Visteon Corp. Will Drop Out Of Seating Business - Brief Article

Autoparts Report, March 19, 2003

Visteon Corp. said it will exit its seating business located in Chesterfield, Mich. The Chesterfield plant currently provides seating systems to Ford. Ford will source current model seating business at Chesterfield to Johnson Controls Inc. effective immediately, it said.

Visteon has previously identified its seating business as non- core. Exiting that business allows Visteon to focus its product portfolio and resources on growth-oriented businesses, the company said.

"This agreement puts us on a path to future cooperative efforts with Ford and the UAW to restructure uncompetitive businesses and grow areas of core strengths," said Peter J. Pestillo, Visteon Chairman and Chief Executive Officer.

Visteon said it will maintain involvement in seat production at Chesterfield during the transition period. During that period, the seat assembly operations will be transferred to Johnson Controls' local facilities, Visteon said.

Affected hourly employees from Chesterfield will be offered separation packages or placement at other Ford or Visteon facilities primarily within southeastern Michigan, the company said. As part of the transition plan, Visteon said salaried employees who are not placed within other Visteon facilities will be provided separation packages.

Exiting the seating business, will cost the company a special charge of about $225 million before taxes during the first quarter of 2003, it said. Consistent with previous actions taken by the company, Visteon expects a payback period for the charge of about two years.

With the transfer of seating business, Johnson Controls will now build and supply complete seat systems for a number of Ford and Lincoln models that are manufactured at the automaker's southeast Michigan plants. The supplier will provide seating systems for the Ford Focus, Expedition and Mustang, and the Lincoln Navigator and Town Car. Ford manufactures Focus, Navigator and Expedition models in Wayne, Michigan, Town Cars in Wixom, Michigan and Mustang vehicles in Dearborn, Michigan.