By Bradford Wernle, Automotive News
Detroit, Michigan-Investors like the progress Visteon Corp. is making with its restructuring and downsizing, and chief executive officer Michael Johnston said last week the company will make still more cuts.
Visteon, which announced a quarterly profit last week, will not rule out closing or selling even more plants after it resolves the status of 23 operations the company has put on a fix, close or sell" list, Johnston said in a telephone interview 5 May.
Even after those 23 are resolved, there will be another list," Johnston said.
Those 23 underperforming or nonstrategic facilities are in addition to another 23 plants Visteon handed back to Ford Motor Co. in October.
The company, formerly Ford Motor Co.'s parts unit, expects to reduce its dependence on sales to Ford's North American operations to 14 percent by 2008, Johnston said. That would be down from 24 percent of revenues at the end of 2005.
Globally, Ford represents 48 percent of Visteon's sales today, compared with 65 percent before the 23 plants were put into Ford's Automotive Components Holdings llc last year.
Of the latest list of 23 plants, Visteon is working to resolve the status of 11 this year. It already has closed plants in Puerto Rico and Mexico and plans to cease production at four more this year.
Johnston wants a balanced manufacturing footprint with revenues divided roughly equally between Asia, Europe and North America. But Asia will be the largest of the three by 2008.
Visteon surprised Wall Street last week by turning a small first-quarter profit. Visteon posted net income of $3 million, compared with a $163 million loss for the same period a year ago.
Visteon's quarterly product revenues fell from $5000 million a year ago to $2800 million this year.
Visteon's stock has led a rally among supplier shares on Wall Street. Visteon shares, trading midday Friday 5 May at $7.65, are at their highest since early November.
Shares of Lear Corp., Johnson Controls Inc., TRW Automotive Holdings Corp. and BorgWarner Inc. are trading at their highest points since early February.