Like many of us, Gabe Mesanza has vivid, if mixed, memories of his first car. “It was a Ford Mustang, with a four cylinder engine,” he recalls. “It usually didn’t start, so I spent lot of time fixing it.”
From there it was natural progression. Obsessed with cars, Gabe studied automotive engineering at Kettering University and with a degree under his belt he went on to work at U.S. giant General Motors as an engineer, but he soon sidestepped from manufacturing to purchasing and product planning, before finally deciding to leave GM and study at a business school. This proved a watershed moment in his career. “It really opened the door to my current career as a consultant,” he says.
Gabe worked for a number of consultancies before joining KPMG, a decision prompted by the firm’s high profile within the automotive industry. “It was two or three years ago and the recession was taking hold,” he says. “Consultancies were finding it difficult to sell their services, but when I researched the market, I found that when you read about a transaction or a restructuring operation, KPMG generally seemed to be involved.”
Gabe’s arrival at KPMG in Detroit coincided with huge changes in the automotive industry. Partly driven by the financial crisis, car companies were restructuring their operations and selling business units. For instance, earlier this year (January 2010), GM sold Swedish car company Saab to Spyker of Holland. Meanwhile, in March of the same year, Ford sold Volvo to China’s Zhejiang Geely Holding Group for U.S.$1.8bn.
A day in the life
In transactions of this nature, one of the key jobs is to assist with the separation of the parent company and the business that is up for sale. Gabe cites the GM deal as an example. “When we were working on the Saab sale, my team had to go through all the business functions. We had to look at what GM did for Saab and what Saab did for GM.”
In some cases the shared functions are separated to allow the sale of the business unit to go ahead. In other cases, when appropriate, the parties agree to continue to share certain functions. It’s up to the advisor to unravel the tangle of interlinked services and operations and suggest a way forward. “We start by taking an inventory of the functions,” says Gabe. “Then we look at where the companies need to go. And finally we look at where the gaps are and advise on how to fill those gaps.”
Gabe says his past work-experience has been essential to his work as a consultant. “I wouldn’t be able to do my job unless I had worked in the industry,” he says. “The car industry has a language all of its own, and to work effectively, you have to understand that language.”
The role of the consultant
As Gabe sees it, his role is to help the client identify strategies. “Our job is to take the client’s knowledge and turn it into an actionable plan,” he says. In this respect, Gabe’s working day seldom takes him far from the client company’s managers and the wider workforce. “I'm working closely with KPMG people,” he says. “We share best practice and support each other. But at the same time it’s necessary to have conversations with the client at the highest level and you have to walk the floor.”
Looking to the future, Gabe sees continued demand for consultancy in the automotive industry, with environmental issues driving much of the activity. “The cost of R&D in the green space is going to drive a lot of transactions,” he says.