Auto supplier Plastic Omnium SA has experienced "significant operating difficulties" in ramping up production at its Greer, S.C., plant, which is slated to be a flagship operation for the French company.
The difficulties encountered relate to the size of the plant, the complexity of the process and the increasing production since this summer, the company said in its third-quarter financial results statement Oct. 8.
In March, the supplier of front-end modules, exterior panels and trim and fuel system components announced that it was restructuring its operations in South Carolina.
Under the plan, all production at the company's Anderson, S.C., site would be consolidated into its 600,000-square-foot facility in Greer, marking this as the "largest industrial project in company history in Greer."
Plastic Omnium also said at the time that Greer would serve as the company's pilot plant for digital manufacturing and Industry 4.0 technology. The company at that time said it expects the location to employ 650 people by the end of 2019.
In its October statement, the Levallois, France-headquartered group said it had put in place a detailed action plan for the 2019-20 period across its entire industrial footprint in South Carolina. The company did not provide further details.
As a result of the difficulties in South Carolina, the French group is lowering its operating margin outlook for 2019 to around 6 percent of sales. The figure stood at more than 8.4 percent for 2018, according to Plastic Omnium's annual report.
During the first nine months of 2019, sales rose 17 percent year on year to 6.8 billion euros ($7.5 billion), outperforming the automotive production by 8.7 points.
With the exception of the Greer plant, Plastic Omnium said its entire industrial network was operating efficiently.
"The group's fundamentals are sound and the business momentum is strong, while the cost reduction and free cash-flow generation programs have been strengthened," the company added.
Plastic Omnium launched a cost reduction plan in the fourth quarter of 2018 in response to the downturn in global automotive production.
The undisclosed measures, according to Plastic Omnium, will help save 100 million euros ($110.2 million), including 50 million euros ($55.1 million) in indirect production and structural costs.