DETROIT -- Visteon Corp. is transforming itself into a Third World manufacturer.
Ford Motor Co.'s former parts operation has emerged from its recent bailout as a leaner company that is betting its future on low-wage Mexican and Asian operations.
The migration of Visteon's manufacturing out of the United States is so dramatic that internal documents estimate the company's average North American wage and benefit package could eventually approach $8 an hour.
Visteon's transformation comes amid a growing financial restructuring of the auto supplier segment. North America's largest Tier 1 supplier, Delphi Corp., sought Chapter 11 bankruptcy protection on Oct. 8. The Troy, Mich., company appears prepared to cut its North American employee wage and benefit structures drastically.
Delphi CEO Steve Miller is likely to close or sell some of the supplier's 27 U.S. factories and depend on its 50 factories in Mexico -- far from the UAW.
Visteon's ambitious wage and benefit goals can be achieved only if its factories are mostly in low-wage regions such as Mexico. Visteon workers in that country receive a wage and benefit package of about $3.25 an hour.
The supplier's average North American wage had been $38 an hour until this month. But following last month's bailout by Ford, Visteon is shipping 17,400 UAW workers and 23 factories and facilities back to the automaker. As a result, Visteon's average compensation package dropped to $17 an hour. The move also leaves Visteon with a small fraction -- about 800 workers -- of its original UAW work force.
The bailout helped triple Visteon's share price. It hit a 52-week high of $10.91 last month, up from a low of $3.14 in May.