Key Lessons from Restructuring Corporations: What The Challenges Teach Us About Business Success
During the Fiat Group's near-bankruptcy in 2002–2003, we played a crucial role in its financial reconstruction. This involved coordinating efforts with five major European banks while managing Citibank's European Autos & Industrial portfolio. Navigating challenging credit conditions and complex syndicated loans at the time provided us with invaluable insights into handling intricate corporate landscapes on a global scale. These lessons are strikingly relevant to analyzing many other businesses today, including Northvolt’s challenges.
What Drives Success?
It’s not just access to capital that drives business success. For sure the conditions need to be right and appropriate. However, it’s the purpose of the business behind the hard financial structures and the strength of its steering that are key. Business pride and leadership integrity together with operational capacity is a must for the entire capital restructuring process—not merely financial conditions.
The question for Northvolt and others today, is whether its international owners, European, U.S. or other regions, share a purposeful alignment and interest that lasts, and as a common goal. Reconstruction deals are fixed normally at discounted prices, and where working capital flow is a trigger. However the heart of the business is what “pumps” the efforts in the long term for success. It is clear that ensuring leadership strength in a mission-driven venture is crucial to back financial risk and stability and the survival of the business.
Industrial Innovation Growth Requires More Than Vision and Investors
1️⃣ Geopolitics & Supply Chains
Building large-scale industrial operations in Europe, while competing with the dependency of China, presents unique geopolitical and business strategic challenges. For example Northvolt’s dependence on Chinese suppliers for operational excellency. Did the company’s governance offer the political support for the success of the business operations from Europe?
2️⃣ A Strong Executive Team & Partnerships
Visionaries need skilled executives and robust partnerships with a strong ownership for the purpose to enable conditions for a new industry approach. Was Northvolt equipped with the right steering board and including industrial supportive agreements to scale? The monitoring of operational progress together with KPI for results, never mind forecasts and expansion plans, given the initial raised capital, are key.
3️⃣ Market Review
Sweden lacks a large domestic market to sustain operations such as Northvolt’s need, making international expansion from a Swedish AB a must in the early days. Moving to scale too quickly such as in the US Silicon Valley model— in a non-economy of scale—created perhaps significant risks for the business initially? Did public owners commit to the complexity, calculated with real operational risks, from the ownership of the steering board?
Governance & Culture: The Hidden Drivers
A business’s success lies in more than technology and products; it thrives on:
Authentic Leadership: Strong ownership and leadership is a must, deeply believing in the mission. That is how Fiat reshaped and re-created from the ashes its operations, fully delivering on its products, launch, and for later ending in acquiring a competitor in Chrysler. We have seen success cases like this with the same answer: strong ownership, belief and for sure with strengthened finances . Where were Northvolt owners within this perspective? Are they leaders? Are they up to riskying all its assets, such as Fiat owners did, for clearing the debts and ensuring the company's survival?
Reputation & Credibility: Trust is non-negotiable and the basis for business.
Sovereignty & Alignment: Business strategies must fit their context. Europe’s industrial ecosystem and regulations are not the same as in the US. Not without underestimating large risks in the calculations. Great clarity is a must for leaders driving global disruptive businesses.
It is time business align not only clients but the suppliers and the entire chain with strategic plans, if the aim is for a global competition. Northvolt’s governance, while well-intentioned, perhaps lacked the diversity and experience needed for such a global operation, a technically and geopolitical complex venture and innovation.
The Fiat Case: The Blueprint for the Turnaround
Fiat’s turnaround in the early 2000s succeeded due to full engagement and commitment from its owners, effective global partnerships, in a first at the time cost-efficient shared platform strategy, competition partnership and in financial agreements, where we ensured responsible results, and the unwavering success and pride of management towards the business mission. These elements turned what looked impossible from a financial analysis perspective into long term profitability, and part of a brilliant highly structured deal that changed the industry forever. Fiat had at the time 5% of the Italian GDP, and it was not only engaged in the automotive sector. Fiat Group operated in cities and communities, owning schools and engaged in social causes. Management was proud of its brand that contributed to society. That fact turned out to be the final argument that unleashed the financial reconstruction. At the time there was no mentioning of charity or sustainable business. It was the energy and cause that made all involved proud of the work in a team effort between banks and the automotive industry.
The Question: Do business owners today, public or private, share this same risk and commitment to balance investments in operational success, proudly supportive in a future oriented approach , turning deals into a winning machine in a complex market that will be even more challenged by monetary issues in Europe? Is the business core scattered or aligned, proactive or obsessed, capable of going beyond short term wins under the pressure of investors?
The Real Differentiator: Honor and Purpose
We are seeing large export companies fall under margin calls today. We have also been part of initiatives in traditional markets, and in unprecedented crowd funding, such as raising $40M in two weeks for the ConstitutionDAO. We are witnessing solutions for the turning around of global challenges, financing and structuring capital at extreme speed for purpose and good business. Financial risk is inevitable and technical disruption leads to cost efficiency.
One thing stands out in every success I have worked on during my career:
Be proud of the business and honor the business purpose together with the team. The belief in the mission, the strong ownership in the business, and the people's engagement, i e the team’s efforts recognition, aligned with steering board key incentives. We are talking about embodiment of the business as one. Extremely important. Capital structures are financial deals where conditions are met to enable the business. There are real people with the energy needed to make it happen. The rest is “just” constructs and regulatory environment.
🔍 Indicators I look for when evaluating an investment, or when restructuring a business, a merger or acquisition, that go beyond financial risk are:
Emotional commitment to achieve goals and the financial demands
Vision clarity with impeccable execution strategy will and power
Clear differentiation in product/service for the market
Reputation, trust, and communication - know your business from the core
Value-driven leadership with heart for long-term prosperity
Company culture and team aligned as ONE - a must for success
This is the difference from long term business to speculative short term investments. If a company loses confidence in its own promise, its product, its board strength, it also loses the trust of its customers and stakeholders. It is simply not sufficient for a successful establishment. The marriage between finance and ethics , the belief in serving society and customers changes the industrial scenario in 2025 and going forward. We are now leading companies to work for society as a global market , better advanced practices and market evolution.
💡 Because the true currency of success isn’t just capital —it’s the capacity value, the belief and strong ownership in your business.
Let’s empower every CEO and every board to achieve the experience needed for success in coming years. My take is that we will continue to see a reorder in the markets, the search for cost efficiency, and in higher volatile treasury challenges. Leadership and strategy are key to managing the working capital flow and business relevance in the competition and technical disruption.
Leading with commitment // Angelica Lips Da Cruz