French autoparts provider Valeo warned on Thursday that the General Motors strike was presently costing it around 160 million euros ($178 million) in sales and about 50 million euros in operating margin terms.
Valeo made the forecast as it reported that its third-quarter revenue increased 8% to 4.77 billion euros. It also verified its 2019 guidance – but excluding the one-off impact of the General Motors strike – regardless of a 6% decrease in global automotive production.
“To continue the action plan launched in the first half of the year, we are continuing to roll out our program to decrease cost by over 100 million euros and further scaling back our capital expenditures by around 200 million euros,” Chairman and CEO Jacques Aschenbroich stated.
“This will help enhance our operating margin and free cash flow generation in the second half of the year,”
As part of an ongoing evaluation of the business portfolio, Valeo also stated it would withdraw from the top column module segment and was avoiding any orders for this product line.
General Motors and the United Auto Workers union reached a tentative deal recently for a new four-year labor deal, moving nearer to ending an expensive month-long strike that shut down GM’s most profitable factories in a test of wills over the future of American auto industry jobs.
