The current interim manager was hired by a German company that had a site in Denmark for the development and production of belt grinding machines. She was tasked with closing the Danish subsidiary and relocating production back to Germany. The interim manager was CFO at the German company at the time of the project.
Free capacity in Germany utilized by closure in Denmark
The success of the production in Denmark had been largely driven by the expertise and know-how of one key person. This manager has now left the company. As a result, significant expertise in product management, development and production of belt grinding machines was lost in Denmark. As production capacities were available in Germany, the supervisory board decided to relocate development and production to Germany and close the Danish production company or merge it with the sales subsidiary.
The German company's belt sanders are sold worldwide - and are very profitable. The current interim manager was faced with the challenge of ensuring that closure and relocation did not lead to production and delivery stoppages. The technical expertise also had to be secured and transported to Germany.
Detailed closure plan including budgets and risk analysis developed
From a commercial perspective, it was particularly important to closely monitor the planned cost framework for the relocation and to find alternatives in the event of imminent overruns. In addition, the current interim manager had to clarify whether the Danish company should be closed after the production relocation or merged with the Danish sales company. The main aim in answering this question was to avoid any tax risks.
The manager prepared a decision paper for the supervisory board. This contained a detailed closure plan including budgets and a risk analysis. The budget also included a social plan and retention bonuses as well as the sale of the property. It also took into account transportation and travel costs as well as the renovation of the new production facility in Germany.
Supply inventories built up and contracts with suppliers successfully rewritten
In order to avoid supply bottlenecks, the current interim manager was responsible for ensuring that the Danish plant built up a safety stock before the relocation. At the same time, negotiations were held with the main suppliers. Existing framework agreements were successfully rewritten on the same terms. This ensured that production in Germany could continue to be supplied with the required quantities of primary products at low cost.
Successful relocation | production costs fall by 10 percent
In order to keep to the ambitious schedule, it was essential to retain the employees in Denmark until the relocation was successful. The current interim manager achieved this by making attractive offers. Together, the team managed to complete the production transfer successfully and within budget. Manufacturing costs were even reduced by almost 10 percent as a result of the relocation.
The manager was able to sell the property on time and at a profit. The bookkeeping was continued by an external party until final approval from the Danish tax authorities and the court. Tax risks could be hedged without unplanned costs.
