Did George Strickler take a look inside Visteon - with its troubled finances - and say "thanks, but no thanks?"

While analysts puzzle over why the highly regarded former BorgWarner finance chief backed out of his new job as Visteon's CFO, some industry watchers believe it had nothing to do with his new employer's uncertain prospects.

Instead, they say it was Strickler's realisation that he was not slated to go to the top of the company.

One theory making the rounds is that Strickler - who in a short time built a huge reputation at high-flying BorgWarner - reconsidered when it became apparent that he was not in line to succeed Visteon CEO Peter Pestillo.

That job will likely go to Visteon president and chief operating officer Michael Johnston.

Pestillo, who turns 66 in March, is thought to be close to retirement, although Visteon has not announced plans for his succession.

Analysts greeted Strickler's move to Visteon in November with elation.

Key man at BorgWarner

Strickler joined BorgWarner as CFO in 2001 and was a central figure in the turnaround. His strategies played a decisive role in lowering debt and increasing earnings.

When Visteon announced that Strickler was jumping ship, analyst Chris Ceraso of Credit Suisse First Boston called him "the catalyst we've been waiting for."

Strickler is so highly regarded that Ceraso downgraded Chicago-based BorgWarner and upgraded Visteon.

But an executive who thinks he is in line to be the catalyst, may also think he is in line to be CEO.

That would have put him on a collision course with Johnston.

Strickler and Johnston are both 55, a make-or-break age if an executive expects to become chief executive.

Still, other analysts say it is unlikely that Strickler could have thought he had a chance to fast track to the top of Visteon. Pestillo has said in the past that he expects to be replaced by Johnston, who already leads the day-to-day operations of the company.

Another theory is that the ambitious Strickler pulled his sudden switch because a CEO opportunity opened up elsewhere.

Strickler said he decided not to go ahead with the Visteon job for personal reasons that had nothing to do with the company. He will not be returning to Borg Warner.

Labour hero

Meanwhile, Pestillo is thought to be hanging on because of the special needs for his worker relations skills at this time. Pestillo is the stuff of labour relations legend.

As Ford's personnel chieftain during the 1980s Pestillo forged a partnership with the United Auto Workers that was regarded as the best union-company relationship anywhere in American industry.

Pestillo moved from Ford to Visteon in January 2000 to help soothe relations with the UAW when the Ford's parts division was spun off along with its union employees.

Carrying those workers and the pension requirements for retirees is among Visteon's biggest burdens.

The UAW workers Visteon inherited from Ford were allowed to remain Ford employees for life, preserving their pay and benefits. That concession enabled the June 2000 spinoff to occur, but left the supplier with far higher labour costs than its rivals.

Visteon now wants to hire new hourly workers at lower pay and send more $25-an-hour union members back to the automaker.

Following recent talks with Ford, Visteon may now be able to speed their return.

Turnaround plan expected

Indeed, things may be looking up for Visteon. As enthusiastic as analysts were when Strickler came aboard, they did not downgrade the company when he left before ever starting work.

Analysts now expect Visteon to announce a turnaround plan in January.

The company disappointed Wall Street when it announced losses of $US168 million in the third quarter, more than three times what it lost in the same period a year ago. Visteon has been hard hit by the tough times at its former owner. Ford production in the US is down 17% this year.

Meanwhile, Visteon will be overtaken by Denso in the global sales race in 2003 - tumbling to fourth place among the world's suppliers. That comes just a couple of years after it was chased out of second place by Bosch.

Denso had sales of ¥2,332.76 billion in the year ended March 2003, equivalent to $19.44 billion. Of that, $18.99 billion were automotive sales. Visteon's sales were $18.4 billion in 2002.

Visteon's sales were down 4.7% in the first three quarters of 2003.

In the fiscal year to end in March 2004, Denso expects sales of YEN 2,440 billion, equivalent to $22.65 billion at last week's exchange rate.

With sales tailing off, Pestillo's famous touch with the unions is still much in demand.

Visteon is negotiating with the union to set up a lower wage for new hires. It is also renegotiating terms of its 2000 spinoff.

Reducing obligations to former Ford hourly workers will be a major step in Visteon's recovery. But it still has to accelerate its shift away from dependency on Ford, which provides 80% of revenue.
The third quarter was the lowest production level Ford has had in North America in recent years, though Visteon's heavy content on the new Ford F1-150 truck could help in the fourth quarter.

Strickler's reversal remains a disappointment, even if obscured by the other good news of late at Visteon.

The management hiccoughs at Visteon after the spin off and before Pestillo arrived caused the company to get off to a much slower start than at Delphi, where JT Battenberg was firmly in command from the beginning.

Sales specialists Charlie Szulak and Craig Muhlhauser both washed out as CEOs.

With a change at the top coming in the not to distant future, Visteon will need the strongest possible management team.