Visteon to shed 800 workers

14 January 2009

Visteon Corp, the Michigan-based supplier of auto parts, has been hit hard as auto manufacturers continue to slash production targets.

With fourth-quarter product sales projected to drop by as much as 43 per cent from a year ago, Visteon is preparing to shed some flab – which includes the axe for some 800 employees worldwide. It will also suspend its 401(k) matching contributions and salary increases.

For January, Visteon will adopt a four-day workweek for about 2,000 of its employees, along with a commensurate 20 per cent reduction in salaries.

The company has said it is on track to complete its 800 global job cuts, which were first announced in October, by the end of the first quarter, with annual savings of $60 million expected upon completion.

However, this did not help its credit rating – Standard & Poor's has downgraded Visteon two notches, from B- to CCC – both 'junk' ratings - saying weak auto sales will continue to weigh the company down.

The company claims that it continues to win new business with a broad spectrum of customers across all regions, a reflection of the company's significant global footprint and breadth of innovative products. New business wins in 2008 were about $650million.