Utilizing an exogenous shock of Chinas war on pollution with a staggered introduction of an automatic air quality monitoring system, we show that firms local to air quality alerts (i.e., treated firms) demonstrate stronger asymmetric cost behavior after the automation, suggesting that managers in those firms allocate additional resources in anticipation of reduced employee productivity and increased labor costs that possibly occur post automation. Furthermore, we find that the increased cost-sales sensitivity in treated firms mainly appears when sales increase, while in the case of decreased sales, treated and control firms behave similarly in cost management. Our channel tests show that after automation, employee productivity decreases in the treated firms and that average employee pay significantly increases, thereby indicating that managerial anticipation of operational risks is visionary. Furthermore, the increased asymmetric cost behavior of treated firms favorably affects their market value. Therefore, establishing a management control system to enable managerial cost management seems to be value-adding, as it will effectively buffer the risks beyond a firms control.