Updated: Visteon Looking to Reduce NA Interiors Business
Visteon's North American plant currently employs 300 people but the company hasn't mentioned what exactly will happen after the factory will be sold.
In order to end its North American operations, Visteon also wants to end contracts with Detroit 3 and Nissan. General Motors and Ford have already confirmed the decision while Chrysler refused to comment on the reports until the two sides managed to end the deal. Nissan declined to comment on the reports.
Visteon spokesman Jim Fisher also confirmed, saying that this is nothing than a part of Visteon's strategy to exit non-competitive and non-core markets, including North America.
Visteon is currently operating under Chapter 11 protection after filing for bankruptcy in May. The company posted at that time total assets amounting to $4.58 billion and a total debt of $5.32 billion.
"Visteon is taking this step to maximize the long-term value of the company. During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment," Visteon Chief Executive Donald Stebbins said in a statement when filing for bankruptcy.
Updated on October 7th: we talked to James Fisher, Visteon spokesman, who emphasized that the company doesn't want to sell the Highland Park plant but to work with Chrysler on re-sourcing of certain interior parts designed for the US-based car manufacturer at the Highland Park and Saltillo facilities.
"As one part of that agreement, Chrysler may choose to have another supplier purchase the equipment and assume production at these plants. If Chrysler chooses that course, Visteon will work with Chrysler to find a buyer for the equipment. If no suitable buyer emerges by March 31, 2010, then the agreement calls for Chrysler to purchase the equipment at the two plants. It’s worth nothing that the agreement also provides for Visteon and its affiliates to remain a Chrysler supplier on a number of product lines other than interiors," he said.
Additionally, Chrysler won't pay $31 million for the supplier to move the production lines as the agreement between Visteon and the carmaker doesn't call for work to be moved from Highland Park to Saltillo.
According to Fisher, Visteon does not intend to end contracts with Detroit 3 or Nissan but to reduce its interior business, which includes the aforementioned companies among its main customers. As a result, North America is not a non-core market Visteon as this applies only to the interiors business.