Ford, Visteon Nearer to Plant Transfer

The deal should be completed Oct. 1.
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Ford

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and auto-parts maker

Visteon

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, the car builder's former unit, say they are one step closer to completing the planned transfer of plants, offices, research centers and other facilities in the U.S. and Mexico.

The transfer, which was designed earlier this year to keep Visteon from a possible bankruptcy filing, should take place Oct. 1. The two companies have signed definitive agreements that mean a new, temporary, Ford-managed business called Automotive Components Holdings will take control of the businesses at the start of next month.

Automotive Components will prepare most of the businesses for sale. All of the U.S. employees of Automotive Components will be leased employees. About 5,000 Visteon salaried employees, located mostly at facilities that will be part of the transfer, will probably be assigned to work directly with the new company.

Additionally, about 70 salaried Ford workers will be assigned to the company, as will around 18,000 Ford hourly employees who are members of the United Auto Workers union currently working in Visteon facilities.

The plants involved in the transfer include the Autovidrio glassmaking plant in Mexico, a seating-foam plant in Chesterfield Township, Mich., and a steering-components facility in Indianapolis.

In May, Ford, of Dearborn, Mich., said the agreement would result in up to $1.15 billion in charges, including at least $450 million in 2005. Ford also said at the time that the pact would result in $125 million of operating losses in its fourth quarter and an operating loss of up to $300 million next year.

Visteon, based in Van Buren Township, Mich., forecast a gain "well in excess" of the $1.1 billion non-cash charge related to the transaction that the company reported for the second quarter. Ford is Visteon's largest customer, accounting for about 64% of the company's total sales in the second quarter.