Detroit Bureau on Twitter

Posts Tagged ‘visteon bankruptcy’

Visteon Close To Exiting Chapter 11

But parts maker will be smaller, more targeted.

by on Sep.29, 2010

Parts making giant Visteon may soon exit bankruptcy after reaching settlement with Ford.

Ford Motor Co.’s one-time partsmaking operations, now known as Visteon, may soon be able to exit bankruptcy protection, following in the corporate footsteps of Delphi Corp., the former General Motors parts arm that this year finally wound up the longest run under Chapter 11 of any company in American history.

The two units were initially created to help Ford and GM spin off stamping and other component operations that they no longer believed possible to operate profitably, especially under their expensive union labor contracts.  But even on its own, Visteon, created in 2000, was almost immediately struggling to survive.

Free Subscription!

The maker filed for Chapter 11 protection in May of last year and many observers believed that without some assistance from former parent Ford, it would not be able to re-emerge.

But the two companies have resolved a number of outstanding issues, Ford agreeing to waive $268 million in pension and retiree benefit claims against Visteon.  The automaker has also agreed to move forward with $600 million in critical new contracts.


Johnson Controls Still Pursuing Visteon

Former Ford Motor parts maker rejects JCI proposal. Ford claims neutrality; likely working behind scenes to protect itself.

by on Jun.07, 2010

Johnson loses nothing by buying the parts operations or delaying Visteon's eventual bankruptcy emergence.

Johnson Controls (NYSE: JCI) has confirmed that it sent Visteon Corporation (OTC: VSTNQ) a letter late last week that said it remains interested in pursuing its rejected proposal to buy some of the bankrupt company’s assets. It gave no further details on how it would enhance the $1.25 billion cash bid for Visteon’s electronic and interior businesses, leaving the climate control operation behind.

The businesses JCI wants generated more than $4 billion in sales during 2009, the worst automotive market in decades. In 2009, Visteon had product sales of $6.42 billion – down $2.7 billion from the prior year. There clearly is upside potential for the eventual owner.

The latest development complicates what is already a long running bankruptcy that was filed under Chapter 11 in May of 2009. Shareholders and bondholders are currently vying to see who will control the plan that will let Visteon emerge from receivership. At stake is ownership of the assets, including the ones that JCI wants to buy – or steal, depending on your point of view.

It also could be a business tactic since Johnson Controls is a direct competitor that stands to benefit by introducing delay or complexity into the Visteon reorganization process.

Visteon, the former Ford Motor Company parts maker, has used bankruptcy to improve its balance sheet, and its first-quarter profit rose to $233 million from $2 million a year earlier. The businesses in question are largely based in China, now the world’s largest auto market.

A Ford spokesperson declined to comment specifically on the JCI Visteon issue.

“JCI is a strong company and one of our long-term suppliers. At the same time, Visteon and Ford have a long business relationship. We have been, and remain, supportive of Visteon as it works through its bankruptcy restructuring process,” the spokesperson said.

“Whatever happens, Ford is going to want to make sure that Visteon remains viable, and at some point will make its views known to the court,” said Joe Phillippi of the AutoTrends consultancy.


Visteon Goes Bust

This time, it couldn’t escape a Chapter 11 filing.

by on May.28, 2009

Ford's former partsmaking operations, Visteon Corp., had repeatedly dodged the hangman's noose, but it's finally facing Chapter 11 reorganization.

Ford's former partsmaking operations, Visteon Corp., had repeatedly dodged the hangman's noose, but it's finally facing Chapter 11 reorganization.

After a series of narrow, 11th hour escapes, the clock finally struck for long-troubled auto supplier Visteon Corp., this morning, the company announcing it is filing for Chapter 11 bankruptcy protection.

The one-time Ford partsmaking operation has been in trouble almost since its birth, in late 2000, and has depended on a series of handouts and concessions from its former parent to avoid a financial collapse up until this point.  Indeed, it was only through meeting a last-minute deadline to cover interest on its vast debt, barely a month ago, that Visteon was able to remain solvent.

But the company says that the current, deep automotive sales slump, compounded by planned summer production shutdowns, simply made it impossible to keep going without a court-protected reorganization.

Subscribe to“During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment,” said Visteon Chairman and CEO Donald J. Stebbins, in a prepared statement. (more…)