Visteon Signs Memorandum of Understanding for the Sale of Its Largest UK Operation
VAN BUREN TOWNSHIP, Mich., Oct. 18, 2007 / -- 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.
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.
Source: Visteon Corporation
CONTACT: Media, Kimberley Goode, +1-734-710-5000, kgoode@visteon.com, or, in Europe, Jonna Christensen, +44-1268-701094, jchris18@visteon.com, Investors, Derek Fiebig, +1-734-710-5800, dfiebig@visteon.com, all of Visteon Corporation
Web site: http://www.visteon.com/
