United Auto Workers union leaders have approved a restructuring plan for Visteon that would allow the struggling supplier to spin off 15 unprofitable plants, union officials told the Associated Press (AP).
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Under the plan, AP said, former Visteon parent Ford would put 13 of the 15 plants in a holding company and try to sell them – the 13 include seven plants in Michigan, two in Tennessee and one plant each in Ohio, Indiana, Missouri and Oklahoma, employing almost 18,000 hourly workers in total.
The plan, agreed between Visteon and Ford, needs the approval of local branch UAW workers to go into effect and members at the 15 plants covered are expected to vote on it by June 5, the report said.
Ford plans to offer buy-outs to up to 5,000 workers at the affected plants, UAW Local [branch] 849 president Eugene Morey told the Associated Press, adding that buyers of the plants must honour the labour agreements that are in place.
AP noted that Ford and Visteon began talks last September aimed at allowing Visteon to shed some parts of its business to improve efficiency while still meeting its obligations to Ford, which accounts for around 70% of Visteon’s business.
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By GlobalDataMorey reportedly said the plan is better than the alternative of Visteon declaring bankruptcy, an action that would put union contracts in jeopardy.
AP noted that several auto suppliers have declared bankruptcy in recent months because of the same high steel costs and competitive pressures that Visteon faces.
