Faurecia, the biggest car interiors manufacturer in Europe, decided to cancel its dividend for 2012 as auto demand in Europe is set to decline.
Faurecia expects operating profit to increase in 2013 on lower costs in this market and higher sales in North America and predicts a ‘neutral’ cash flow for this year before the restructuring expenses of between 120 million euro and 140 million euro.
“The action plan we have under way to offset the ongoing drop in European vehicle production and focus on cash generation will enable us to see an improvement in our performance,” Chief Executive Officer Yann Delabriere said in the statement.
Faurecia, which is 57% owned by PSA Peugeot Citroen, plans to cut almost 3,000 in France or 7.5% of the workforce by the end of 2013, the only solution in the fight with the European economic crisis. The company expects auto sales in the region to drop by 4% to 5% this year. The fact that parent-company Peugeot has begun selling assets to cut costs, adds uncertainty over its interest in Faurecia, which announced it is ‘ready for any outcome’ and has already begun to focus more on Ford and VW, making them its biggest customers.