French auto-parts maker Faurecia said that its efforts to cut costs in Europe will be in place by the end of June.
Faurecia, which is 57% owned by PSA Peugeot Citroen, plans to reduce costs by 100 million euro or 6% of fixed costs in the European market, according to CEO Yann Delabriere.
“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.”
The company expects a decline in Europe of 4%-5% by the end of the year, as the cost-cutting strategy will be realized beginning with the second half, therefore results will be evident in 2014. Faurecia plans to cut 3,000 jobs in France, which is 7.5% of its workforce, by the end of 2013. The company will begin to focus on other markets and will also change its management, which will become more international, as the company aims Asia and North America.
During the first quarter Faurecia sales increased 1.7% to 4.37 billion euro and it expects ‘neutral cash flow’ for 2013. Peugeot has also sold some assets as the cash reserves continue to drop, which also raises concerns about its future ownership of Faurecia.