From Detroit Free Press
VAN BUREN TOWNSHIP, MI — About 65 different companies have already expressed interest in buying some of the automotive parts plants and operations that Visteon Corp. officially spun-off Friday into a temporary new holding company, the chief executive in charge of the new firm says.
The goal of Automotive Components Holdings LLC, which is managed by Ford Motor Co., is to sell off or close all of the 23 former Visteon facilities it now owns. The holding company, called ACH, will lease about 18,000 hourly workers from Ford and 5,000 salaried workers from Visteon, and most of its $7 billion in sales comes from contracts with Ford.
Visteon, which was spun off from Ford in 2000, asked Ford to take back some parts of it after the supplier lost a total of $3.2 billion in the last four years. Visteon already had been leasing the hourly workers from Ford, reimbursing the automaker for their wages, which are widely considered high and uncompetitive for the auto-parts industry.
Al Ver, the 33-year Ford employee who is now leased to ACH as its CEO and COO, said in an interview Friday that he hopes the ACH facilities will have enough buyers.
That way, he would not have to close any plants other than the two already identified for a shut down. Those plants are in Chesterfield, MI, where 200 workers make foam for seats, and Ypsilanti, MI, where 950 workers make powertrain parts. The latter plant will have its operations combined with another facility in Rawsonville, MI.
Beyond those plants, Ver said, “I would consider it a failure if we had to close somebody.”
Ford is screening interested buyers for the ACH plants now and expects any sale to take at least nine months to complete.
“You’ll hear something, I think, relatively soon about where we’re going to head with at least two of the businesses,” Ver said.
Wilbur Ross Jr., the 67-year-old billionaire financier who intends to build a global parts maker, said late Friday that his firm, WL Ross & Co., would be interested in looking at some of the ACH facilities. He has been busy investing in auto-parts makers and recently purchased Zapata Corp., a Rochester, N.Y-based safety-parts firm, for $51.2 million.
“We would intend to look at least some of them,” Ross said.
Ver said ACH is looking for buyers who are willing to “make the investments required to make these business a success.” It also wants potential buyers to retain the salaried and hourly workers employed at any facilities they might purchase, although he acknowledged that might not be feasible.
“We want them to have jobs going into the future,” he said of the leased workers. “We feel a really strong responsibility as a company to make sure our people are taken care of. And that’s a critical part of this strategy.”
With all the chaos and inevitable consolidation facing the supplier industry, Ver, a Ford vice president who previously headed advanced and manufacturing engineering, knows that selling off nearly two dozen facilities to desirable buyers with the right conditions might take years.
In fact, Ver, 59, acknowledged that heading Automotive Components might be his last job in a long career at Ford. He also called it the strangest assignment he’s ever had.
“It’s a $7-billion company with no employees that I actually own. I either lease them from Ford or lease them from Visteon,” he said. “And success is defined as: I go out of business. It’s kind of an interesting opportunity.”
Some desirable buyers for the Visteon plants already are becoming clear, though.
On Thursday, Ford announced that it would begin having preferred parts suppliers. Ford would give preferred suppliers a bigger volume of business and longer contracts, a move that would help their financial health. In return, the suppliers would give Ford cutting-edge technology for its vehicles.
Ver said it would be natural for those preferred suppliers, or suppliers who want to achieve that preferred status, to take a serious look at the ACH plants up for sale.
“One of the things they get is the Ford book of business for some period of time,” Ver said. “If you want to be one of the few folks that are going to be a supplier to Ford Motor Co., it would certainly be in your best interest … to take some of this business and buy one of these businesses that’s a major supplier to Ford from ACH. But it’s not predetermined that that’s the case.”
Ver called Ford’s new supplier strategy and its desire to sell the ACH facilities as adjacent.
One of Ver’s most immediate challenges is managing the 25,000 workers at ACH. Aside from the 18,000 hourly and 5,000 salaried workers, there are about 2,000 workers in Mexico.
On Monday, Ver is to begin having town hall meetings with salaried workers and touring plants to meet hourly workers.
The United Auto Workers has already agreed to let 5,000 workers who are leased to ACH from Ford to be bought out. The union and ACH, Ver said, are also negotiating new operating agreements at all of ACH’s facilities.
One of the biggest risks ACH faces going forward, Ver said, is losing skilled workers.
Many workers who do not know for whom, if anyone, they might end up working seem to be looking for jobs elsewhere. Ver said ACH will be using incentive programs to keep workers in place.
Copyright 2005 Detroit Free Press. All Rights Reserved.
_______________________________________
