You have just been promoted.
The person you are replacing didn't get the job done.
You've got 18 months and 3 letters:
First 6 months - did you stop the bleeding?
Yes - you still have 18 months
No - 1st Letter - The other guy screwed it up, it's taking a while to fix - you now have 12 months.
2nd 6 months - Did you level things out, profits aren't growing - but your not bleeding out anymore.
Yes - You still have 18 months.
No - 2nd letter - I'm so sorry, I take full responsibility. I see where the errors were and I'm on it.
3rd 6 months - Are you profitable?
Yes - you still have 18 months.
No - 3rd letter - If you're lucky, you get demoted, other than that - your new letteris titled: "Severance Agreement".