Auto supplier Visteon Corp. has entered Chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., joining the ranks of parts makers trying to reorganize their operations.
The company had been struggling to restructure its debts outside of bankruptcy, but late May 27 it filed with the court to gain time to address our capital structure and legacy costs that are not sustainable, given the current economic environment, Chairman and Chief Executive Officer Donald Stebbins said in a May 28 news release.
The filing does not affect any operations outside the U.S. Visteon is based in Van Buren Township, Mich., a Detroit suburb.
Visteon's plants in the United Kingdom filed for insolvency in a separate action in April, and court-appointed administrators immediately closed all three of the subsidiary's plants.
Visteon has extensive plastics operations, including injection molding, blow molding and thermoforming, and makes interior, exterior and functional plastics. The company was spun off from Ford Motor Co. in 2000, and consists mostly of former parts plants within Dearborn, Mich.-based Ford, which remains its largest customer.
The company has struggled from the start to find its own footing, successfully generating business outside Ford, but never turning a profit. Visteon listed a 2008 net loss of $681 million on sales of $9.5 billion.
It listed $5.3 billion in total debts and $4.57 billion in assets in its filing with the bankruptcy court. Its largest unsecured creditors consist mostly of banks and pension funds, although it owes an estimated $7 million to electronics molder Jabil Circuit Inc. of St. Petersburg, Fla., and $1 million in trade debt to injection molder Leon Plastics Inc. of Grand Rapids, Mich.
The company expects to receive debtor-in-possession financing from Ford to continue its operations while in bankruptcy.
Stebbins said he expects the company to emerge from bankruptcy with its key product lines intact.