Lear has changed its profit forecasts. The US-based group, supplier of seats and electronic systems for the major automakers, announced that based on new estimates, net sales could decrease from the previously expected 21,7 billion euro, to 19,8 billion in 2019, which is equal to a -5% on 208. Lear runs for cover by cutting costs throughout the group.
Automotive’s fault
Lear indicated that its financial results for the first half of the year were negatively influenced by the constant decrease in production volume by the automotive industry, among other macro-economic factors such as the continuous weakening of other currencies in comparison to the USD. “We had foreseen an increase in production volumes for the industry in the second half of 2019 and a consequent increase of our sales and profits – states the group’s president, Ray Scott -. Now we believe that the general macroeconomic and industrial factors will continue to put pressure on our sales and profits for the rest of the year”.
Reaction
The general slowing of the market has an effect on the US giant’s revenues, but the company is already facing the situation. “We are reacting to the current context aggressively: we already started restructuring certain processes and areas and are developing an operational and organizational plan to further reduce costs and improve our profitability”, continues Mr. Scott. The same president announced its intention to put between 60 and 200 million of funds towards the internal restructuring process, to “improve manufacturing activities and organizational efficiency, but also to reposition our operations so that they can have constant success in the future”.
The second quarter
According to the numbers published by Lear, sales in the second quarter should be of about 5 billion USD, down 10% in comparison to the same period of the previous year. While following what reported by Europe.autonews.com, Lear could shut-down its Detroit plant, where there are currently 76 employees working, indefinitely. The work conducted on this site would be shifted towards its Traverse City site (also in Michigan), where the Detroit employees will be given the opportunity to transfer.
