PARIS - Noel Goutard, Valeo SA's former chairman, had been trying for several months to regain a leading role in the company he helped build into the world's 10th largest supplier.
He succeeded last week with help from Valeo's largest shareholder, French holding company CGIP, which has been seeking in vain a buyer for its 20 percent stake in the troubled company.
The result: Andre Navarri's 10-month tenure as Valeo chairman was brought to an abrupt end. Navarri, 48, was ousted by the board of directors, controlled by CGIP, and replaced by Thierry Morin, previously the chief operating officer.
That was only a first step. At Valeo's annual meeting on May 30, shareholders will be asked to approve a new two-tier structure: Morin will head the management committee and Goutard will head the supervisory board. Valeo said Goutard, 69, who retired in May 2000 after 13 years as chairman, will oversee long-term strategy.
Hard act to follow
Succeeding Goutard was never going to be easy for Navarri. Goutard is seen as the man who in 1987 saved Valeo from a bad diversification strategy and made it into a success story. He did it by cutting costs, spinning off non-core assets and making acquisitions.
But Navarri also was to find unwelcome legacies, including the $1.7 billion purchase in summer 1998 of the electrical systems business of the former ITT Automotive.
ITT's American plants were starved of new investment, and the Rochester, N.Y., plant, which employs 3,500, suffered from bitter labor relations.
On top of this, Valeo has to contend with a slowdown in auto markets in the United States and Europe, and a rise in commodity prices.
Still, Valeo's board is hoping that Goutard, who started his professional life as a financial analyst in the United States, will find ways to lure investors.
Stock boost needed
'The name of this particular game is pumping up the share price,' said Gaetan Toulemonde, an analyst at Deutsche Bank in Paris.
Goutard praised Morin's nomination, saying he would be 'perfectly apt to implement the shareholder value policy that Valeo must lead.'
The comments come as Valeo's shares were trading at around $40, down from about $73 in January 2000. The fall is painful for CGIP. It bought its shares at an average price of about $50 and would like to make a capital gain when it sells them.
Among suppliers said to have been approached to buy all or part of Valeo in recent months are Delphi Automotive Systems Corp. and Siemens AG. PSA's Faurecia is too busy digesting the recent acquisition of Sommer-Allibert to consider such a move.
But finding a partner for Valeo - which, in Latin, means 'I am healthy' - won't be easy.
'All the obvious matches have already been made,' said Jacques Monnet, the delegate general for the French car parts suppliers federation FIEV and a former Valeo executive. 'We're reaching a stage in the cycle of our industry when consolidation is becoming more and more difficult. It would be miraculous for a large group to be complementary with another big group.'