Fixed cost reduction at a global automotive company

A global automotive company was facing tremendous pressure to reduce fixed costs coming out of divestitures that drove significant revenue decline.

Strategy& helped the client create P&L-accountable global business units and outsource large portions of IT infrastructure, IT applications, finance back-office, and HR back-office to third party providers. We also shrunk corporate headquarters, allowed the business units to run as stand-alone businesses, designed and implemented a global shared services organization, eliminated the regional headquarters, and moved to business unit leadership outside of North America. As a result, the client achieved greater responsiveness to market demand, increased transparency and accountability, and achieved $500M+ in reduced overhead.