Visteon told automotive analysts in Detoit yesterday that it is reducing its profit outlook for 2006 and that 2007 will be a challenging year for the company.
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The one-time Ford-owned supplier said that 2006 earnings before interest, taxes and restructuring costs would be $US20m, down from its previous estimate of between $40m to $50m, according to Dow Jones. It also expects a 2007 loss before interest, taxes and restructuring costs of $50m, but this could vary by $50m either way.
Visteon said it had won $1bn in completely new business in 2006, and that 80% of this will be manufactured in low-cost countries. Sales are expected to be $10.9bn in 2006, in line with previous estimates, and US$11.1bn for 2007.
Dow Jones added that Visteon said it would widen its three-year restructuring plan and now targets a total of 30 locations for scrutiny, up from 23. “There does remain a handful of plants where we lose money,” said chief financial officer Jim Palmer.
Visteon’s restructuring plans were set back when discussions with GKN ended at the end of last year. Visteon had been hoping to sell some of its driveline assets in Europe and South America.
At the time it said: “Visteon continues to explore other alternatives for these assets as it restructures its businesses as part of the company’s three-year improvement plan.”
