By Rhoda Miel, UT Akron BureauSouthfield, Michigan-Automotive seating and interior trim supplier Lear Corp. may close as many as 20 plants as part of a restructuring, beginning with five facilities in North America and Europe.The company said in a 27 June announcement that it is eliminating excess capacity, lowering operating costs and aligning capacity with demand. The changes may include layoffs and moving certain manufacturing operations to lower-cost countries.Full details on the restructuring plan will be announced when Southfield-based Lear releases its second-quarter financial results 29 July. Lear makes interior parts including instrument panels, door panels and centre consoles. About $1100 million of its total $17 000 million in global sales comes from injection moulding in North America.The firm is the latest company in the North American auto industry making changes to improve its bottom line.General Motors Corp. and Ford Motor Co. – Lear’s biggest customers – have cut production in the wake of a slowdown in sales, particularly of high-profit sport utility vehicles, noted Martin King, a Standard & Poor’s credit analyst. The New York ratings agency put Lear on credit watch, with the potential to lower its investment rating of BBB- if S&P senses problems with the restructuring strategy.Lear has ample liquidity, though, S&P noted, unlike competitor Collins & Aikman Corp., which filed for Chapter 11 protection in May.Lear posted $4300 million in sales for the first quarter, with profit of $15.6 million, down from sales of $4500 million with a profit of $91 million for the same period a year earlier.In April, Lear said it was on track for sales of $17 500 million to $17 700 million for the year, which would be a boost over the 2004 total of $17 000 million.However, the restructuring will cost the company in the short term, with Lear officials estimating pre-tax costs of $250 million. The company will provide revised financial guidance for its 2005 expectations when it lays out its restructuring plans at the end of July.”
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