Visteon Corporation announced 13 September 2005 that it has signed definitive agreements with Ford Motor Company, outlining terms and conditions of a new business arrangement announced by the two comp…
Visteon Corporation announced 13 September 2005 that it has signed definitive agreements with Ford Motor Company, outlining terms and conditions of a new business arrangement announced by the two companies on 25 May 2005. Visteon and Ford anticipate closing the transaction on 1 October 2005. The definitive agreements are closely aligned with the memorandum of understanding (MOU) announced by Visteon and Ford on 25 May 2005 covering significant structural changes to Visteon“s North American manufacturing operations, including the transfer of 23 facilities to a Ford-managed legal entity, Automotive Components Holdings, LLC. The units listed for transfer include the following glass facilities: Autovidrio at Chihuahua, Mexico; Glass Labs at Dearborn, Michigan; Glass Systems Main Office at Allen Park, Michigan; Carlite Automotive glass distribution center at Lebanon, Tennessee; and the glass plants at Nashville, Tennessee and Tulsa, Oklahoma. The transaction will increase Visteon“s competitiveness by streamlining and improving the cost structure of its North American operations. “This is an important step on our path to creating a more competitive North American structure, a more diversified customer portfolio and a balanced global footprint to ensure we are a profitable, globally competitive supplier,” said Visteon Chairman and Chief Executive Officer Mike Johnston. “As we move closer to completing this transaction, we are progressing with plans for significant additional restructuring actions over the next several years to achieve our goal of being a winning automotive supplier. Throughout this transition, we remain focused on providing our customers with high-quality products and services.” Visteon will create a new organization focused on supporting the operations of Automotive Components Holdings, LLC in areas such as manufacturing, customer support, product development, materials management/purchasing, quality, finance, human resources, information technology and facilities management. Jim Palmer, Visteon executive vice president and chief financial officer, said Visteon and Ford have worked diligently to define how Visteon will support Automotive Components Holdings after the transaction is completed. “We anticipate that approximately 5,000 salaried Visteon employees in North America will support Automotive Components Holdings, which will reimburse Visteon for the cost of these employees,” Palmer said. “Our focus throughout this process has been to ensure that the mutual goals of Visteon and Automotive Components Holdings are achieved.” Visteon says the agreements will reshape it from a company that had USD 18.7 billion in revenue in 2004 to a leaner, more competitive USD 11.4 billion organization, based on estimated 2005 pro forma revenue. Visteon will focus its engineering and capital resources on products that have been generating significant new business with major vehicle manufacturers: interiors, climate control and electronics, including lighting. Visteon says it has significant global scale in these products and intends to strengthen its position through a more focused investment in capital, people and technology. When the transaction is completed, the plants and facilities that Visteon will transfer to Automotive Components Holdings include 13 facilities in Michigan; two each in Ohio and Tennessee; one each in Indiana, Missouri and Oklahoma; and three in Mexico. Visteon expects to recognize a significant gain related to the closing of the transaction, primarily associated with the relief of liabilities pertaining to the new business arrangement. This gain is expected to be well in excess of the USD 1.1 billion non-cash charge related to the transaction that Visteon reported for the 2Q 2005. Visteon and Ford have received U.S. anti-trust and union approvals for the transaction. Visteon Corporation is provides consumer-driven technology solutions to automotive manufacturers worldwide including the global automotive aftermarket. Visteon has about 70,000 employees and a delivery system of more than 200 technical, manufacturing, sales and service facilities located in 24 countries.