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Valeo will cut about 5000 jobs

The France-based Tier One automotive supplier Valeo SA (www.valeo.com) announced on Dec. 17 that, in response to a sharp drop in auto production, it had that day sent a plan for reduction of its headcount by a bit more than 9% to the European Works Council. The company cited new vehicle sales in Europe for September as being the lowest in a decade, and said it had to reduce its permanent headcount to stay competitive.

The France-based Tier One automotive supplier Valeo SA (www.valeo.com) announced on Dec. 17 that, in response to a sharp drop in auto production, it had that day sent a plan for reduction of its headcount by a bit more than 9% to the European Works Council. The company cited new vehicle sales in Europe for September as being the lowest in a decade, and said it had to reduce its permanent headcount to stay competitive.

Of approximately 5000 jobs set to be eliminated, about 1600 are in France, another 1800 or so are in other European countries, and the location of the rest was not given. At the end of November, Valeo’s global headcount stood at 54,000, 15,400 of them in France. In total, the Valeo Group has 121 plants, 61 R&D facilities, and nine distribution centers in 27 countries worldwide.

Looking ahead, Valeo said that the decline in auto production accelerated in Q4 2008. Worldwide output, it added, is expected to decrease by more than 20%. Western European output will be down nearly 30%, and France’s output will decline by 38%. Valeo’s press statement mentioned that the Group expected a sales decrease of around 25% for the fourth quarter and a negative operating margin. It forecasts a margin of around 2.6% for the full year 2008 and notes that it has “sufficient financial resources and no significant debt reimbursement due before January 2011.

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