Struggling automotive supplier Visteon Corp. has told its 8,300 white-collar workers that it plans to offer buyouts to a “significant” number of employees by year’s end, according to an Associated Press (AP) report.
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The company reportedly warned that it might lay off employees if too few of them accepted the buyouts, which will be based on seniority.
AP said the buyout packages will be available to employees who joined the company in 2003 or earlier – Visteon’s goal is to counter mounting losses by trimming its salaried work force, but the company didn’t rule out further job cuts.
Details of the “voluntary termination incentive” programme will be disclosed on Monday, according to an e-mail sent to employees by Chuck Hudson, Visteon’s director of human resources, and cited by the Associated Press.
“If not enough volunteers are generated, Visteon will assess other options required to achieve an affordable cost structure which may include involuntary separations,” Hudson reportedly wrote in the e-mail.
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By GlobalDataVisteon has not determined exactly how many employees it wants to shed, company spokeswoman Kimberly Welch reportedly told The Detroit News.
The Associated Press noted that Visteon, based in Wayne County’s Van Buren Township, was spun off from Ford in 2000 and, as the automaker’s largest supplier, Visteon’s struggles largely reflect those of Ford.
For the quarter that ended September 30, Visteon reported a net loss of $US1.36 billion, or $10.86 a share, on revenues of $4.15 billion, AP said, adding that production cuts by Ford, rising prices for steel and other raw materials, and high fixed costs have contributed to unexpected losses at Visteon, which hasn’t made an annual profit in North America in nearly four years.
“Visteon needs to do something because Ford is losing too much market share,” Ronald Tadross, senior auto analyst with Banc of America Securities in New York, reportedly told the Detroit Free Press. “It looks like this is one of several steps they’ll have to take. But it is only one stitch in a huge wound that is losing a lot of money.”
