DETROIT -- Ford Motor Co. has given concessions to Visteon Corp. that will save the beleaguered auto supplier as much as $300 million this year in wages.
The automaker also is giving Visteon at least $120 million in accelerated payments for parts by the end of this month, and will spend $150 million to pay for equipment in Visteon plants.
In return, Visteon has agreed not to seek price increases to offset the higher costs of raw materials, guarantees to keep sending parts to Ford and will comply with its deals with the automaker and the UAW.
Terms of the deal, which is retroactive to Jan. 1 and can be terminated by either party after Jan. 1, 2006, were disclosed Thursday night in a filing with the Securities and Exchange Commission.
Visteon and Ford are continuing to talk over ways for the auto supplier to restructure its business to become profitable. That includes a plan to sell off some of its plants. But Ford could possibly have to take back workers from plants that were sold under an agreement negotiated at the spin-off.
In a press release, Visteon President Mike Johnston said the supplier is "not in active discussions with anyone else."
Visteon, of Van Buren Township, Mich., was formed in June 2000 when Ford spun off its automotive parts businesses. But the supplier has never posted an annual profit. It is ranked No. 2 on the Automotive News list of top 150 original equipment suppliers to North America with original equipment sales of $11.08 billion in 2003.
Terms of the agreement include:
Visteon reported a net loss of $1.5 billion or $11.88 a share on revenue of $18.7 billion for 2004. That compares with a loss of $1.2 billion or $9.46 on revenue of $17.7 billion in 2003.
Visteon also is dealing with an accounting investigation. In January, the company said it made errors in the way it accounted for retiree health care and pension benefits. An adverse opinion from its independent auditors is expected, though the errors involved noncash matters.
-- contributed to this report.