Industry downturn may mean more Visteon cuts

Supplier woes
Automotive suppliers continue to cut payrolls in response to lower production and other financial pressures. Some say 2001 will see the most job reductions in the industry since the recession of the early 1990s. Here are some key job cuts announced or taken in 2001. They include plant closures, severances and attrition.
Delphi 16,500
Dana 15,800
Lear 8,000
Visteon 3,500
TRW 3,400
Intermet 2,400*
ArvinMeritor 1,700*
Bridgestone/Firestone 1,300
Federal-Mogul 1,300
Tower Automotive 1,175*
Textron Automotive 430
Johnson Controls 300
Donnelly 225
Autoliv 200
Hayes Lemmerz 150
*Includes reductions taken during the fourth quarter of 2000

After a rough quarter that failed to meet Wall Street expectations, more tough decisions are on the table for Visteon Corp. They could include new job cuts.

Visteon already has cut 3,500 from its payroll this year, a moderate reduction in comparison with such competitors as Delphi Automotive Systems Corp. and Dana Corp.

Visteon on Friday, Oct. 19, reported a third-quarter loss of $95 million - $74 million excluding restructuring charges for its glass unit - reflecting sharp production cuts by major customer Ford Motor Co.

The fourth quarter remains uncertain, and Visteon executives are awaiting cutback decisions from Ford, Visteon's former parent.

"We're waiting to see how that shakes out, and then we'll take whatever the appropriate action is, obviously, whether it be temporary layoffs or permanent, to adjust to the schedules of the customer," Visteon President Mike Johnston said.

Other suppliers also reported dismal results last week:

  • TRW Inc. said it would consolidate its two automotive units by year end and cut about 2,400 employees from its automotive work force of about 70,000. Auto sales for the third quarter fell 7 percent to $2.3 billion, while automotive operating profit dropped 16 percent to $114 million.

  • Delphi posted third-quarter income of $26 million, an 82 percent drop. Costs related to the Sept. 11 attacks were almost $11 million. Delphi executives said fourth-quarter profit would range from $30 million to $85 million, below analysts' estimates.

  • Valeo SA said it would accelerate restructuring of its troubled U.S. operations, where labor negotiations appear deadlocked. After agreeing to an eight-year contract in 2000, management for the French supplier has spent much of 2001 lobbying for wage and benefit concessions at its Rochester, N.Y., facility. A restructuring plan will cost between $89 million and $179 million over several years, though Valeo provided no detail. Third-quarter profit plunged 91 percent to $9.88 million.

    Staff Reporter Gail Kachadourian and Sylviane de Saint-Seine of Automotive News Europe contributed to this report.

  • You can reach Amy Wilson at awilson@crain.com

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