Leuliette named Visteon CEO, puts focus on China

Dustin Walsh

Published: October 2, 2012 6:00 am ET

Related to this story

Topics Automotive, Mergers & Acquisitions

DETROIT (Oct. 2, 8:25 a.m. ET) — Visteon Corp., confirming weeks of speculation, on Oct. 1 named Timothy Leuliette its permanent CEO and president.

Leuliette, 62, will also be replaced as chairman of the supplier by current board member Francis Scricco, 63.

In an interview with Crain’s Detroit Business, Leuliette said he is focused on Asia.

The move to make Leuliette the permanent CEO follows the resignation of Chairman and CEO Don Stebbins, who stepped down Aug. 10 after months of boardroom turmoil. The board appointed Leuliette interim chairman and CEO.

Relations between Stebbins and the board deteriorated over a plan to break up and sell large stakes of the auto supplier, a move Stebbins opposed.

On Sept. 19, Leuliette confirmed a plan to sell Visteon’s standalone climate control business to its Halla Climate Control Corp. joint venture, which it owns 70 percent, for cash and that it will sell its stake in the Chinese joint venture Yanfeng Visteon Automotive Trim Systems Co. Ltd.

The move would improve how the business interacts with global customers and increase corporate liquidity, Visteon said in previous presentation. Halla will become the No. 2 player in the global automotive climate business with a 13 percent market share, Leuliette said during today’s interview.

Korean company

Once consolidated, the joint venture will be named Halla-Visteon Climate Group and will be led by a Korean management team with the stock traded on the Korea Exchange.

“Visteon is a $7 billion business with very little debt and a lot of cash, but we have strengths and weaknesses,” he said. “In climate, we’re very strong, but we need to consolidate that business and face the fact that it’s an Asian-centric business.”

He said the company is on target to complete the consolidation of the climate business into Halla in the first quarter of 2013.

Meanwhile, Korean supplier Mando Corp. continues to show interest in acquiring Visteon’s stake in Halla. Last month, Mando announced a Chinese holding company listed on the Hong Kong Stock Exchange to buy the stake.

Leuliette said the board will consider any offers to acquire the stake, but the company is being set up to run profitably regardless of a deal.

Interiors business

Leuliette said its 50 percent stake in its interiors joint venture Yanfeng will continue to gain value as the company consolidates, but that a deal may take time do to its size and that it’s in China.

"We’ve identified that we’d like to monetize that, but I don’t expect (the deal) to be a quick one,” he said. “In the meantime, the longer we own it, the more it’s worth; and we want to manifest that value to our shareholders.”

Following the closing of the Halla consolidation and if its stake in Yanfeng is sold, Visteon will have little presence left in the United States. Leuliette said the suburban Detroit headquarters will remain, at least as a technical center, but would not speculate whether it would remain their global headquarters.

“We don’t have a huge presence in Southeast Michigan today; it’s just basically our headquarters, and we have some U.S. debt and some unfunded pension,” he said.

“We’re asking the question: ‘Where’s the best place for us to be?’ We still have a lot of customers here in North America. But it doesn’t make sense for a company like Visteon to be global and have your debt in the U.S.”

Asian HQ?

Leuliette said Visteon would see advantages in being headquartered in Asia — specifically, access to Asian credit markets and benefits from currency fluctuations.

However, he said he doesn’t expect the U.S. headcount to change under any change in headquarters location. Visteon currently employs 900 in the U.S.

Leuliette said Visteon’s future isn’t written yet, saying the company has “four to five paths” to shareholder return.

“If there’s any company that has optionality, it’s us,” he said. “We’ve had options for return in the past, but they have not gelled for a value story for the shareholder, but that’s what we’re going to do now.”

The moves provide insight to shareholders and media speculating over Visteon’s future after more than a year of contention in the board room.

During Stebbins tenure, Visteon ended a 16-month Chapter 11 bankruptcy, where Stebbins and bondholders drafted a plan to scrub $2.1 billion in debt and provide the roughly 40 bondholders with an 88 percent ownership stake for $1.25 billion.

Boardroom drama

But in May 2011, Stebbins, chairman at the time, and the rest of the board reached an impasse with the threat of a proxy battle looming. But the proxy fight was sidestepped when the board agreed to allow Cayman Islands-based activist investor Alden Global Capital to place two members on the board.

To return value to the bondholders, Visteon offered $805 million to acquire the remaining 30 percent stake in Halla on July 4, but the deal was rejected after Korea’s National Pension Service, which holds an 8.1 percent stake in Halla, rejected Visteon’s offer.

A deal to sell its global interiors business to Yanfeng also fell apart.

Stebbins and Visteon parted ways on Aug. 10.

Leuliette declined to comment specifically on Stebbins’ relationship with the board, but said: “Don was here during a very challenging time, led the company through a bankruptcy and out. But there comes a time when there’s a difference in the philosophy. Over time the philosophy of the board; we morphed into a different mode.”


Comments

Leuliette named Visteon CEO, puts focus on China

Dustin Walsh

Published: October 2, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

RPC Group buying Iceland's Promens

November 27, 2014 8:46 am ET

In a major acquisition that combines two rigid packaging companies with international footprints, RPC Group plc has signed a 399 million euro ($497...    More

Image

Huhtamäki selling film division

November 26, 2014 2:10 pm ET

Private equity firm Deutsche Beteiligungs AG (DBAG) will acquire the film business of Finland-based plastics packaging group Huhtamäki Oyj for 141...    More

Image

Visteon in talks to sell its stake in Halla Visteon Climate Control JV

November 26, 2014 9:07 am ET

Visteon Corp. confirmed this morning that it is in discussions with a private equity firm to sell its stake in South Korean joint venture Halla...    More

Image

Deal adds U.K. plant to DelStar

November 25, 2014 12:47 pm ET

Schweitzer-Mauduit International Inc. (SWM) is acquiring certain assets from the advanced wound management division of London-based Smith & Nephew...    More

Image

Onex buying packaging group SIG Combibloc

November 24, 2014 9:05 am ET

ex Corp. will buy SIG Combibloc Group, the Switzerland-based manufacturer of aseptic carton packaging and plastics closures from New Zealand's Rank Gr...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events