Visteon Files for Bankruptcy; Will Ford Belly-Up to the Bailout Buffet?
Parts maker Visteon’s US operations have filed for bankruptcy. No surprise there. In the nine years since FoMoCo spun off its vehicle climate systems, interior parts, lighting and electronic systems maker, Visteon has never posted an annual profit. After losing $663 million last year, Visteon warned a few weeks ago that they may have to file if the creditors would not agree to concessions. Nobody conceded. Visteon filed along with some of its US subsidiaries in the US bankruptcy court in Delaware. None of its overseas subsidiaries or joint ventures outside the US are part of the filing. Not that they need any help with it: In March Visteon’s main UK subsidiary filed for reorganization.
In its C11 filing, Visteon listed assets of $4.58 billion against debts of $5.3 billion. This as April sales to Ford, Visteon’s biggest customer, fell 40 percent. Automotive News [sub] reports that the company’s creators will be there for their progeny. “Visteon said Ford has committed to ensure long-term continuity of supply and to support debtor-in-possession (DIP) financing for the restructuring efforts. Ford is still Visteon’s biggest customer and accounted for about 31 percent of its $1.35 billion of sales last quarter.” The question is, can Ford afford another mouth to feed? And with all those bailout billions flowing towards all the other local suppliers, can Ford resist dipping-in for Visteon? If Visteon suckles, does that taint Ford’s non-bailout (Ford family control related) political purity?
More by Robert Farago
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I've always found it somewhat humorous and ironic that the "bailout cheerleaders" spent a lot of time and breath worrying over the various nearly-proprietary parts dealer's longterm health without the Detroit 2.7, yet the actual truth of the matter is that many of these, such as Delphi and Visteon, never really were viable outside of their own little family. Most started life as wholly owned subsidiaries, and subsidiaries (as in subsidized) they remained, except on paper, as their parent organizations, desperate to unload 'liabilities', shed them. The proof of such can be found right in the pudding.
Maybe Ford can do a deal with the gov't similar to Chrysler-Fiat. Get the gov't to put up all the cash while Ford takes "management responsibility" for Visteon in return for equity. Weirder things have happened!
[...] parts supplier files for Chapter 11; Long live Visteon. Visteon Files for Bankruptcy; Will Ford Belly-Up to the Bailout Buffet? | The Truth About Cars ...In the nine years since FoMoCo spun off its vehicle climate systems, interior parts, lighting [...]