From The Wall Street Journal via MEMA Industry News

VAN BUREN TOWNSHIP, MI -- Visteon Corp. is moving closer to a deal under which as many as 15 of its U.S. plants would be sold or returned to former parent Ford Motor Co., according to people familiar with the talks.

Ford and Visteon executives have said for several weeks they had developed a concept for restructuring Visteon's operations, but they haven't disclosed details of their plans. Details of the restructuring, including its cost to Ford, will hinge on the outcome of talks under way among company representatives and the United Auto Workers (UAW), which represents roughly 17,000 U.S. workers at Visteon. Those talks could break down without an agreement. In addition, UAW members at Visteon would likely have to ratify any deal.

The plan under consideration would involve Visteon transferring the bulk of its UAW-represented factories to a new company or to Ford, according to the people familiar with the talks. The operations transferred to the new company likely would be offered for sale. Ford is working to line up potential buyers, according to these people. Ford likely will offer buyouts and early-retirement packages to Visteon workers, who otherwise could claim layoff benefits or a job from Ford because they are still technically Ford employees, under the terms of Visteon's spin-off.

Visteon's downtrodden shares surged $1.24, or 32 percent, on Thursday to $5.06 in 4 p.m. composite trading on the New York Stock Exchange after Bloomberg News reported details of the proposed restructuring. Ford's shares rose nine cents, or 0.9 percent, to $10.01, also on the "Big Board."

Visteon has nearly $19 billion in annual revenue and 70,000 employees world-wide. Visteon's UAW-represented workers who came from Ford still earn Ford levels of wages and benefits, or about $62 an hour. Those labor costs are significantly higher than those at most of Visteon's competitors, even those whose U.S. workers are represented by the UAW.

A Ford spokesman said "we remain focused on the talks and coming to an agreement with Visteon that's beneficial to both of us." A Visteon spokeswoman couldn't be reached for comment.

Visteon also got a lift earlier in the week when it announced it had hired Donald Stebbins, formerly a senior executive at rival supplier Lear Corp., to be president and COO, effective May 23. Stebbins's decision to jump to Visteon was seen as a signal that the talks with Ford and the UAW over the Visteon overhaul were close to a resolution.

Visteon warned investors earlier this month that without a significant restructuring agreement with Ford, the company's cash flow wouldn't be sufficient to cover debt payments and capital spending. Visteon also disclosed accounting problems that delayed the filing of its 10-Q quarterly report with the Securities and Exchange Commission.

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