Visteon Corporation on Thursday confirmed a long-rumoured move: it will close its seating business located in Chesterfield, Michigan, which sells seats to Ford. Johnson Controls will take over supply immediately.
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“Visteon has previously identified its seating business as non- core. Exiting that business allows [us] to focus [our] product portfolio and resources on growth-oriented businesses,” Visteon said in a statement.
In support of Visteon’s strategy to pursue growth in its core businesses, Ford will award additional interiors business to Visteon’s Utica, Michigan, facility.
“This agreement puts us on a path to future cooperative efforts with Ford and the United Auto Workers [union] to restructure uncompetitive businesses and grow areas of core strengths,” said Visteon chairman and chief executive officer Peter Pestillo.
Visteon will remain involved in seat production at Chesterfield during the transition period during which the seat assembly operations will be transferred to Johnson Controls’ local facilities.
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By GlobalDataAffected hourly employees from Chesterfield will be offered separation packages or placement at other Ford or Visteon facilities primarily within southeastern Michigan.
As part of the transition plan, salaried employees who are not placed within other Visteon facilities will be provided separation packages.
Exiting the seating business is expected to cost Visteon a special charge of about $US225 million before taxes during the first quarter of 2003.
Separately, Johnson Controls said it would build and supply complete seat systems for a number of Ford and Lincoln models that are manufactured at the car maker’s southeast Michigan plants and would “assume operational responsibilities” for current seating production for these vehicles at a Chesterfield plant site previously operated by Visteon Corporation.
Johnson said it would provide seating for the Ford Focus, Expedition and Mustang, and the Lincoln Navigator and Town Car.
Details on the terms of the agreement were not released.
Johnson COntrols said seating assembly operations would be relocated in 2004 to its other manufacturing sites within southeast Michigan, including one new facility. Company officials said locations for this work will be identified at a future date.
