Ford Motor Company is to take over 24 of the 137 plants run worldwide by US automotive supplier Visteon (Van Buren Township, Michigan; www.visteon.com). Visteon, which was spun off from Ford in June 2000, still receives 70% of its orders from the motor manufacturer. The memorandum of understanding signed between the companies provides for significant structural changes to Visteon´s North American manufacturing operations.

Visteon´s reliance on Ford as a client will diminish significantly and, says chairman-elect and chief executive officer Mike Johnston, will “create a more competitive business structure for Visteon in the United States and will remove a number of structural barriers to the company´s long-term sustainable success”.

The changes centre around the transfer of the 24 facilities and associated assets, including machinery, equipment, tooling, inventory, purchase and supply contracts and prepaid assets to a separate company that will be acquired by Ford. Visteon will have no ownership interests in the new entity.

Included in the changes is the termination of current leasing arrangements for around 17,400 Ford-UAW (United Auto Workers) employees, the transfer of USD 1.5 bn of deferred gains, and liabilities for post-retirement health care and life insurance benefit obligations totalling around USD 2 bn to Ford.

Visteon said that going forward, the smaller, leaner company will focus its engineering and capital resources on interiors, climate control and electronics, products which have been developing significant new business with major vehicle manufacturers.

Visteon and Ford are expected to sign a definitive agreement on or before 1 August, with the transaction closing in the third quarter of 2005.