The newly restructured Visteon Corp. has not only changed its mix of businesses and customer base, but it has radically altered the makeup of its North American labor force.
Low-paid Mexican workers will far outnumber United Auto Workers union members at Visteon after its big and unprofitable plants are handed over to a Ford-controlled holding company later this year.
Visteon's North American hourly workers will, on average, earn less than half as much as they do now.
In the new downsized company, the supplier will employ about 8,638 hourly employees at 13 Mexican electronics plants. That compares with roughly 6,746 workers at the 23 factories it will retain in the United States and Canada.
"They become largely a foreign supplier," said Sean McAlinden, analyst for the Center for Automotive Research in Ann Arbor, Mich.
The average Visteon hourly worker in North America earned $38 an hour before the Ford agreement, according to Visteon. But the average hourly wage will drop to $17 after higher-paid North American workers go back to Ford.
Rival Delphi Corp. already is heavily tilted toward Mexico, with 60,000 hourly employees at 50 Mexican plants. Delphi employs 34,100 hourly workers at its 49 facilities in the United States and Canada.
Under the May 25 agreement, the Ford-controlled holding company will take back 22 Visteon plants and other operations with 17,400 employees. All of them are Ford employees now leased to Visteon under Ford's master agreement with the UAW.
Visteon will be left with 12 plants organized by the UAW in North America. Those plants have a combined 2,220 workers.
|The changing face of Visteon|
|The composition of Visteons hourly work force in North America will change dramatically under a plan that transfers 22 plants into a holding company controlled by Ford Motor Co. Most Visteon workers will be south of the U.S. border.|
|Plants||Hourly workers||% OF TOTAL HOURLY WORKERs|
|Source: Visteon Corp. documents|
But none of those union workers were employed under the Ford master agreement that guaranteed workers about $60 an hour.
Less UAW clout
Visteon declined to say what its Mexican workers are paid. Industry estimates are that Mexican factory workers now make between $4 and $5.50 an hour, including benefits.
Although the agreement greatly reduces its presence and clout within Visteon, UAW members voted to ratify it.
UAW spokesman Paul Krell declined to say whether the union would attempt to organize other Visteon factories.
Workers at two factories with about 2,450 hourly employees will be represented by the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America. The plants are in Bedford, Ind., which makes interior and powertrain components, and Connersville, Ind., which makes climate control and interior parts.
Several Visteon plants in the United States will be nonunion, including Lextron Visteon Automotive Systems LLC, a joint-venture operation with Lextron Corp. in Canton, Miss., and a Visteon plant operated by G&C Industries in Durant, Miss.
Visteon spokesman Kimberly Welch declined to specify which plants are unionized and which aren't. But she said Visteon is happy with the mix of union and nonunion workers.
Following the agreement with Ford, Visteon's North American revenue will drop from 63 percent of the total to 39 percent. Combined European and South American operations of the new Visteon would be 43 percent, based on 2005 revenues so far.
In the reorganization, Visteon's projected revenues would drop from $18.4 billion in 2004 to a projected $11.4 billion, based on 2005 estimates.
You may e-mail Bradford Wernle at [email protected]