Car parts maker Valeo says sales up but warns of GM strike impact
PARIS (Reuters) – French car parts supplier Valeo <VLOF.PA> cautioned on Thursday that the General Motors strike was currently costing it around 160 million euros (£138 million) in sales and around 50 million euros in operating margin terms.
Valeo made the forecast as it reported that its third-quarter revenue rose 8% to 4.77 billion euros. It also confirmed its 2019 guidance – but excluding the one-off impact of the General Motors strike – despite a 6% decline in global automotive production.
“To continue the action plan launched in the first half of the year, we are continuing to roll out our programme to reduce cost by more than 100 million euros and further scaling back our capital expenditures by around 200 million euros,” Chairman and CEO Jacques Aschenbroich said in a statement.
“This will help improve our operating margin and free cash flow generation in the second half of the year,”
As part of an ongoing review of the business portfolio, Valeo also said it would withdraw from the top column module segment and was no longer taking orders for this product line.
Last week, General Motors Co <GM.N> and the United Auto Workers union reached a tentative agreement for a new four-year labour deal, moving closer to ending a costly month-long strike that shut down GM’s most profitable factories in a test of wills over the future of U.S. auto industry jobs.
(Reporting by Dominique Vidalon; Editing by GV De Clercq)