At the Mackinac Policy Conference, Charles "Chip" McClure, chairman, CEO and president, Meritor, Inc.; Richard E. "Dick" Dauch, co-founder, chairman and CEO, American Axle & Manufacturing; and Michael E. Duggan, president and CEO, Detroit Medical Center, led a discussion titled "Improving Michigan's Economic Environment: Lessons from Business Leaders."
The panel was moderated by Stephen Clark, anchor, WXYZ-TV, ABC.
Following up on keynote remarks from Jim Collins, author of "Good to Great," "How the Mighty Fall," and "Why Some Companies Never Give In," the panel focused on Collins' analysis of "Stage 4" companies, those "grasping for salvation."
McClure, Dauch and Duggan spoke about how their three diverse companies prepared for risk, opportunity and change, and survived "Stage 4" as they implemented turnaround strategies of reducing costs and altering their core competencies to successfully emerge from a downed economy.
In 2009 at the height of the recession, the commercial vehicle market dropped by 50 percent in North America and 74 percent in Europe, requiring fast adaptive actions by suppliers.
"The key to surviving a major downturn is preparation," said McClure. "We operate in a cyclical industry and have to not only be prepared for downturns, but be aware of signs that things could be aggravated by economic crisis. We actually began our cost and debt reduction strategy in 2006 before the worst of the crisis hit."
Through an intense restructuring process that focused the company on their core competencies in the commercial truck market, Meritor recovered from an all-time low stock price of $0.32 in March 2009 to $16.49 in May 2011. The process included shedding their light vehicle assets, cost reductions, restructuring debt and stabilized and improved working capital performance.
The global meltdown in 2009 and resulting implosion in vehicle sales pressured everyone in the supply sector. More than half of the top U.S. automotive suppliers faced bankruptcy. AAM avoided bankruptcy and is now the 19th largest automotive supplier in North America.
AAM attributed the company's survival to its ability to adapt to change and drive performance. By completing its restructuring efforts outside of bankruptcy, AAM was able to preserve a substantial amount of enterprise value for many key stakeholders.
"In 2008 and 2009, the entire auto industry was being reset," said Dauch. "AAM's Resize, Restructure and Recovery business plan triggered a series of extremely difficult but necessary actions targeted at returning AAM to market cost competitiveness, viability, profitability and sustainability."
The Detroit Medical Center had lost nearly $500 million from 1998-2003 and had announced plans to close Detroit Receiving and Hutzel hospitals, before hiring CEO Duggan and the current management team in January 2004. Through the hard work of all 12,000 DMC employees, the hospital system returned to profitability in 2004 and has operated in the black for seven straight years.
The panel was moderated by Stephen Clark, anchor, WXYZ-TV, ABC.
Following up on keynote remarks from Jim Collins, author of "Good to Great," "How the Mighty Fall," and "Why Some Companies Never Give In," the panel focused on Collins' analysis of "Stage 4" companies, those "grasping for salvation."
McClure, Dauch and Duggan spoke about how their three diverse companies prepared for risk, opportunity and change, and survived "Stage 4" as they implemented turnaround strategies of reducing costs and altering their core competencies to successfully emerge from a downed economy.
In 2009 at the height of the recession, the commercial vehicle market dropped by 50 percent in North America and 74 percent in Europe, requiring fast adaptive actions by suppliers.
"The key to surviving a major downturn is preparation," said McClure. "We operate in a cyclical industry and have to not only be prepared for downturns, but be aware of signs that things could be aggravated by economic crisis. We actually began our cost and debt reduction strategy in 2006 before the worst of the crisis hit."
Through an intense restructuring process that focused the company on their core competencies in the commercial truck market, Meritor recovered from an all-time low stock price of $0.32 in March 2009 to $16.49 in May 2011. The process included shedding their light vehicle assets, cost reductions, restructuring debt and stabilized and improved working capital performance.
The global meltdown in 2009 and resulting implosion in vehicle sales pressured everyone in the supply sector. More than half of the top U.S. automotive suppliers faced bankruptcy. AAM avoided bankruptcy and is now the 19th largest automotive supplier in North America.
AAM attributed the company's survival to its ability to adapt to change and drive performance. By completing its restructuring efforts outside of bankruptcy, AAM was able to preserve a substantial amount of enterprise value for many key stakeholders.
"In 2008 and 2009, the entire auto industry was being reset," said Dauch. "AAM's Resize, Restructure and Recovery business plan triggered a series of extremely difficult but necessary actions targeted at returning AAM to market cost competitiveness, viability, profitability and sustainability."
The Detroit Medical Center had lost nearly $500 million from 1998-2003 and had announced plans to close Detroit Receiving and Hutzel hospitals, before hiring CEO Duggan and the current management team in January 2004. Through the hard work of all 12,000 DMC employees, the hospital system returned to profitability in 2004 and has operated in the black for seven straight years.
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