DETROIT -- Visteon Corp. is trying to dump its U.S. steering column business.
The Dearborn, Mich., supplier is in discussions with main customer Ford Motor Co. and the UAW on how to leave that portion of its steering operation. The move would allow Visteon to focus on its better-positioned steering gears and pumps business, company executives said.
"To make it competitive in the future market, we would have to invest heavily (because of new regulations updating steering column technology)," said Jim Orchard, Visteon president for North America and Asia. "Other competitors are further along, so we think we better serve our customers letting that business migrate to them while we spend our money making the (gear and pump business) competitive."
The discussions may focus on figuring out how Visteon can re-source existing Ford steering column contracts and still keep its UAW employees busy.
Visteon officials estimate the U.S. steering column operation as a $250 million to $300 million annual business. It's one piece of a global steering unit that collects about $1 billion in annual revenues.
Visteon's U.S. steering components are manufactured at an Indianapolis factory that employs nearly 2,400 hourly workers. Even without steering column production, that plant still would produce gears and pumps.
Jim Lewis, president of UAW Local 1111 in Indianapolis, said the union already has been notified that certain column business will be outsourced beginning later this year. It expects the balance of the column work to follow it out the door, affecting a total of 414 hourly jobs. Visteon and the union also are discussing a more flexible local work agreement.
"The company is really aggressive, and they are really wanting to make some changes to make the plant better," Lewis said.
"We're looking for long-term viability, and we're going to get it."
Getting out of struggling businesses is a key priority of Visteon's turnaround efforts. The company lost $352 million in 2002, and Visteon also is negotiating with Ford, the UAW and interior suppliers to leave its seating business.
Both situations are likely to involve voluntary retirement incentives to UAW members to lower the number of workers at the plants. A resolution for seating is probably closer than a fix for steering columns.
"We'll spend more time walking away from bad businesses," Visteon CEO Peter Pestillo said in early January. "I don't care if we get smaller as long as we get more profitable."