In its first major restructuring move, Visteon Corp. is dividing its operations into two regional business units in an effort to improve customer service.
The world's second-largest supplier will appoint two regional presidents, one to head North America/Asia-Pacific and the other to oversee Europe/South America. Those executives have not been selected yet but will report to Visteon President Michael Johnston when they are in place. A company spokeswoman would not say whether Visteon is considering only internal candidates.
Customer teams will be formed in each region to improve service and speed up decision making.
Manufacturing, product development, materials management and staff functions will be centralized to achieve greater efficiencies and lower costs.
'Our new structure will be more efficient and respond more quickly to all our customers' needs,' Johnston said.
Job cuts expected
Job cuts are expected to follow as managers determine the most efficient ways to staff new departments.
Visteon leaders are seeking a 15 percent cut in structural costs - a $50 million savings for 2001 alone. All changes are targeted for completion by the end of March.
The revamped organization replaces one in which Visteon operated three business segments, sorted by product type, alongside three global sales groups.
Another 23 strategic business units, each representing a product area, handled product development, sales and other functions related to that product.
The change reduces the contact points for each customer and consolidates decision-making power where it makes sense, Visteon leaders said. When Johnston launched his review of Visteon operations in December 2000, slow response to customers was a problem identified quickly.
Customers and overseas managers have felt they had to wait for Visteon's headquarters to make decisions, said Susan Skerker, Visteon senior vice president of business strategy and corporate relations.
Even as Visteon works to streamline its structure and costs, company leaders continue to review product areas.
Management is negotiating with the UAW at its Nashville glass plant in a bid to lower operating costs and facilitate the sale of the money-losing glass operation.
The company also is discussing divestiture or partnership options for its seating and steering businesses, neither of which turn a profit.
In light of the automotive industry downturn, such actions to make Visteon leaner and more profitable are key, one analyst said.
Said Raymond James analyst Greg Salchow: 'I think that they waited longer than they should have, and I think now they're trying to make up for some lost time.'