Picture Darkens For Visteon
VAN BUREN TOWNSHIP — The American automotive industry is looking a little worse after a difficult weekend for troubled automotive supplier Visteon Corp.
Visteon is slated to release its first-quarter earnings tomorrow; it reported a net loss of nearly $1.5 billion last year.
With the firm’s stock already in freefall last week, shares fell as low as $4.76 before ending the day at $4.89, Standard & Poor’s and Moody’s Investors Service both cut Visteon’s debt ratings deeper into junk-bond territory.
Moody’s cut its rating two steps to B1 from Ba2.
On the heels of that, the $18 billion former division of Ford Motor Co. fired its head of North American operations, James C. Orchard.
“Jim is leaving the company,” Visteon spokeswoman Robin M. Pannecouk told Reuters on Friday. “It’s effective May 1.”
Pannecouk would not say why Orchard was terminated.
She did say that he would receive a cash payment of $635,000, as well as other benefits, as part of his severance agreement with the company.
Pannecouk said the company has not yet identified a replacement for Orchard, who was hired by Visteon in 2001 from ZF Friedrichshafen AG, a German transmission manufacturer.
While Visteon has been comparatively successful in overseas markets, the company has been struggling with its North American operations.
The high labor costs it inherited from Ford Motor Co., which spun off Visteon in 2000, combined with rising raw materials prices, increased foreign competition and major production cuts in the domestic auto industry have contributed to the company’s financial distress.
The company has been locked in negotiations with Ford — which remains its largest customer — for months, trying to hammer out a deal to restructure its North American manufacturing operations.