French exhaust supplier Faurecia has replaced its co-CEO Terry Bernander just as it is gearing up to take major new business from both General Motors and Ford. Bernander ran the company's North American business.
Michel Clerc, Bernander's former co-CEO in Boulogne, France, has now been given full responsibility for Faurecia's global exhaust business, which last year generated sales of $1.1 billion.
Speaking from his home, Bernander said he resigned in June because the company was unwilling to name a single CEO to its global exhaust systems business. 'It was difficult running the company with two (CEOs) in charge. They (Faurecia) needed to make a decision. I made the decision easier for them.'
The company also named Michael Alcala, former vice president for sales and engineering operations for North America in Toledo, Ohio, to replace Bernander. Alcala will report to Clerc.
'We continue to be stable and look forward to continuing our path of planned growth,' Alcala said.
Bernander's unexpected departure comes as Faurecia is attempting to merge its culture with the former AP Automotive Systems Inc., which it acquired last December. It is also attempting to cope with Faurecia's fast-growing North American exhaust business. The division posted original equipment sales of $400 million two years ago and could exceed $600 million this year.
Bernander was part of the growth story for Faurecia, which is 51 percent owned by automaker PSA/Peugeot-Citroen. The company supplies exhaust systems, interiors, seating systems and modules. Automotive News Europe last year ranked the company the sixth-largest OEM supplier with $4 billion in European sales and $4.8 billion in global sales.
Until the AP Automotive acquisition in December 1999, Faurecia had no exhaust manufacturing capacity in North America. It acquired AP Automotive from Questor Partners Fund I, a Southfield, Michigan, investment fund managed by corporate turnaround artist Jay Alix. It was Alix who had hired Bernander to restore profitability at AP Automotive.
Just prior to the acquisition, GM had contracted with both Faurecia and AP Automotive to supply exhaust systems for the next generation of GM's massive Delta small-car platform. Faurecia will supply the next-generation Saturn small cars and Adam Opel AG in Europe, totaling more than 1 million units, according to sources.
In March of this year, Faurecia also won the exhaust system contract for Ford's 2004 model-year global small-car platform, which includes the Focus, according to sources.
In addition, late last year, Faurecia picked up the exclusive contract to supply the exhaust system for the big GM vans, including the Express and Savanna, for model year 2003. Faurecia and the former Arvin Industries Inc., now ArvinMeritor Inc., currently share the existing program.
Bernander's approach may have clashed with Faurecia's management style. Wally Rickel, a partner with Jay Alix's company, said Bernander thrived at AP Automotive because the job called for an entrepreneur. People like Bernander 'learn to make decisions on their own,' he said.
As for Bernander, he still wants to run a mid-sized company and is working with an entrepreneur to raise the equity for an acquisition. Said Bernander: 'I still have the hunger.'