As a result, some 18,000 production workers in the United States and another 2,000 in Mexico who have been transferred from the parts supplier, Visteon, to ACH face losing their jobs and/or seeing substantial wage cuts. With the transfers, the number of Visteon’s hourly employees covered by the United Auto Workers (UAW) contract will drop from 17,400 to 5,000 and the average wage will plummet from $38 an hour to $17, according to the Associated Press.

Under the deal, 5,000 UAW members will be offered buyouts. Two ACH plants in Chesterfield and Ypsilanti, Michigan, are slated to be closed. The two plants have 200 and 950 workers respectively.

The move is part of a $550 million bailout to buttress Ford’s chief parts supplier, reported the Associated Press. In 2000 Ford spun off Visteon Corporation, its former parts division. Ford remained Visteon’s primary customer, accounting for almost two-thirds of its business.

Other cities in Michigan where plants may be involved in the deal are: Utica, Sterling Heights, Plymouth, Ypsilanti, Saline, Milan, and Monroe. There are also plants involved in Sandusky, Ohio; Indianapolis, Indiana; Nashville, Tennessee; and Tulsa, Oklahoma.

Ford and Visteon have been negotiating the deal with top officials of the UAW for more than a year. With Visteon threatening bankruptcy, union leaders signed a two-tier wage agreement in May 2004 that cut wages for new hires at the parts supplier by as much as $10 an hour. The contract also required new hires to pay higher health-care costs.

Visteon has become a global auto parts supplier with 170 facilities in 24 countries, but has not shown an annual profit since its formation. Visteon blames its poor financial showing on production cuts at Ford, lower prices for parts, and labor costs it inherited after being spun off from Ford.

Following the announcement of the deal, the Standard and Poor’s credit rating agency raised Visteon’s rating from B- to B+, reported the Detroit News.
 
 
Related articles:
GM auto parts supplier files for bankruptcy; to slash wages, jobs  
 
 
Front page (for this issue) | Home | Text-version home