French auto component manufacturer Faurecia is planning to reduce its workforce in Europe by 7.5 percent, equivalent to around 3,000 jobs, by the end of 2013 as it cuts back its exposure in the region. According to Frank Imbert, Faurecia Chief Financial Officer, the parts supplier plans to cut around 1,500 in 2013, the same number that was removed this year.
Faurecia expects its restructuring to result to around EUR100 million ($127 million) in charges this year and around EUR90 million in 2013. Faurecia chief executive Yann Delabriere told investors during a meeting Monday that the company’s objective with the restructuring is to stop its bleeding in Europe in 2013. Delabriere pointed out that Faurecia has lost significant cash flow in Europe, and it has to adapt.
The component maker in October updated its outlook for 2012 to indicate a decline in profit. Faurecia also forecasted a dive in European sales in the fourth quarter of 2012, particularly due to a "significant" slowdown in vehicle production. Faurecia is seeking to expand its operations beyond Europe, perhaps to lessen its exposure in the declining vehicle market in the region, which is headed to its fifth straight annual decline.
The French parts supplier saw its stock drop 20 percent this year, valuing the company at EUR1.29 billion. According to Delabriere, Faurecia aims to grow by 6 percent to 7 percent annually and achieve sales of EUR22 billion by 2016. The parts supplier will focus its growth strategy on increasing the portion of sales outside Europe from 37 percent in 2011 to 55 percent in 2016.
Faurecia also intends to increase its operating profit margin to at least 5 percent of sales by 2016, which is two years later than initially planned. This may be due to lower demand in Europe caused by the current debt crisis in the region. According to Faurecia, which is 57 percent-owned by PSA/Peugeot Citroen, the slowdown in Europe will require further restructuring with a "gradual" recovery not expected to commence until 2014.