Autoliv’s New CFO Forced to Make Tough Choices Amid Coronavirus Crisis

Swedish auto-parts supplier navigates shutdown of production while also preparing for ramp-up in certain markets

Autoliv makes seat belts and air bags for all major car manufacturers. Nissan, whose vehicles are shown here, is one of its largest customers.

Photo: Bing Guan/Bloomberg News

Just weeks into his new job, Inc.’s finance chief found himself facing some tough decisions as auto production in North America and Europe shut down due to the coronavirus pandemic.

Fredrik Westin, who joined the Swedish automotive safety equipment supplier on March 1, helped lead a series of often unpopular actions that included employee furloughs and a dividend suspension as the auto-parts industry faced a sudden drop-off in demand.

“You don’t know the organization, you’ve barely met people, but you need to start in this role and start executing fairly uncomfortable and fairly unpleasant types of actions in this environment,” said Mr. Westin, who joined the company after serving as CFO of the mining and rock technology division at Swedish engineering company Sandvik AB.

香蕉视频苹果下载After about two weeks at Autoliv, Mr. Westin began working from home as the company mandated remote work for employees amid the pandemic. Mr. Westin assisted in making several decisions allowing the business to navigate customer closures and the decline in automobile sales.

香蕉视频苹果下载Autoliv furloughed workers in North America and Europe, reduced executives’ base salaries by 20% for the second quarter, adjusted production and work hours, and delayed some investments. It also drew down all of its $1.1 billion revolving credit facility, withdrew 2020 guidance and suspended its stock dividend.

香蕉视频苹果下载“At the moment, most of our actions are focused on really getting through this trough and then understand what the new normal will be for us,” Mr. Westin said.

The decisions were largely pre-emptive and short term, Mr. Westin said. The general lack of visibility has made it challenging to keep Autoliv’s long-term strategies and plans in place, but the company has held off on considering deep-rooted actions such as permanent employee reductions, he said.

The personnel moves, in particular, were easier to execute during a pandemic than as the result of an internal corporate decision because employees are more understanding of the reasons, he said. “Because it is such an exogenous shock, the messaging is quite simple in this case,” he said. “It helps. As strange as it sounds.”

Mr. Westin isn’t new to the automobile industry, having worked at industrial conglomerate PLC, which formerly manufactured automotive seating and batteries, and AG . For direction on fighting the pandemic at Autoliv, he turned to external consultants and fellow executives and analyzed the company’s efforts during the 2008 financial crisis to arrive at responses, he said.

“Even CFOs who have a lot of experience are having a tough time managing through this,” said Vijay Rakesh, an analyst at Mizuho Securities Co.

香蕉视频苹果下载Autoliv’s first-quarter sales fell 15% to $1.85 billion from the same period last year, the company reported April 24. The company has seen demand recover significantly in China since it restarted production there in mid-February, Chief Executive Mikael Bratt said on an earnings call.

香蕉视频苹果下载In the coming months, Mr. Westin likely will be focused on balancing cash conservation with delivering products in a timely fashion, said Richard J. Hilgert, an automotive analyst at Morningstar Inc. “You’re going to have to make sure that you don’t ever delay your customers’ production because this is a highly just-in-time delivery industry,” he said.

As some auto makers look to reopen factories, the company has had to simultaneously adjust to a rapid downturn and prepare for a ramp-up of production.

香蕉视频苹果下载“We’ll be happy to get by this,” Mr. Westin said. “It is quite, quite hard, I would say.”

Write to Mark Maurer at mark.maurer@wsj.com

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