Every business experiences bad times. But what George Perry encountered was a special kind of bad. It was the kind of bad that can alter the face of an entire industry.
It was mid-2008 when the U.S. automotive industry started crumbling around Yazaki North America Inc., the North American arm of global automotive component supplier Yazaki Corp. By mid-2009, both General Motors and Chrysler had filed for bankruptcy protection, and plant shutdowns, layoffs and bankruptcy proceedings were rampant among automotive suppliers, as well.
It was more than a downturn. It was an emergency.
“I’ve been in the business a long time, and I’d never seen a crisis so severe that even our customers were unsure of their future,” says Perry, who retired last month as Yazaki North America’s president and CEO. “They couldn’t even give us guidance as to what the next quarter or year would hold.”
Revenue at Yazaki North America dropped from $3.1 billion in 2007 to $2.2 billion in 2008. The loss of income necessitated cutbacks throughout Yazaki’s continental footprint. Approximately 25 percent of salaried employees were let go through layoffs, attrition and buyouts. Many other employees were affected in some capacity through plant closures and restructuring. That was on top of a corporate restructuring that was already under way when the economic crisis hit.
“Even with our revenues down, we still had to find the cash to restructure the entire company,” Perry says. “We were already in a mode where we were completely overhauling the business system so that we could have one integrated business system. We were in the middle of all of this, which was a major undertaking, when this high level of uncertainty hit the marketplace.”
It was instability piled on top of instability. The company wasn’t sustaining just economic damage. It was sustaining damage to employee morale, which if left unchecked, can damage or destroy a company’s culture.
Perry and his leadership team had to react quickly, both to salvage Yazaki’s finances and reinforce its culture.
