SYLEA S.A.: Plan to Close Vire and Cahors Sites and Redeployment Measures

    PARIS--April 27, 2001--Valeo (Paris:FR; OTC: VLEEY) today announced that SYLEA S.A., a subsidiary of VALEO S.A. and a manufacturer of automotive wiring harnesses, announces that it has sent notification today to the members of its Central Works Council to attend an extraordinary meeting relating to a plan to close the Vire and Cahors sites. This meeting will be held on May 11, 2001.
    Within its sector of activity, SYLEA S.A. is subjected to increasingly strong pressure on selling prices. All of its competitors are located in low labor-cost countries.
    Subjected to these market constraints, the company has over the last few years implemented plans to improve competitiveness, reinforce employee skills and introduce new production and product standardization methods. Despite these efforts, the results of the Sylea company for the year 2000 showed a loss of 84.6 million francs and projections for the coming years show that the situation can only deteriorate further; on the basis of latest customer quotations, the current world market price of an hour's added value is less than 100 francs versus a cost of 210 francs in facilities in France.
    The company's re-sizing plan includes the ceasing of production at the Cahors - Lot site (314 employees) and the Vire - Calvados site (284 employees) and the transfer of production to the Moroccan, Tunisian, Spanish, Portuguese and French sites of the Electronics and Connective Systems Branch, which employs 17,944 people worldwide.
    The project includes support measures backed up by considerable resources dedicated to finding alternative jobs for the employees of both sites.

    - Each employee of the Vire and Cahors sites will receive at least one job offer in one of the Group's other plants.

    - In addition to these internal redeployment measures, external redeployment will be offered in the area where the sites are located.

    - Furthermore, a reindustrialization initiative has been launched in consultation with local authorities.

    These measures are in line with those currently being presented by governmental authorities.

    Sylea's objective is to avoid any outright redundancies.

    The wiring harness activities of the Valeo Group, acquired in September 2000 through the purchase of the automotive businesses of the Labinal Group, are regrouped within the Electronics and Connective Systems Branch which employs 17,944 people in 14 countries. Sylea S.A., which is part of this activity includes 6 facilities in France: Sissonne (Aisne), Vire (Calvados), Labastide (Tarn et Garonne), Bellegarde (Loiret), Cahors (Lot), Montigny le Bretonneux (Yvelines).
    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 amongst the world's top automotive suppliers. The Group has 175 production sites, 41 R&D centers and 10 distribution centers and employs 75,000 people in 25 countries worldwide.
    For more information on the Group and its businesses, please consult our Web site: www.valeo.com