Usha Martin: Surviving a Perfect Storm


In December 2017, Usha Martin, an engineering company with more than fifty years of operation was at a critical juncture, with its long-term survival at stake. Founded with a goal of making wire ropes, a specialized product, the company had backward integrated into making steel and further backward integrated into operating mines for extracting raw materials such as coal. Its vertically integrated business model, which yielded consistent quality and also lower costs in favorable conditions, became a millstone around the company’s neck when prices of steel collapsed. To further complicate matters, the company’s license for a high quality coal mine was revoked by the Indian government because of allegations of corruption. After the Chairman of the company was removed by the lenders for dragging his feet on a much needed restructuring of the company, the families of the founding brothers engaged in a public spat. To ensure the company’s long term survival, the company’s management had to make the correct decisions, including the possible sale of its crown jewel, the wire ropes division.

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