A $40 million engine manufacturer and parts distributor had loan facilities of $15 million and $2 million in over-advances, and was headed toward bankruptcy.

Key Issues

  • The company carried excess parts inventory.
  • Competition from overseas was severe.
  • The company was under-capitalized.
  • With no funding for research and development, the company’s technology was falling behind that of its competitors.
  • The company had excessive unrecorded liabilities relating to product warranties and could not fund its warranty obligations.
  • Management’s handling of warranty issues was unfocused and ineffective.


  • RSI assisted the company to identify inefficient locations to be eliminated, resulting in the closure of satellite parts stores in multiple states and the cutting of losses.
  • RSI recommended targeted reductions in staffing at the company’s manufacturing facility as well as at its home office, which were implemented with significant reduction of losses.
  • RSI conducted an open auction process that produced bidding competition and led to the eventual sale of the company to a former supplier for the highest bid.


  • The company was turned around in six months and its $15 million of loan facilities were paid in full.