Cash & Liquidity Management
Published  6 MIN READ
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Treasury Transformation through Troubled Times

by Andreas Weindel, Group Treasurer, Webasto AG

The past two years have witnessed troubled times in many sectors, with the automotive industry being one of the worst affected. As a supplier to car manufactures, Webasto  has seen a dramatic decline in demand resulting from the severe drop in sales across the European Union, USA and Japan. Although there has been state support for some of the major car manufacturers, this has not helped all suppliers. Many have experienced serious liquidity issues as orders are reduced or cancelled. We have seen competitors become insolvent and also Webasto  suppliers’ liquidity situation is partly very vulnerable. Inevitably, banks have been nervous about how much support they can give to companies operating in this industry. That was a concern to us with financing due for renewal in 2010.

A vision for treasury

Webasto had enjoyed international growth over the years with a good number of group companies operating in a fairly independent way in the treasury area. With over 50 subsidiaries globally, it became a business imperative to centralise and co-ordinate financial activities more closely. There was a clear desire to strengthen financial policies, procedures and operational capability of the company; for example, we had no treasury guidelines in place at that time. We also lacked a treasury management system, so it was impossible to achieve an intra month overall liquidity position across the company. There was too little financial interaction across group companies, which made it difficult to co-ordinate a group-wide approach to treasury.

With over 50 subsidiaries globally, it became a business imperative to centralise and coordinate financial activities more closely.