October 17, 2019 / 5:17 AM / a month ago

GM strike hits French car parts supplier Faurecia

FILE PHOTO: The sign of French maker of car interiors Faurecia is pictured on the company's showcase on media day at the Paris Mondial de l'Automobile, October 2, 2014. REUTERS/Benoit Tessier/File Photo

PARIS (Reuters) - French car parts group Faurecia (EPED.PA) said on Thursday a hit to sales from a month-long U.S. strike at General Motors Co (GM.N) had ratcheted up in October, following a third quarter in which revenues missed forecasts.

Shares in the auto sector supplier, 46% owned by Peugeot maker PSA (PEUP.PA), were down 6.5% at 0840 GMT, leading losses on France’s SBF120 SBF120 index of the most actively traded stocks.

The GM strike over pay and job security, which began on Sept. 16, cost Faurecia 23 million euros ($25.5 million) in the July to September quarter, finance chief Michel Favre told a conference call.

The hit could reach 40-45 million euros in October, he said.

GM and the United Auto Workers (UAW) union said on Wednesday they had reached a tentative deal for a new four-year labor deal, opening the door to an end to the strike, but it still needs to be ratified by UAW members, which could take two weeks.

Faurecia kept its 2019 guidance for sales growth to outperform the broader market by 150-350 basis points, based on constant exchange rates and excluding the impact of its takeover of Clarion.

It is also targeting an increase in its operating income and an operating margin of at least 7% for 2019, even though it is now banking on a 6% drop in light vehicle production in 2019, versus the 4% fall expected previously.

Faurecia said third-quarter sales had risen by 4.3% from a year earlier to 4.185 billion euros. They were down 3.7% at constant exchange rates and excluding the Clarion acquisition.

“Third-quarter sales were slightly below expectations as the drop in seating sales is bigger than expected,” analysts at Jefferies said in a note.

Reporting by Gilles Guillaume; Writing by Sudip Kar-Gupta and Sarah White; Editing by Mark Potter

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