China’s third-largest Aluminium producer Hangzhou Jinjiang’s dream for Aveyron based SAM Technologies fades in 2 years

The surprising takeover of the Arche group's auto parts foundries by China's third-largest aluminium producer, Hangzhou Jinjiang, only lasted two years. The fall in diesel automotive sales and the promised investments which were not made in these factories are the major cause to be considered, as 90% of the production is supplied to Renault.

It all began as a miracle in the declining industrial basin of Decazeville (Aveyron). It's an unexpected recovery given the offers of the last nineteen months. Sébastien Lallier, CGT union representative for the SAM Technologies auto parts foundry congratulated. This large factory, located in Viviez, and the other units of the Arche group in recovery, FVM in Meurthe-et-Moselle and Alfisa in Spain, were taken over by the Chinese group Hangzhou Jinjiang at the helm of the Paris commercial court.

Hangzhou Jinjiang, China’s third-largest producer of aluminium, was the only buyer since the withdrawal of the Canadian Linamar. The Chinese group employing more than 20,000 peoples assured to invest € 42.5million to upgrade the ageing factories and lay-off only 20 of the 432 jobs. The company is renamed as Jinjiang SAM.

Hangzhou Jinjiang was not unknown in Occitanie region of France, as in July 2017 it had taken over Sabart Aero Tech in Ariège, a former Pechiney factory that manufactures aluminium alloy billets.

Yun Xu, President of Jinjiang Industries Europe (JIE), a subsidiary of Hangzhou Jinjiang Group said: "Our strategy is to achieve vertical integration by extracting, producing pure aluminium, alloying at Sabart, forging and stamping.”

But in Viviez, the relief of the recovery quickly gave way to concern. Sébastien Lallier said: "The buyer made a point of expanding the building and buying machines, but the promised investments never arrived.”

“They bought machinery at auction from a foundry in the Netherlands, including a melting furnace. But adapting it to our needs would have cost more than a new oven! We waited for the devices to break down to repair them.”

During the takeover, the manufacturer committed to buying parts for €85 million per year until 2025. It has ordered new housings for hybrid and electric cars, and the company must buy machines to produce them.

But its turnover which was €50 million over the first eight months of 2018 dropped with the fall in sales of diesel cars after the Volkswagen emissions scandal, also known as Dieselgate or Emissionsgate. In June 2019, JIE announced the loss of 120 jobs at FVM. The situation is also tense in Jinjiang SAM. Thierry Cavinato, Yun Xu's right-hand man, is organizing a referendum on moving to 4 teams by working weekends and relocating machining to Bosch in Rodez and 80% of employees refused.

“Furious, Mr Cavinato organized a general assembly in July, when it was 45 ° C in the workshops, to tell us that we had not understood anything", says Ghislaine Gistau, of the CGT.

“During the general assembly, the delegates receive an invitation to an extraordinary social and economic committee (CSE) on the Imagine our incomprehension: we have to work more and do partial unemployment.” says the trade unionist.