Visteon Corp. is negotiating to buy a lighting plant in Monterrey, Mexico, from Guide Corp., industry sources say.
The acquisition would give Visteon a second lighting factory in low-wage Mexico. Last year Visteon shed a unionized lighting plant in Sandusky, Ohio.
Visteon spokesman Jim Fisher confirmed the talks with Guide. "It will certainly increase our lighting business with GM," he said.
Neither Guide nor Visteon would disclose the capacity of the Guide plant in Monterrey, which produces headlamps and taillamps. The Guide plant would complement Visteon's existing Monterrey plant, which builds the same parts, plus instrument panels and consoles.
Visteon, of Van Buren Township, Mich., last year handed 23 unionized U.S. plants back to Ford Motor Co. as part of a Ford bailout of the supplier. Included was the Sandusky lighting plant.
Visteon officials have said automotive lighting is a core business. Visteon also operates a lighting plant in the Czech Republic.
Last year Visteon posted a loss of $270.0 million on sales of $16.98 billion. The now downsized Visteon expects sales of $11.5 billion in 2006.
Guide plants have been on the auction block for years, industry sources say. The company was spun off from General Motors in 1998. Turnaround consultant B.N. Bahadur, who often assists GM with distressed parts makers, acquired the company in 2001 and still owns it. He could not be reached for comment on the Visteon talks.
Guide, which also operates plants in Anderson, Ind., and Monroe, La., does not disclose operating results.
Guide was a strong lighting competitor until the 1990s. The industry then began shifting from headlamps that beam light through front lenses to those that bounce light off a rear parabolic reflector.
The new technology requires massive capital investment. According to one executive, one machine alone - which conducts a 22-step process to cleanse the reflector of contaminants before it is coated with metal - costs $12 million.
You may e-mail Robert Sherefkin at [email protected]