The Week the Phones Stopped Ringing
Orders slowed. Cash dried up. A German Tier-2 supplier with three plants and 1,200 employees was two payrolls away from missing its obligations. Procurement flagged unpaid tooling invoices. Then came the message from the bank — covenant breach.
This wasn’t a forecast. It was unfolding in real time. And for the CFO, everything now hinged on three things: preserving cash, keeping supply intact, and staying ahead of the story.
Why 2025 Is Different
Insolvencies in Germany surged in 2024 and supplier distress is still climbing. Automotive players are among the hardest hit – not just by sluggish demand, but by deeper structural pressure.
According to Falkensteg, large-company insolvencies rose by 31 percent year over year, with suppliers front and center. Roland Berger’s supplier study calls the current landscape “stagformation,” where weak volumes clash with required investments in electrification and digital systems.
EBIT margins have compressed into mid-single digits, and the ifo Institute’s index shows sentiment in the red despite a minor July bump.
At the same time, energy and labor costs haven’t softened, and OEMs are still driving tough price terms. With stagnant volumes and rising complexity, 2025 is a year where liquidity must be led, not assumed.
Days 1–10: Set Up the Liquidity Command Center
1) Build your cash visibility system.
Set up a 13-week forecast with daily updates. Include tax, vendor, and covenant exposures. Factor in ESG-linked triggers if relevant.
2) Reduce outflows immediately.
Pause open capex and freeze nonessential spend. Centralize credit decisions. Accelerate invoicing and work through deduction backlogs.
3) Talk to your OEMs.
Reach out to top customers to confirm release schedules and payment behavior. Flag friction points early to avoid late-stage surprises.
4) Bring in external leadership if needed.
In urgent cases, firms like CE Interim can install an interim CFO or CRO within 72 hours — someone who can lead the liquidity taskforce and manage cross-stakeholder coordination from day one.
Days 10 to 25 – Secure Revenue, Protect Supply
1) Shift from cash defense to revenue protection.
Once your liquidity window is mapped, move quickly to protect the top line. Keep shipments flowing and customers stable.
2) Prioritize profitable part numbers.
Review your active product portfolio. Focus on parts that are profitable, billable, and moving now. Don’t let internal blockers or supplier-side delays stall your best cash drivers.
3) Tackle delivery bottlenecks.
Identify anything slowing down fulfillment — whether it’s missing inputs, process gaps, or unclear customer approvals. Clear them fast to avoid revenue slipping into next month’s books.
4) Start indexation conversations.
Use hard data — rising labor costs, energy prices, raw material inflation — to reopen pricing discussions with OEMs. Many are already adjusting terms with other suppliers. Now’s the moment to get on their radar and push for concessions.
5) Stabilize your delivery network.
If you’re operating across multiple plants or geographies, pinpoint weak links. Whether internal or outsourced, fragile nodes threaten customer confidence.
6) Bring in operational muscle if needed.
During this phase, many companies embed seasoned operations leaders on-site to hold the line. CE Interim often supports by placing interim plant or site heads who can work alongside finance to keep deliveries moving while pricing terms are restructured.
Days 20 to 40 – Fix What You Can Ship Now
1) Focus on practical changes that improve cash.
This is the window for operational decisions that stick — even after the crisis fades. Every change you make now should move the company toward a leaner, more resilient model.
2) Simplify your product portfolio.
Cut low-margin SKUs and reduce variant complexity. Shift volume to your most efficient sites and reallocate resources accordingly. Update make-or-buy decisions based on real-time cost data. If insourcing adds control and speed, act on it.
3) Realign labor with confirmed volumes.
Use updated demand signals to reset shift patterns and reassign teams. You don’t need a formal restructuring to manage resources smartly.
4) Tighten the order-to-cash process.
Invoice as soon as goods ship. Clear disputes quickly. Enforce stricter credit controls. These aren’t admin cleanups — they’re direct levers that improve your 13-week cash position.
5) Redefine internal incentives.
Move away from EBIT-only targets. Tie variable pay to cash-focused metrics — DSO, dispute resolution, and customer service continuity. Align every function with the same north star.
Days 30–60: Choose the Legal Path
By now, it’s time to assess the legal options. Do you have the support to restructure as a going concern? Or do you need a formal framework – StaRUG or Schutzschirm – to execute?
If StaRUG makes sense, prepare your binding plan. If Schutzschirm is likely, align early with your advisors and begin internal preparations for self-administration.
Either way, it’s time to:
- Finalize audited financials and scenario forecasts
- Pre-align lenders and major OEMs
- Map out supplier exposure and volumes
- Prepare messaging for the works council
This is when firms often bring in a dedicated interim PMO – someone to align legal advisors, coordinate filings, and lead plant execution. CE Interim supports clients through this bridge phase and ensures a clean handover to internal teams.
Communicate Without Panic
In times of distress, confidence comes from clarity. Not spin.
In week one, OEMs need to hear that you are assessing liquidity and operations. In week three, they expect a plan. By week five, you should be executing it.
The works council should hear early about employment impact, timelines, and what’s being done to avoid deeper cuts. Don’t bury the lead. Show numbers, movement & respect.
Banks and advisors don’t want spin either – they want data. Forecast accuracy. Payment discipline. Supply-side control.
Board Slide: The Proof After 60 Days
By day 60, the board expects a sharp, grounded update:
- Where liquidity stands now versus day one
- What concessions have been secured from OEMs
- Which legal path is underway
- What structural actions have been delivered – at plant, product, or team level
Frame it inside the broader landscape: sentiment still negative, insolvencies still rising, but your response both rapid and real.
Beyond the 60-Day Window
The work doesn’t end at day 60. In many ways, that’s when the harder part begins.
Keep weekly cash calls. Run quarterly reviews of indexation and pricing. Maintain site efficiency checks. Limit dependency on single vendors. Don’t let progress drift back into fragility.
If distressed M&A is part of your future, start building the data room now. Highlight your post-crisis footprint – lower cost base, secured volumes, and stabilized leadership.
In a year like this, where German suppliers face margin compression, volume stagnation, and high fixed costs, there’s no waiting for systems to save you.
Execution is the difference. And in the first 60 days, that execution is everything.
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