Twenty-three Plants are Targeted in Visteon Cost-Cutting Plan

Visteon Corp., the nation's second-largest automotive parts supplier, announced a cost-cutting plan Wednesday that seeks to close, sell or revamp 23 plants hurting the company financially. The Van Buren Township-based parts maker identified only three of those plants -- in Buffalo, NY, Puerto Rico and Mexico -- that it intends to close this year.

From Detroit Free Press

VAN BUREN TOWNSHIP, MI — Visteon Corp., the nation’s second-largest automotive parts supplier, announced a cost-cutting plan Wednesday that seeks to close, sell or revamp 23 plants hurting the company financially.

The Van Buren Township,MI-based parts maker identified only three of those plants — in Buffalo, NY, Puerto Rico and Mexico — that it intends to close this year.

Spokesman Jim Fisher said two more plants would be closed, six sold and 12 underperforming plants fixed to become more profitable. He declined to say whether Visteon’s last remaining Michigan plant, in Benton Harbor, was on the list.

The three-year plan was announced in a filing with Securities and Exchange Commission and by Visteon executives who addressed the Automotive Analysts of New York conference in Dearborn, MI, where they summarized the company’s strategy and financial outlook, including estimating $10.8 billion in sales for fiscal year 2005.

Visteon estimates the plan will cost about $800 million in severance and benefits costs, contract termination, production transfer and other costs. About $250 million is expected to be non-cash costs; $400 million is expected to be reimbursable under the escrow agreement with its former parent company, Ford Motor Co.

The operations affected by the restructuring are separate from the 23 North American factories and offices that Visteon returned to Ford last year. On Oct. 1, those facilities — employing 18,000 hourly workers — were transferred from Visteon to a Ford-managed business called Automotive Components Holdings LLC.

The facilities in Automotive Holdings Components that used to be part of Visteon include 13 facilities in Michigan; two each in Ohio and Tennessee; one each in Indiana, Missouri and Oklahoma and three in Mexico.

Earlier this week, Visteon said it closed on an 18-month secured term loan of $350 million. The loan, which will expire on June 20, 2007, replaces the company’s $300-million secured short-term revolving credit facility that expired Dec. 15.

Visteon has more than 170 facilities in 24 countries and employs about 50,000 people. It has corporate offices in Van Buren Township; Shanghai, China, and Kerpen, Germany.

Visteon shares fell 15 cents to $6.67 in Wednesday’s trading. They have declined 23 percent in the past 12 months.

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