possession financing.
  • A competitive, and highly contentious, U.S.C. 363(b) sale process resulted in 14 parties completing due diligence resulting in multiple bidders. The “stalking horse bidder” was named the winning bidder.
  • KLD’s assets were sold at a price paying all secured debt with a distribution paid to the unsecured creditors.
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Manufacturer & Distributor Of Automotive Parts

SITUATION

  • $250 million manufacturer and distributor of aftermarket automotive parts with headquarters in Southern California.
  • The Company faced a severe liquidity crisis after dramatic expansion as well as significant capital expenditures.
  • The Company was in default with its senior lenders and severely past due with virtually every vendor.

SCP'S SOLUTION

  • SCP assisted in evaluating the strategic options available to the Company considering the severed liquidity demands.  
  • SCP’s analysis suggested dramatic cost-cutting and plant closures to optimize long-term profitability and position the Company for sale to a strategic acquirer.

RESULTs

  • The parent company executed the strategy laid out by SCP and severely reduced its physical and cost footprint.
  • As a result of these efforts, SCP worked with the lenders and investment bankers to identify a strategic acquirer to purchase substantially all of the remaining assets of the business as a going concern and to continue the turnaround efforts.
  • As a result of the work performed, the Company fetched a value above 5 times the original liquidation value as determined by the lenders prior to SCP’s engagement.