CHICAGO -- Shares of Visteon Corp. jumped 27 percent on Friday following news and union reports that the auto parts supplier and former parent Ford Motor Co. had reached a tentative restructuring deal.
However, Visteon spokeswoman Kim Welch said Ford and the auto parts supplier were still in talks on Friday and she would not comment on reports of a tentative agreement.
"We have not concluded those discussions, so there are no details for us to talk about," Welch said. "We are not making any public discussions about various scenarios or any comment about the speculation that is running rampant."
Visteon last September said it needed to restructure its ties to Ford and make other cuts to reverse steep losses. In March both agreed to a temporary package of relief on wages, parts payments and capital spending.
Van Buren Township, Michigan-based Visteon has struggled to become profitable since its spinoff from Ford in 2000, and relies on Ford for about 70 percent of its revenue.
The Detroit News, citing sources familiar with the matter, on Friday said Visteon had tentatively agreed to a deal that would allow it to shed 13 to 15 of its U.S. plants, spinning most of them off into a holding company controlled by Ford.
About 5,000 of the more than 17,000 workers at the plants would be offered buyouts or early retirement under the agreement, the newspaper said.
Local United Auto Workers officials have said they received notice of a meeting at the UAW headquarters in Detroit next Tuesday to discuss details of a pending agreement between Visteon and Ford, which would require UAW approval.
"We are going to meet next week, where we are going to be notified of what the pending agreement is," said Eugene Morey, president of United Auto Workers Local 849, which represents workers at Visteon's Ypsilanti, Mich., factory. Morey said he did not know the details of the agreement.
Representatives from Ford and the top level of the United Auto Workers could not be reached immediately for comment.
The 15 U.S. plants have about 18,600 workers represented by the UAW, including 17,700 who are Ford employees indefinitely assigned to the plants. Visteon reimburses Ford for the wages and benefits, though Ford has subsidized the operations.
Union sources said Ford has taken the lead in approaching smaller parts suppliers about selling those plants.
Visteon had 70,200 workers and more than 200 facilities at the end of 2004, including 61 plants in North America.
It posted net losses of $1.5 billion in 2004 and $1.2 billion in 2003 and Ford light vehicle production cuts, high materials prices and high labor costs continue to hurt it.
Visteon shares have jumped 84 percent in a week, buoyed by market speculation that its naming of former Lear executive Donald Stebbins as its next president and chief operating officer signaled it was close to an agreement with Ford.
The stock fell to an all-time low at $3.14 on May 11 after Visteon warned of possible accounting errors and said cash flow from operations would be insufficient to fund capital spending, debt and other obligations in 2005, and it would need to take on more debt, if it did not make structural changes.