Faurecia Cost-Cutting Plan to Be Deployed by End of Next MonthMathieu Rosemain
Faurecia, Europe’s largest maker of car interiors, said its efforts to reduce costs on the continent will be in place by the end of next month as the automobile market in Europe heads for a sixth consecutive year of decline.
The French auto-parts maker, 57 percent owned by PSA Peugeot Citroen, is cutting expenditures by about 100 million euros ($130 million), or about 6 percent of fixed costs in Europe, Chief Executive Officer Yann Delabriere said today at a shareholders meeting in Paris.
“This plan will be fully deployed at the end of first half 2013,” Delabriere said. “It includes an industrial restructuring plan in western Europe, in Germany, Spain, Portugal and France.”
Delabriere, who confirmed a full-year forecast for a decline of 4 percent to 5 percent in the European car market, said the first benefits of the cost-cutting plan will be realized in the second half. Full effects will be evident in 2014, he said.
Faurecia plans to eliminate about 3,000 jobs in its home region, or 7.5 percent of the workforce, by the end of this year. Like its struggling majority owner and other carmakers in Europe, the Nanterre-based company is seeking to trim capacity and expand elsewhere.
The company’s management will become more international to reflect burgeoning global operations, Delabriere also said today. Faurecia will “significantly change” the management board by the end of the year as it focuses on industrial growth in Asia and boosting profitability in North America, the CEO said.
Faurecia rose as much as 3.9 percent and was up 3.1 percent at 16.85 euros as of 12:09 p.m. in Paris. The stock has gained 44 percent this year.
The parts manufacturer’s first-quarter sales rose 1.7 percent to 4.37 billion euros from a year earlier, it said April 23. The company reiterated a full-year forecast for “neutral” cash flow excluding restructuring expenses of 120 million euros to 140 million euros.
Peugeot has sold assets to shore up its balance sheet as cash reserves dwindle, prompting uncertainty about its continued ownership of Faurecia. Peugeot said yesterday that it isn’t planning to sell new shares, after a report by French online newspaper La Tribune.
The carmaker is discussing an eventual share sale, La Tribune said, citing an unidentified person close to the matter. The controlling Peugeot family has discussed what percentage of dilution would be acceptable for them, the newspaper said.