PARIS — Despite cost-cutting demands from automakers that will cause its company to miss its profit goal, the Burelle family said it will retain control of French plastics supplier Cie. Plastic Omnium SA.
Laurent Burelle, who takes over for his elder brother, Jean, as chairman on July 1, reaffirmed the family's desire to keep control of the company. Jean, 62, and Laurent, 51, are the sons of Pierre Burelle, who founded the business after World War II.
Laurent Burelle takes control while the auto industry is in the throes of a slowdown and automakers are demanding price cuts from their suppliers. Plastic Omnium is negotiating with DaimlerChrysler AG over its demand for a 5 percent price cut.
In such an environment, "We won't reach an operating margin of 6 percent in 2001," Jean Burelle said when presenting the company's financial results for 2000.
He will move from chairman of Plastic Omnium to chairman of holding company Burelle SA, replacing his father.
In 2000, Plastic Omnium generated a profit margin of 4.9 percent, with profit of $35.3 million on sales of $1.04 billion.
"For the time being, we just want to make products and face the storm," Burelle said.
Plastic Omnium holds a 50 percent stake in Inergy Automotive Systems, which it formed in August with Brussels, Belgium-based Solvay SA. Beginning July 1, Paul-Henry Lemarie, brother-in-law of Jean and Laurent Burelle, will head Inergy. He will be taking over for Laurent.
About 10 million new cars, out of a total of 53 million sold globally last year, were equipped with Inergy fuel tanks.
The joint venture with Solvay is part of Jean Burelle's strategy to expand abroad and diversify Plastic Omnium's customer base beyond traditional clients PSA/Peugeot-Citr"en SA, Renault SA and Fiat Auto SpA.
Plastic Omnium has several plants outside of France, including one at Ramos Arizpe, Mexico, that supplies bumpers and fuel tanks for the Pontiac Aztek and Buick Rendezvous.
The company's largest foreign plant is in Anderson, S.C., but it is losing money.
Plastic Omnium does not expect its U.S. operations to be profitable in 2001, despite a decision earlier this year to cut the Anderson plant's staff by 10 percent.