Visteon Signs Memorandum of Understanding for the Sale of Its Largest UK Operation
October 18 2007 - 8:00AM
PR Newswire (US)
VAN BUREN TOWNSHIP, Mich., Oct. 18, 2007 /PRNewswire-FirstCall/ --
Visteon Corporation (NYSE:VC) has signed a non-binding Memorandum
of Understanding (MOU) outlining the understanding and status of
discussions regarding the sale of its Swansea, United Kingdom
operation to Linamar Corporation, a Canadian- based auto parts
manufacturer. The proposed sale, which supports Visteon's
three-year improvement plan, is subject to due diligence, certain
third party agreements, definitive documentation, anti-trust
clearance and corporate approvals. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO ) The
proposed sale of the Swansea facility, which is Visteon's largest
operation in the UK, will be a significant milestone in the
company's plan to address non-core facilities and improve its
financial performance. Visteon recently disclosed that Visteon UK
Limited lost approximately $110 million on revenue of $540 million
during 2006. "This transaction will represent another major step to
achieve Visteon's profit improvement plan, while continuing to
strengthen our global engineering and manufacturing footprint,"
said Donald J. Stebbins, Visteon president and chief operating
officer. "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." This action,
which will complete the company's divestiture of its chassis
business, builds on the progress already made in addressing its
performance in the UK. Visteon previously exited its brake
business, successfully transferred unprofitable business to lower
cost countries, and significantly reduced its salaried workforce in
the UK. As part of the proposed transaction, which is expected to
be completed by year end, Visteon will transfer the manufacturing
facility and associated assets, as well as contracts and certain
intellectual property rights. The 400 employees currently employed
in the facility are also expected to transfer to the new owner.
Other details of the MOU were not disclosed. "When finalized, this
proposed transaction will provide a viable alternative to closure
for the Swansea facility, while enabling Visteon to achieve its
business objectives," said Steve Gawne, managing director of
Visteon's UK operations. "The Swansea plant will be a strong
strategic fit within Linamar's expanding driveline division." This
proposed transaction also builds on Visteon's three-year
improvement plan that was announced in 2006. As part of that plan,
the company is addressing 30 underperforming and non-strategic
operations, improving its base operations in efficiency and taking
a number of steps to grow the business. The proposed sale of
Swansea is the 20th action announced. The restructuring actions are
expected to generate annual savings of approximately $400 million.
The company has also achieved a number of other significant
milestones, including addressing two-thirds of its restructuring
items and significantly shifting its manufacturing and engineering
footprints to cost-competitive countries. Nearly 60 percent of
Visteon's hourly manufacturing personnel are now in lower cost
countries, compared with 48 percent at the end of 2005. By 2009,
Visteon plans to have 75 percent of its manufacturing personnel and
half of its engineering workforce in cost-competitive countries.
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 products 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. Forward-looking Information This press
release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-
looking statements are not guarantees of future results and
conditions but rather are subject to various factors, risks and
uncertainties that could cause our actual results to differ
materially from those expressed in these forward-looking
statements, including general economic conditions, changes in
interest rates and fuel prices; the automotive vehicle production
volumes and schedules of our customers, and in particular Ford's
vehicle production volumes; work stoppages at our customers; our
ability to satisfy our future capital and liquidity requirements
and comply with the terms of our existing credit agreements and
indentures; the financial distress of our suppliers, or other
significant suppliers to our customers, and possible disruptions in
the supply of commodities to us or our customers due to financial
distress or work stoppages; our ability to timely implement, and
realize the anticipated benefits of restructuring and other
cost-reduction initiatives, including our multi-year improvement
plan, and our successful execution of internal performance plans
and other productivity efforts; the timing and expenses related to
restructurings, employee reductions, acquisitions or dispositions;
increases in raw material and energy costs and our ability to
offset or recover these costs; the effects of reorganization and/or
restructuring plans announced by our customers; the effect of
pension and other post-employment benefit obligations; increases in
our warranty, product liability and recall costs; the outcome of
legal or regulatory proceedings to which we are or may become a
party; as well as those factors identified in our filings with the
SEC (including our Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2006). We assume no obligation to update these
forward-looking statements. Visteon news releases, photographs and
product specification details are available at
http://www.visteon.com/
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO
http://photoarchive.ap.org/ DATASOURCE: Visteon Corporation
CONTACT: Media, Kimberley Goode, +1-734-710-5000, , or, in Europe,
Jonna Christensen, +44-1268-701094, , Investors, Derek Fiebig,
+1-734-710-5800, , all of Visteon Corporation Web site:
http://www.visteon.com/
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