DETROIT -- Visteon Corp. is exploring the sale of its axle business and part of its electronics business, sources close to the talks say.
Since December, Visteon CEO Michael Johnston has met privately with several potential buyers, sources say.
It's unclear how much money the operations would fetch, but Visteon needs cash. It has lost more than $3.2 billion since Ford Motor Co. spun it off five years ago. To get that money, sources say Visteon is willing to consider the sale of operations that it had previously labeled "core" businesses.
Visteon denies that Johnston has met with potential buyers.
Company spokesman Jim Fisher declined to confirm which businesses Visteon is willing to sell. "There is a lot of wild speculation about a lot of things," he said.
The company's core businesses include interiors, climate control and electronics, Fisher says. "They are strong growth areas for the company, and most of Visteon's new non-Ford business is in those areas," he says. "We would not call them core products if we felt they were for sale."
But light-vehicle axles are not on Visteon's list of core products. The axle business is one of Visteon's major headaches. In 2000, senior Visteon executives proposed a $1.2 billion capital infusion to upgrade the axle business, but nothing came of it, says a former insider.
Potential bidders for the axle operation include Axle Alliance Co., a unit of DaimlerChrysler that makes heavy-truck axles, and Magna International Inc.
Although Visteon considers interiors to be a core business, two companies - Siemens VDO Automotive and Faurecia - are interested in its interior electronics products, sources say.
Visteon's global sales totaled $18.7 billion in 2004. But the supplier does not generate enough cash to cover expenditures on interest expenses and capital spending, says Shelly Lombard, a bond analyst with the firm Gimme Credit Publications Inc. of New York. Visteon also is carrying $2 billion of debt.
Last month, credit-rating service Moody's Investors Services downgraded part of Visteon's debt two levels below investment grade.
That will make borrowing more expensive, but the company does not face an immediate cash crisis. Visteon has $752 million in cash plus an untapped $1.3 billion line of credit, so its cushion could last awhile.