Visteon files for bankruptcy protection in the US
Thursday 28 May 2009
Visteon Corp today filed for Chapter 11 bankruptcy protection for its operations in the US, less than two months after putting its UK operation into administration.
The car component maker, which was spun off from Ford in 2000, said it had made the move in order to reorganise its business to cope with tough market conditions for car manufacturers.
At the end of March around 200 employees at the firm’s West Belfast plant were made redundant.
Staff were given less than one hour’s notice when Visteon axed around 600 jobs at its three UK plants in Belfast, Basildon and Enfield.
Workers staged a seven week sit-in at the Finaghy Road North site in protest at being offered only statutory redundancy pay.
The sit-in ended last week after workers and their union representatives accepted an improved offer from Visteon, but the former employees are expected to start legal proceedings next month to secure pension payments.
It emerged during the protest that the UK arm of its business had not been profitable for a number of years and Visteon had investigated options to move the factory to lower cost locations as early as 2001.
Visteon’s Michigan-based parent said it had filed for relief under Chapter 11 of the US bankruptcy code to “maximise the long-term value of the company”.
Donald Stebbins, chairman and chief executive said: "During the reorganisation period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment.
“The results of these actions, combined with our innovative products and excellent product quality, will allow Visteon to emerge a financially sound and well-positioned company."
Visteon said it expected to fund its operations with its US cash balance, cash flows from operations and a debtor-in-possession facility.
It said Ford had given a commitment letter to support debtor-in-possession financing for Visteon's restructuring efforts and to ensure long-term continuity of supply. Other global customers have also expressed their support.
In its court filings Visteon requested authority to continue serving customers, paying critical suppliers and honouring employee obligations.
This article is from The Belfast Telegraph
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