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Visteon to Close, Sell Plants to Restructure

January 12, 2006|From Associated Press

DETROIT — Auto parts supplier Visteon Corp. plans to close three plants and put six up for sale under a restructuring plan announced Wednesday that could affect as many as 23 of its facilities worldwide.

It is the second major restructuring in two years for Visteon, which transferred 23 North American facilities back to former parent Ford Motor Co. last year in an effort to avoid filing for bankruptcy protection.

Under the new plan, Visteon plans to close plants in Monterrey, Mexico, and Rio Grande, Puerto Rico, in the first quarter of this year. It plans to close a plant in Buffalo, N.Y., in the third quarter, Visteon spokesman Jim Fisher said.

Visteon, which made the announcement to auto analysts in Dearborn, Mich., did not disclose the number of employees who could be affected. The company employs about 15,800 in North America, including 11,000 hourly workers at 35 plants. The company has 50,000 hourly and salaried employees at 170 facilities worldwide.

In addition to the closures, Visteon said, it is seeking to sell six plants and is working with 12 plants to transfer work to other facilities or close product lines.

Chief Executive Mike Johnston said the changes would allow Visteon to concentrate on its profitable product lines: climate control systems, electronics and interiors.

For the first nine months of 2005, Visteon lost $1.6 billion. The company, which has failed to turn a profit since it was spun off from Ford in 2000, has been hit hard by production cutbacks at the ailing domestic automakers.

Johnston said the three-year restructuring plan would cost about $800 million. About $550 million will be reimbursed by Ford under the restructuring agreement signed last fall.

Visteon shares fell 15 cents to $6.67. It shares have traded in a 52-week range of $3.14 to $10.91.

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