Valeo Announces a Plan to Restructure Two Facilities in Abrera, Spain and Santo Tirso, Portugal

PARIS, June 12 -- Valeo has announced today that it has called for an extraordinary meeting of its European Works Council Bureau on June 25, 2003 to discuss proposals for the restructuring of its facility in Abrera, Spain and its facility in Santo Tirso, Portugal. Both are part of the Valeo Electronics & Connective Systems Branch.

The plant in Abrera was opened in 1999 for the synchronous production of wiring harnesses to supply Volkswagen Group's production site in Martorell. The facility is not competitive in the current environment where other suppliers have delocalized their production to countries with significantly lower costs.

Given this situation, the restructuring plan envisages that the manufacturing activities of Abrera will be transferred to other Valeo facilities in Morocco, Tunisia and Portugal. The R&D, Sales, Quality and Logistics activities would remain on the site. This restructuring, which is the only viable option, would involve the loss of 406 of the 450 jobs at the facility.

For Santo Tirso, which employs 494 people, the restructuring plan to be presented by Management envisages the concentration of the Santo Tirso production activity on the manufacturing of the highly-diversified references of engine and interior wiring harnesses. The plan would lead to a reduction of 153 jobs and the company will implement a Voluntary Separation Plan before implementing any redundancies.

These proposals include the actions necessary to find alternative jobs for affected employees through internal and external redeployment initiatives. The company will work with unions and local agencies to this effect.

Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. Valeo ranks among the world's top automotive suppliers. The Group has 132 plants, 54 R&D centers, 9 distribution centers and employs around 69,000 people in 25 countries worldwide (first quarter 2003).