Visteon Finalizes Sale of its Biggest UK Operation
Visteon Corporation has announced that it has signed a Memorandum of Understanding to outline the status of discussions and understanding relative to the sale of the Swansea Facility, the company’s largest UK operation. The proposed sale to Linamar Corporation, an auto parts manufacturer based in Canada, is said to be subject still to particular third party agreements, corporate approvals, anti-trust clearance, and definitive documentation.
Donald J. Stebbins, Visteon President and Chief Operating Officer, further explains the company’s Swansea plans: “This transaction will represent another major step to achieve Visteon’s profit improvement plan, while continuing to strengthen our global engineering and manufacturing footprint. We are committed to working with our customers, employees, unions and Linamar to reach final agreements and bring the transaction to closure as quickly as possible.”
Specifically, the proposed transaction is said to indicate that Visteon will be relinquising the manufacturing facility, associated assets, contracts, and particular intellectual property rights. The existing manpower, 400 employees in total, would be transferred to the new owner as well.
Steve Gawne, Visteon Managing Director for the UK Operations, has this to say: “When finalized, this proposed transaction will provide a viable alternative to closure for the Swansea facility, while enabling Visteon to achieve its business objectives. The Swansea plant will be a strong strategic fit within Linamar’s expanding driveline division.”
This anticipated sale of the Swansea is considered as a significant milestone regarding Visteon’s prior plans of tackling non-core facilities, as well as improving its financial woes. Just recently, the company has disclosed that the company’s UK division lost more or less $110 million on revenues during 2006. As a result, Visteon has launched a three-year improvement plan in that same year, with a specific target of addressing and solving 30 non-strategic and underperfoming operations. In fact, the coming sale of Swansea is already the 20th measure implemented. Prior to Swansea, the company had already parted with its brake business, relocated unprofitable business to countries that are more cost competitive, and considerably reduced its workforce in the UK. To date, almost 60 percent of the company’s hourly production labor force has been transferred to lower cost countries, as compared to the 48 percent statistics of same situation in 2005. By 2009, Visteon is planning to increase the said existing 60 percent into a 75 percent, as it plans to shift more of its manufacturing and engineering employees in other cost competitive countries.
These restructuring measures are expected and estimated to generate annual savings of about $400 million.
Below is a brief profile of Visteon Corporation, as per the company’s press release:
Visteon Corporation:
Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of Aftermarket Performance Parts and services to aftermarket customers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany; the company has facilities in 26 countries and employs approximately 43,000 people.