From AFX News Limited
DETROIT -- The plan for job cuts and plant closings announced by Ford Motor Co. on Friday includes a 2008 deadline for selling off or closing 14 plants that the automaker took over last year as part of a bailout of parts supplier Visteon Corp.
In October, Ford took back 17 plants from Visteon, which Ford spun off in 2000. The deal to bring Visteon back was aimed at making the supplier profitable and ensuring a stable flow of parts to the automaker. Ford created a subsidiary, Automotive Components Holdings LLC, for the plants and for six non-manufacturing facilities that it also took back.
Since then, two ACH plants, one in Ypsilanti Township, MI, and one in Sterling Heights, MI, have been transferred from ACH to Ford. A plant in Chesterfield Township, MI, closed in June, while plants near Kansas City, MO, and in Ypsilanti, MI, are also scheduled to shut their doors -- the first in December and the second after fall 2007.
That leaves 12 to sell, along with the six other sites, which include research, testing and storage facilities.
"We're in serious discussions with a number of buyers," ACH spokeswoman Della DiPietro said Friday. She declined to say which plants those talks involved.
Ford Chief Financial Officer Don Leclair said during a conference call that the cash proceeds from selling the former Visteon facilities would be "fairly small."
Erich Merkle, an analyst with Grand Rapids, MI-based automotive consulting company IRN Inc., said finding buyers is not likely to be easy.
"The reason they got put into [ACH] in the first place is Visteon was having a real tough time making money off them," he said.
He said the plants involved for the most part make the kind of low-tech components that are essential but don't add a lot of value to vehicles.
ACH products include glass, steering parts, instrument panels, heating and air conditioning, door trim and headlights, DiPietro said.
A big issue in the sale is finding a buyer that will keep Ford supplied.
"The book of business is part of the package. These are folks that we are going to have a relationship with going forward," DiPietro said.
The remaining 12 plants are located in or near Milan, MI; Monroe, MI; Plymouth, MI; Saline, MI; Utica, MI; Indianapolis; Nashville, TN; Sandusky, OH; Tulsa, OK; Nuevo Laredo, Mexico; and Juarez, Mexico, which has two plants.
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