Case | HBS Case Collection | March 2006 (Revised December 2013)

Hexcel Turnaround — 2001 (A)

by Paul W. Marshall, James Quinn and Reed Martin

Abstract

Hexcel's new CEO is faced with deciding how to "take out" $60 million in cash costs in fiscal 2002, as two of the company's end markets—electronics and commercial aerospace—are expected to decline precipitously. Options include closing plants, exiting a business, or undertaking a major headcount reduction. Includes a description of Hexcel's private equity relationship with Goldman Sach's Capital Partners and presents the financial challenges of renegotiating bank lending covenants and managing maturing debt. Focuses on selecting a turnaround approach from the point of view of a general manager (the CEO).

Keywords: Private Equity; Negotiation; Management Teams; Organizational Change and Adaptation; Strategy; Change Management; Crisis Management; Borrowing and Debt; Aerospace Industry; Electronics Industry; United States;

Citation:

Marshall, Paul W., James Quinn, and Reed Martin. "Hexcel Turnaround — 2001 (A)." Harvard Business School Case 806-099, March 2006. (Revised December 2013.)