Valeo Car Parts Maker plans 5,000 job cuts

French car parts maker Valeo said on Wednesday it was cutting its full year targets and would seek to reduce its headcount, to cope with a sharp fall in automobile production.

Carmakers and suppliers worldwide are seeking government help to cope with a deepening crisis that is engulfing the industry, as automobile sales have plummeted due to the effects of the credit crisis and the worsening economic outlook on consumer confidence.

Valeo said it expected a 25 percent drop in sales in the fourth quarter, and a negative operating margin for the period. It does not see an improvement in production levels in 2009, compared with the fourth quarter 2008.

It now forecasts an operating margin of around 2.6 percent for the full year 2008. At its third quarter sales presentation in October, the group had stuck to a revised target of a margin around 3.6 percent.

Valeo, whose major customers include French car manufacturers PSA Peugeot Citroen and Renault said it also presented its European Works Council with a plan to cut around 5,000 jobs worldwide, out of around 54,000 employees in total.

The group said job losses, of which around 1,600 would be in France, and 1,800 in other European countries, would be achieved through a plan prioritising voluntary departures.

Valeo CEO Thierry Morin said in a statement that the group has no significant debt reimbursement due before January 2011.

Source : Reuters
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]