Ford takes back Visteon plants

After spinning off auto parts supplier Visteon only 5 years ago, Ford Motor today took back control of its biggest supplier. In the U.S. and Mexico, 23 Visteon facilities have been placed under the control of a new company - Automotive Components Holdings, LLC - whose mission is to clean up the operations for sale. The ACH facilities comprise the less-profitable parts of Visteon's business, while Visteon will concentrate on more promising businesses such as climate systems, electronics and auto interiors. Hopefully, the new, smaller Visteon will be profitable.

Ford?s objective is to ensure a steady flow of parts during the restructuring of the $18 billion supplier. ?Given our business conditions, we believe this is the best strategy to protect the flow of parts to Ford and, longer term, to help address Ford?s material costs by preparing most of these facilities for sale as efficient, high-performing business units,? said Al Ver, Ford vice president and chief executive and chief operating officer, Automotive Components Holdings, LLC. However, it will be interesting to see how breaking up Ford?s largest supplier into multiple suppliers fits with its recently announced strategy of streamlining purchasing and lowering costs by cutting the number of its suppliers in half.
The affected plants employ 25,000 workers, 5,000 of whom will be cut by ACH.