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New partner doesn’t stop Valeo joint venture

Valeo is moving ahead with its cockpit module strategy, even though its joint-venture partner was sold.

The French supplier’s entry to the growing cockpit module market is based on a 50-50 joint venture with Textron Automotive Co.’s trim division. But Textron sold the division to Collins & Aikman Corp., the interior trim components and systems supplier controlled by Heartland Industrial Partners LP.

The European Commission approved the deal last month.

The Valeo-Textron joint venture was formed in August 2000. Valeo is contributing its air conditioning, electronics, switching and electrical architecture expertise. Textron Automotive brought its instrument panel and interior trim capabilities.

Valeo sees no antitrust issues arising from Collins & Aikman’s acquisition of Textron’s trim division, said Martin Haub, Valeo group vice president, products and technology.

Valeo and Collins & Aikman already have had discussions. Both companies still want the joint venture to become a leader in cockpit modules, a sector expected to reach 10 million units by 2004.

Collins & Aikman predicts cockpit modules will “provide us with over $1 billion of additional annual revenue by 2005,” said Thomas Evans, chairman and CEO. Collins & Aikman has made acquisitions aimed at achieving dominant positions in the company’s business areas, which include interior systems, acoustic systems and convertible-top systems.

Cockpit module development work is continuing as before, and quotes for new business are being done together, with the full consent of Collins & Aikman, Valeo’s Haub said.

The joint venture has yet to land a significant contract, but Haub said it is “very close to winning the first business.”

Valeo disposed of a number of businesses as part of the turnaround program orchestrated by Chairman Thierry Morin.

Valeo’s revenues were $8.2 billion in 2000. Textron’s trim division had fiscal 2000 sales of $1.87 billion.

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