PARIS - Faurecia SA, which is acquiring Sommer-Allibert SA's automotive business to become Europe's largest maker of car interiors, posted a second-half loss as customers forced down prices and raw material costs rose. The company also took charges to close plants and cut jobs.
Faurecia, in which PSA/Peugeot-Citroen SA has a 53 percent stake, indicated it lost e58.7 million, or about $54 million, compared with a profit of $20.2 million in the second half of 1999. Operating profit fell to $51.6 million, from $90.4 million.
Faurecia forecast sales will rise 5 percent to 10 percent this year. The company ranked No. 17 on the Automotive News list of top 100 global auto parts suppliers with sales of $4.8 billion in 1999.
'The year 2001 should mark a rebound in our results, notably from the second half,' CEO Pierre Levi said at a press conference. 'Research and development costs will fall, and we'll begin to see the benefits' of cost-cutting efforts.
Levi said the company 'may have been a little too generous' to customers in not charging them more to compensate for higher raw-material prices. Gains in productivity weren't sufficient to make up for higher material costs, though those are likely to decline this year, he said.
Faurecia and Peugeot-Citroen plan a joint acquisition of Sommer-Alli-bert's automotive business. The acquisition, which will also involve Peugeot raising its stake in Faurecia to 70 percent, will create Europe's biggest maker of complete car interiors, car seats, instrument panels, door panels and exhausts.