The good news for automakers in Johnson Controls Inc.'s unsolicited offer last week for most of Visteon Corp. is that Visteon finally is healthy enough to be an acquisition target.
"You're seeing this drama because Visteon is doing better," said Aaron Bragman, an analyst in the suburban Detroit office of IHS Global Insight.
Visteon posted its first annual profit in its history in 2009, largely through a restructuring undertaken during Chapter 11 bankruptcy protection.
Visteon executives spurned the offer, calling it a distraction. It came as Visteon seems near the end of its effort to emerge from a year of bankruptcy reorganization.
On Friday, May 21, Johnson Controls, a leader in automotive seating and interiors, offered $1.25 billion for Visteon's interiors and electronics businesses. Johnson Controls said Visteon's strong presence in China's automotive interiors and electronics market was a key driver of the bid.
A hearing on the progress of Visteon's reorganization is scheduled for today, May 24, in U.S. Bankruptcy Court in Wilmington, Del. Last week's offer could prolong the reorganization process.
Visteon, which was spun off by Ford Motor Co. in 2000, makes automotive electronics, lighting systems, interior parts and climate control products. Ford has spent hundreds of millions of dollars over the years to help Visteon restructure. Ford took back 23 money-losing U.S. Visteon factories and operations in 2005.
Ford spokesman John Stoll declined to comment on Johnson Controls' offer. He said Ford views both Johnson Controls and Visteon as solid, long-term supplier partners.
Visteon swung to the black last year. It posted net income of $184 million in 2009, driven mostly by cost cutting, including a $195 million fourth-quarter gain from terminating retiree health-care benefits.
During its bankruptcy, Visteon also sold nearly all its U.S. manufacturing operations and some in Mexico because the businesses lost money.