From AFX News Limited
DEARBORN, MI — Shares of Visteon Corp. surged as much as 6 percent on relatively heavy volume Tuesday amid recent reports of restructuring expected at the loss-riddled auto parts maker.
Visteon’s stock added 27 cents, or 3.8 percent, to close at $7.37 but remained well below its 52-week high of $12.50. Trading volume of more than 2.5 million shares easily eclipsed the daily average of 1.5 million.
The rally comes along with mounting concerns of an imminent shake-up at the Ford Motor spin-off.
The world’s second-largest automotive supplier indicated last month that big changes were ahead as cost structure and rising raw materials prices “will challenge our operating performance for the rest of the year.”
Visteon posted a huge $1.36 billion loss for the third-quarter due mainly to $1.2 billion in special charges, including a noncash charge of $872 million in anticipation of rising taxes.
The Detroit News followed by reporting that work-force reductions at the Dearborn, Mich.-based company are likely to affect thousands.
Rod Lache of Deutsche Bank said shortly after the report that he expects restructuring news to hit early next year and urged clients to stay away from the stock.
“Visteon is a company that is hemorrhaging where accounting transparency is poor,” he said, adding that Ford, in a move he predicted will cost billions of dollars, will likely help bolster “the failing company.”
Last week, however, it was Visteon that stepped up to help Ford , which currently accounts for about 71 percent of Visteon’s total revenue.
With rival General Motors’ Chevrolet making a move to surpass Ford as the best-selling brand in the U.S., Visteon reportedly told 8,100 salaried employees in an e-mail that it would give a $1,000 bonus for every 2004 Ford vehicle they purchase.
Separately, Visteon announced a slew of new products at the SEMA Show in Las Vegas on Tuesday, including new hands-free phone kits, ignition coils, windshields and radiators.
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