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August 17, 2010 12:00 AM

Faurecia grabs business in the US

Utech Staff
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    By Lindsay Chappell, Automotive News
    Detroit -- Four years ago this month, French interiors supplier Faurecia was embroiled in a European kickback scandal that resulted in the resignation of ceo Pierre Levi.

    Now Faurecia has rebounded from that low point. Under ceo Yann Delabriere since 2007, the supplier has zeroed in on the North American market -- troubled as it is.

    Faurecia has quietly picked up contracts with new automaker customers. It used a hoard of cash that now stands at $1400 million to make acquisitions amid the rubble of the 2008-09 industry collapse. Now Faurecia is shifting its technology in a bid to grab market share in the growing small-car segments.

    "The US is going to be a key growth market for us," says Michael Heneka, 60, president of Faurecia North America in suburban Detroit. "It's only recently that we've been as successful as we are here. Maybe some of it was luck."

    Hardly.

    What Faurecia has been up to lately here will be laid out at the Los Angeles Auto Show in November. While automakers trumpet fuel-efficiency gains, smaller models and roomier cabins, Faurecia will display its product strategy: a seat design that is thinner and lighter than what is common in US vehicles today, a lightweight cockpit built without the crossbar that gives instrument panels much of their weight, and a vehicle exhaust system that promises to help small-engine hybrids and other vehicles warm up on cold days.

    "We think there is an opportunity in some new technology going forward," Heneka says.

    Although the company was hurt along with the rest of the industry last year, its North American original-equipment sales topped $2650 million in 2008, before the bottom fell out. That is nearly a fifteenfold growth since 1998, when Faurecia's predecessor company claimed just $180 million in business here. Faurecia's North American sales fell to $1560 million last year.

    To break into the US interiors business, Faurecia introduced a new technology to Chrysler in 2003 for the Chrysler Sebring and Dodge Avenger: a reduced-cost method of creating padded instrument panels in a single moulding process.

    Since then, Faurecia has grabbed other US programmes, including those of the Chevrolet Equinox and Malibu, the Ford Fiesta and the upcoming Fiat 500.

    This summer, Faurecia acquired the bankrupt German exteriors supplier Plastal GmbH and its Spanish sister company Plastal Spain SA in a move that could boost U.S. business. Plastal has an innovative method of inexpensively painting small-batch exterior body parts through automated part handling. Heneka says that he is in discussions with North American customers about Plastal's system.

    Faurecia's focus on US sales is all the more striking considering that 10 years ago the name "Faurecia" barely existed here. Faurecia was formed in 1999 when PSA Peugeot Citroen's component group Ecia acquired French seating maker Bertrand Faure. Before that, its old operating units, Bertrand Faure and Sommer-Allibert, had a low profile in North America, supplying BMW's plant in Spartanburg, South Carolina.

    Delabriere told Automotive News two years ago that Faurecia originally attempted to expand its North American business too fast, signing on for unprofitable business. By 2006, the company was losing $127 million on its US contracts, he said.

    But Faurecia is in a stronger position, according to a report by analyst Gaetan Toulemonde of Deutsche Bank. Rising global volumes have made the French megasupplier profitable, thanks to a sharp reduction in its breakeven point under Delabriere, according to Toulemonde's report.

    A fuller version of this story appears in the 16 Aug edition of Automotive News.

    "

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