Chrysler Gives Visteon $31 Million Pick-Me-Up
DETROIT (AP) -- Chrysler Group LLC will pay auto supplier Visteon Corp. at least $31 million and shift business to other suppliers as part of a plan to help Visteon emerge from bankruptcy protection, a Visteon spokesman said Monday.
Under the deal, which must be approved by U.S. Bankruptcy Court in Delaware, Visteon would help Chrysler find new suppliers and sell Chrysler parts-making tools in exchange for the payments. The payments come in the form of surcharges for parts as well as purchase of equipment.
Visteon spokesman Jim Fisher said the agreement gives Visteon much-needed liquidity. The Van Buren Township-based supplier filed for bankruptcy protection in May.
Fisher said it also helps the company exit its vehicle interiors business with Chrysler. Visteon will still make more lucrative climate control, electronics and lighting parts for Chrysler, he said.
Chrysler makes up less than 5 percent of Visteon's global revenue, Fisher said.
General Motors Corp. reached a similar deal with Visteon last month. Fisher said the company is in talks with other customers as well. Visteon is the former parts division of Ford Motor Co.
Parts plants in Saltillo, Mexico and Highland Park, Mich., would be affected by the deal. Fisher said Chrysler can choose to sell the plants and equipment or, if a buyer isn't found by March 31, could assume ownership of the plants.
The plant in Mexico makes door trim and instrument panels, while the factory in Michigan makes cockpit modules, consoles, and door trim.
"We were pleased to reach this agreement, which addresses our mutual needs," Fisher said.