Visteon Offers Worker Buyouts

Blaming shrinking sales to key automotive customers, Visteon Corp. told its 8,300 white-collar workers Thursday that it plans to offer buyouts to a "significant" number of employees by the end of the year. In what analysts expect to be the first step in a much larger corporate restructuring, the Van Buren Township, Mich.-based maker of automotive interiors, steering components and fuel systems told all of its salaried employees in the U.S. that it is seeking to eliminate jobs through a voluntary buyout program.

by Alejandro Bodipo-Memba
Detroit Free Press Business Writer

VAN BUREN TWP., MI — Blaming shrinking sales to key automotive customers, Visteon Corp. told its 8,300 white-collar workers Thursday that it plans to offer buyouts to a “significant” number of employees by the end of the year.

In what analysts expect to be the first step in a much larger corporate restructuring, the Van Buren Township, Mich.-based maker of automotive interiors, steering components and fuel systems told all of its salaried employees in the U.S. that it is seeking to eliminate jobs through a voluntary buyout program.

The company’s human resources director, Chuck Hudson, e-mailed the announcement to workers at noon Thursday. Company officials did not give details or say how many jobs they want to eliminate, but they indicated they could lay off employees if not enough take the offer.

The short e-mail offered employees the option of “participating in the voluntary termination program” with details that will be spelled out Monday. Visteon officials said the buyouts would be based on seniority.

According to company officials, the buyouts will be offered only through the end of this year.

“We are having volume declines with some key customers,” said Kimberly Welch, vice president for corporate communications. “We don’t have the base of business that we would like. Just like other companies in the industry, we’re trying to get an organizational structure that’s more competitive for the market.”

Visteon, a former unit of Ford Motor Co., is the Dearborn, Mich., automaker’s largest supplier.

For the third quarter that ended Sept. 30, Visteon posted a net loss of $1.36 billion, or $10.86 a share, on revenues of $4.15 billion.

The sharp decline resulted from Ford’s plan to cut its vehicle production because of sluggish sales. In addition, Visteon hasn’t made an annual profit in North America in nearly four years.

Most of the third-quarter loss was the result of a one-time charge related to its future tax burden.

Wall Street analysts note that suppliers such as Visteon are being squeezed as automakers continue to pare down their business.

“Visteon needs to do something because Ford is losing too much market share,” said Ronald Tadross, senior auto analyst with Banc of America Securities in New York. “It looks like this is one of several steps they’ll have to take. But it is only one stitch in a huge wound that is losing a lot of money.”

Because of agreements reached with the UAW, Visteon has little leeway to shut plants that employ more than 18,000 union workers, and the company looks to be in a financial bind. Short of finding additional cuts in its fixed costs and continuing to pull back on operations, there is little Visteon can do.

“Voluntary separations are the route we want to take,” Welch said. “If not enough volunteers are generated, then we would assess other options, which would include involuntary separations.”

Shares of Visteon rose 17 cents to close at $8.10 a share Thursday on the New York Stock Exchange.

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