A father threw his ailing German unit to his 26-year-old son, who saved it

Samvardhana Motherson Group acquired the loss-making UK firm Visiocorp in March 2009, renaming it Samvardhana Motherson Reflectec (SMR) and investing about 30 million euros for a 51% stake. The losses were so sharp that they pushed flagship Motherson Sumi Systems into a loss for the June 2009 quarter.

At a June 2009 strategy meeting, group co-founder Vivek Chaand Sehgal pointed to his son Laksh, then 26 and just back from a finance master's, and told him he would be the new CEO of SMR. Laksh assumed it was a mistake, and told his father he was not the best qualified; the father laughed and said the firm was in such bad shape it could only do better.

Laksh's first move was to break SMR's 16 mostly loss-making plants into separate units, each treated as its own company that had to find a path to profit, and to add financial discipline. He also removed expensive consultants who were not adding value.

Within a year SMR was reporting a small but significant standalone profit of 9.16 crore rupees for the December 2009 quarter, and Motherson Sumi reported a profit of 78.05 crore rupees in the same period — creditable given the global auto downturn.

SMR swung from a 22.3 crore rupee quarterly loss to a 9.16 crore profit, and Motherson Sumi returned to profit by December 2009.

The father chose to make his son's initiation a genuine trial by fire in a failing unit.

Breaking the business into small accountable units let each plant find its own recovery.

Laksh brought financial discipline and cut consultants who were costing money.

The founding family kept full control and supported the son's decisions day by day.

When a family business buys a failing asset, handing it to a successor and letting them break it into accountable units can out-perform keeping experienced managers in charge of an unconstrained loss.

The revitalised SMR added scale and global customers to the group, which grew to about $9.1 billion. Laksh stepped away from SMR in 2014, leaving management to an experienced team, and the group continued acquiring since 2002 with 39 joint ventures and factories in 33 countries by 2017.