Forvia Plans Job Cuts

Forvia shares climbed on Monday following the announcement that the company plans to reduce up to 10,000 jobs, resulting in an estimated annual savings of about 500 million euros. This move comes as Forvia adapts to the electric-vehicle policies set forth by the European Union.

Job Reduction for Increased Competitiveness

Shares in the French car supplier saw a 4.3% increase to EUR16.76, reaching as high as EUR17.02 by 0838 GMT. The restructuring plan includes trimming up to 10,000 jobs, equating to approximately 13% of its workforce. These reductions will be achieved through a combination of job cuts, attrition, and the elimination of contract positions.

Forvia emphasized the necessity of maintaining competitiveness in light of Europe's shift away from gas-powered vehicles. Despite car-sale volumes still lagging behind pre-pandemic levels in Europe, the company also aims to better serve a changing client base due to the expansion of Chinese electric-car makers in Europe.

Financial Performance and Outlook

In addition to the job cut announcement, Forvia disclosed its 2023 results on Monday. While earnings before interest and taxes fell about 4% below expectations, analysts at Citi noted that net cash flow exceeded projections.

Forvia's strategic restructuring reflects its commitment to remaining a key player in the evolving automotive landscape while ensuring financial stability moving forward.