The restructuring of Visteon Corp. continues as North America's second largest automotive supplier negotiates new financial terms with its former parent, Ford Motor Co.
Under the financial agreement, Ford will shoulder a larger share of the wages paid to 17,700 Ford employees leased to Visteon since the 2000 spinoff.
Additionally, Visteon will not have to reimburse the auto maker for Ford profit-sharing payments made to the Ford employees for 2005, payable in 2006.
Ford also makes an early payment to Visteon of at least $120 million for components.
In return, Visteon agrees to continue uninterrupted delivery of components to Ford plants, to uphold its labor obligations and to continue quoting competitive prices for potential new business.
Visteon must not seek reimbursement from Ford for any material cost surcharges for components produced for Ford at some of Visteon's “non-core” North American plants.
Visteon has not identified publicly those non-core plants, but in January it said climate control, interiors and electronics would be core to its future North American portfolio, which leaves aftermarket, chassis, glass and powertrain components as non-core.
This latest financial lifeline helps Visteon as it struggles to survive in the face of significant production cutbacks and material cost hikes.
