Valeo and Textron Automotive Company (TAC) today announced the signature of a memorandum of understanding to create a unique partnership that leverages the strengths of both companies cost-effectively. The alliance of the two automotive suppliers will create a global powerhouse in cockpit modules through the setting up of a 50/50 joint venture. The joint venture will be in operation within the next few months.

Under the terms of the agreement, Valeo and TAC will combine their sizeable technological expertise and engineering resources across the Americas, Europe and Asia, creating genuine global coverage to satisfy customer needs. The joint company, with facilities in each of the above continents, aims to become the leader in a cockpit market expected to reach 10 million units by the year 2004.

The companies are totally complementary in terms of products, customers and geography. TAC is a leader in the field of instrument panels and automotive interior trim. Valeo is a leader in air conditioning systems, electronics, switching, and, with the imminent acquisition of Sylea, electrical architecture. The combined strengths and global reach of the two groups will enable the new company to offer stand-alone innovative cockpit module solutions to customers.

The joint company will be led by a worldwide management structure with three regions: Americas, Europe and Asia. Ultimately, all cockpit programs would be integrated into this structure. Commenting on the agreement, Andre Navarri, Chairman and CEO of Valeo, stated: "The partnership between Valeo and TAC is a real breakthrough based on a perfect fit in terms of product and service range and geographical spread. The joint company will provide real innovations in cockpit systems and modules for our customers. We already have existing business in this area. We intend to build on this fast and win new contracts in the near future. I'm convinced that the new joint company is poised to become a global leader in cockpit modules".

Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks, and ranks among the world's top automotive suppliers. The Group achieved sales in 1999 of 7.7 billion euros. It has 118 plants, 39 R&D centers, 10 distribution centers and employs 55,000 people in 20 countries worldwide.

For more information on the Group and its businesses, please consult our Web site: www.valeo.com.