Ford, Visteon Ask UAW to Back Restructuring Deal That Would Allow Spinoff of Unprofitable Plants

DETROIT May 24, 2005; Dee-Ann Durbin writing for the AP reported that United Auto Workers union leaders approved a restructuring plan for Visteon Corp. on Tuesday that would allow the struggling auto supplier to spin off 15 unprofitable plants, union officials said.

Under the plan, former Visteon parent Ford Motor Co. would put 13 of the 15 plants in a holding company and try to sell them. Those 13 include seven plants in Michigan, two in Tennessee and one plant each in Ohio, Indiana, Missouri and Oklahoma. Nearly 18,000 hourly workers are employed at those plants.

Plans call for closing one of those plants, in Macomb County's Chesterfield Township, in mid-2006, however. That plant had been targeted for closing in 2007.

The remaining two plants, a chassis maker in Sterling Heights and the Rawsonville parts plant near Ypsilanti, would be absorbed back into Ford, which spun off Visteon in 2000.

The plan was hammered out between Visteon and Ford and needs the approval of local UAW workers to go into effect. UAW members at the 15 plants covered are expected to vote on the plan by June 5, UAW spokesman Paul Krell said.

UAW Local 849 president Eugene Morey, who attended the meeting, said workers at his plant, Visteon's Ypsilanti facility, would be transferred to the Rawsonville plant over the next few years.

Ford plans to trim the work force at the affected plants by offering buyouts to up to 5,000 workers, Morey said. But Morey said buyers of the plants must honor the labor agreements that are in place.

"Ford did a very good thing. They took care of their people," Morey said. "The next step now is trying to find manufacturing people who are interested in helping people work in this country."

A message seeking comment was left for a Visteon spokeswoman Tuesday. Ford spokesman Glenn Ray wouldn't discuss the meeting and said the plan hasn't been completed.

"Discussions with Visteon are continuing and we're working toward an agreement that is mutually beneficial to both companies," Ray said.

Ford and Visteon began talks in September aimed at allowing Visteon to shed some parts of its business to improve efficiency while still meeting its obligations to Ford. Ford still makes up around 70 percent of Visteon's business.

Morey said the plan is better than the alternative of Visteon declaring bankruptcy, an action that would put union contracts in jeopardy. Several auto suppliers have declared bankruptcy in recent months because of the same high steel costs and competitive pressures that Visteon faces.

Visteon reported a loss of $188 million for the January-March period, compared with a net income of $20 million a year ago. Sales edged up to $4.99 billion from $4.97 billion last year.