Breakup speculation causes shares to surge 8.3%

Visteon CEO Stebbins steps down; industry veteran Leuliette named interim chief

Breakup speculation causes shares to surge 8.3%

Stebbins: Resignation was effective Aug. 10.
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From staff, wire reports
August 13, 2012 - 6:36 am ET -- UPDATED: 8/13/12 4:31 pm ET - with closing stock price

DETROIT -- Visteon CEO Don Stebbins has stepped down more than four years after he took the top job at the supplier. The company named industry veteran Tim Leuliette as interim CEO and chairman.

Last fall, Leuliette was reportedly among independent board members pushing Stebbins to streamline the company. Visteon has posted losses in two of the last three quarters after coming out of bankruptcy in October 2010.

Stebbins' resignation was effective Aug. 10.

Visteon shares surged on the news amid speculation that the company would be broken up. The shares closed the day up 8.3 percent at $42.01 while the Dow Jones industrial average fell 38 points to 13,169.

Guggenheim Securities analyst Matt Stover, who has a "buy" rating on Visteon shares, said instability at the board suggested there had been a difference of opinion over strategic direction and that Stebbins' exit cleared the way for pieces of the company to be sold off.

Visteon's stakes in South Korea's Halla Climate Control Corp. and China's Yanfeng Visteon Automotive Trim Systems are seen as its best assets, with an estimated value of $3 billion to $4 billion.

A Visteon spokesman declined to comment on what he called speculation.

Long history

After spinning off from Ford Motor Co. in 2000, the interiors and electronics supplier didn't turn an annual profit before entering bankruptcy in May 2009.

Stebbins, 54, has maintained a strategy of making acquisitions since at least the spring of 2011. He reinforced that strategy in an interview with Bloomberg on Aug. 2.

But Stebbins has faced contention within the board almost since the bankruptcy exit, leading to the board adding two new directors in July 2011 to avoid a proxy fight with one of its largest shareholders, Cayman Islands-based Alden Global Capital.

Since then, the company has sought a new direction, including selling its lighting unit to India-based Varroc Group for $92 million in March.

In July, Visteon announced it offered $805 million to acquire the remaining 30 percent stake in Halla. But that deal was nixed after South Korea's National Pension Service rejected the offer.

Then earlier this month, Visteon lowered its annual sales forecast, citing currency and declining vehicle production in Europe and other regions. Sales this year will be $6.6 billion to $6.8 billion, compared with a May forecast of as much as $7 billion.

"I don't think there is anything wrong with the strategy," Stebbins told Bloomberg. "We will continue to move down that path."

Official statement

In a statement today, Visteon's lead independent director Kevin Dowd said:

"Don led Visteon through a significant transformation during a challenging time for the automotive industry and the company. Under his leadership, Visteon successfully completed a major global restructuring initiative.

"Thanks to Don's leadership, Visteon today has a competitive financial, technological and geographic profile, as evidenced by customers awarding the company nearly $1.1 billion in new business in 2011."

Leuliette, 62, has been among the industry's most colorful and outspoken executives. Two years before the 2009 bankruptcies of Chrysler and General Motors, for example, he said the Detroit region and its auto industry had become a "giant disaster."
 
He touted private equity and globalization as solutions.
 
"Private equity really is a motivator," he said then. "They put enough equity in the hands of the CEO so that when he gets up in the morning and he's shaving, he's looking at one of the principal owners in the mirror, and he can't mislead him."

Until 2010, Leuliette was president and CEO of supplier Dura Automotive, leading the company to a recapitalization and sale after its emergence from restructuring.

Prior to that, he served as co-chairman and co-CEO of Asahi Tec Corp, a publicly traded Japanese manufacturer of auto parts after it acquired Metaldyne Corp, which Leuliette co-founded. He also served as president and chief operating officer of Penske Corp.

Leuliette has been a director of Visteon since 2010.

Stebbins joined Visteon in May 2005 as president and chief operating officer and was named CEO in June 2008.

Treadwell joins board

Visteon also announced today the appointments of Francis Scricco and David Treadwell to the board of directors, increasing the board from seven members to eight.

Scricco most recently was senior vice president of manufacturing, logistics and procurement for Avaya Inc. until his retirement in October 2008. Treadwell is the chairman of C&D Technologies Inc., a position he has held since April 2012.

Visteon ranks No. 22 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.05 billion in 2011.

Dustin Walsh of Crain's Detroit Business, Bloomberg and Reuters contributed to this report.

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