Before the COVID-19 pandemic struck, Faurecia was expecting sales growth and profit improvement for 2020, following its upward trajectory over the past few years.
But that outlook ran aground in the first quarter, when the French seating, interiors and electronics supplier reported a sales decline of 13.5 percent to $4.1 billion, primarily as a result of the impact of the coronavirus.
Faurecia has since withdrawn its ambitious financial objectives for this year.
The supplier instead has been reducing costs, product-development expenses and new investments to mitigate the business impact of the crisis. Measures have included putting employees at all sites on temporary furlough. The company said it plans to reduce capital expenditures by 30 percent to better manage its R&D programs and working capital.
Faurecia also was forced to temporarily shutter many of its production sites around the globe. But Michel Favre, Faurecia's finance director, said in a call with investors last month the company expects its Chinese factories to return to 100 percent capacity by the end of May.
"To face this unprecedented crisis, we have immediately put in place all the necessary action plans to get through this period," CEO Patrick Koller said in a statement. "I am confident in our ability to get through this period, which I believe will lead to a new economic paradigm based on resilience and stronger collaboration and support across the whole supply chain."
As of March 31, Faurecia's cash position stood at $2.4 billion. The supplier also has $1.53 billion of available liquidity.
In April, Faurecia and Volkswagen of America began a partnership to produce hospital masks and gowns at one of Faurecia's factories in Mexico. According to Volkswagen, Faurecia has been able to significantly ramp up production to make an estimated 250,000 masks and 50,000 gowns per week.
