Visteon is trying to sell its US steering column operations to focus on its better-positioned steering gears and pumps business.
The Dearborn, Michigan-based supplier is discussing with its main customer Ford and the United Auto Workers union on how to exit that portion of its steering operation.
"To make it competitive in the future market, we would have to invest heavily" because of new US regulations, 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 Visteon shifting existing Ford steering column contracts to keep Visteon's UAW employees busy. Visteon officials estimate US steering column operations at $250 million (E233 million) to $300 million annually. It's one piece of a global steering unit with about $1 billion in annual revenues.
Visteon's US steering components are manufactured at an Indianapolis factory that employs about 2,300 hourly workers. Even without steering-column production, the plant would still make steering gears and pumps.
Exiting steering columns and other struggling businesses is a top priority in Visteon's turnaround efforts. The company lost $352 million in 2002. Visteon is also negotiating with Ford, the UAW and interior suppliers to exit the seating business.
"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."