Spotting Opportunity in a Crisis

CA Technologies’ Jim Hodge improved the company’s ratings and revamped its global cash management.

Jim Hodge is one of those guys who sees the glass as half full. He joined CA Technologies as treasurer in the fall of 2007, after serving as assistant treasurer at AT&T. That meant Hodge arrived in time for the financial crisis and stock market crash, but he saw the crisis not as bad luck but as a challenge and an opportunity.

When the crisis hit in 2008, Hodge and the top managers of New York-based CA, an IT management software and solutions company, decided to bolster the company’s credit profile by moving it from a junk rating to investment grade. That meant reducing CA’s leverage by more than $1 billion—no small task for a company that had only $4.2 billion in sales that year.

Still, Hodge spotted a challenge. “I found the company’s cash management to be quite decentralized,” he says, with each of its 40 operations worldwide managing its own cash. Hodge instituted a system of pooling, including regular sweeps of cash, for the euro and sterling areas. He also set up notional pooling for countries outside the euro and sterling areas, such as Switzerland, Japan and the Nordic countries. 

“We measure everything in euros,” he says, “and it has been working very well, allowing us to handle working capital requirements in each country.”

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