Visteon Corp.'s U.S. manufacturing operations are losing parts supply contracts with the Detroit 3 and Nissan North America Inc.
The automakers are discontinuing component parts purchases from Visteon's U.S. plants through a combination of re-sourcing supply agreements to other suppliers or through the sale of some of Visteon's U.S. plants, according to a bankruptcy court filing made Wednesday by Ford Motor Co. in the U.S. Bankruptcy Court in Delaware.
The moves were confirmed by General Motors Co. and Ford. A Nissan spokesman declined to comment. Chrysler Group L.L.C. spokesman Max Gates said the company's agreements with Visteon have yet to be finalized and declined to comment further.
Visteon spokesman Jim Fisher says the curtailed contracts are part of the company's overall effort to exit non-competitive and non-core business lines, primarily its North American interiors unit.
"We're continuing to work with our customers in the core areas of electronics, interiors (outside North America) and lighting and we're retaining business with our customers in those areas, we intend to have an engineering and manufacturing presence in the US to support those core products," Fisher said.
Visteon's core product line also includes climate control products.
The moves are expected to take place over a period of months, Ford's filing said.
The total amount of business to be lost is unclear. Fisher and representatives from GM and Chrysler declined to provide details on how much business is involved, but both companies characterized the contracts as "minimal" compared to their overall level of spending with Visteon.
Still, about 34 percent of the company's $9.5 billion in 2008 revenue came from the United States alone. About 20 percent of the company's $1.5 billion revenue during the 2009 second quarter came from the U.S., Mexico and Canada combined, including 11 plants in the U.S., seven in Mexico and one in Canada.
"When we do emerge (from bankruptcy), we believe that our North American business will be about 15 percent of our global revenue," Fisher said.
Ford spokesman Todd Nissen said the automaker has used only a "minimal" supply of parts made by Visteon in the U.S. since the Automotive Components Holdings Inc. transaction in 2005, when Ford took back more than 20 former Visteon plants and prepared them for sale.
"In supporting their restructuring, we're moving ahead with the re-sourcing that small amount of business in the U.S.," Nissen said.
GM spokesman Dan Flores echoed Nissen's comments regarding the amount of the automaker's Visteon-business sourced from U.S. plants, but said GM would still buy parts from some Visteon plants in Canada and Mexico.
"GM has worked closely with Visteon to help them in their restructuring efforts, this involves assisting Visteon in the closure of their non-performing U.S.-based businesses," Flores said. "GM will retain portions of business in Canada, Mexico and other regions that fit into Visteon's restructuring plans."
While few details have been disclosed about Visteon's makeup if it successfully emerges from Chapter 11, it is becoming apparent that the company will have a much-smaller presence in the U.S.
But Fisher says the company will still have a revenue-generating presence in the U.S., only smaller than it is today.
Visteon ranks No. 18 on the Automotive News list of the top 100 global suppliers, with parts sales to automakers of $9.1 billion in 2008.