Visteon Corporation (NASDAQ: VC) today outlined various actions it
is taking in response to the global coronavirus pandemic.
Operational Business Actions
The company has taken decisive actions to manage costs and
preserve liquidity, including effective cost management and the
previously disclosed drawdown of its revolving credit facility.
As of March 31, Visteon had approximately $825 million of cash
and roughly $785 million of debt, which includes the $400 million
draw down of the revolving credit facility. Visteon has no
significant near-term debt maturities.
“Visteon has a solid balance sheet and the necessary liquidity
to withstand the storm while continuing to position the company for
future growth,” said Visteon President and CEO Sachin Lawande. “We
have seized the challenge as an opportunity to emerge stronger as a
company and continue to lead the evolution of automotive digital
cockpits and safety solutions with a strong technology
roadmap.”
Visteon has temporarily suspended or significantly reduced
production at certain facilities in the Americas, Europe and most
of Asia outside of China in response to governmental requirements
and production rollbacks taken by many of its customers. As its
operations resume in China, Visteon is implementing best practices
to protect the health and safety of its workforce, including
requiring cleaning and sanitation protocols, employee wellness
checks and social distancing.
In addition to the restructuring plan previously announced in
January, the company will further reduce the number of employees at
various sites. The new restructuring program is estimated to cost
between approximately $11-15 million and will be substantially
completed by the middle of 2021. The plans are expected to lower
the company’s cost base, improve its financial performance and cash
flow generation, and create a streamlined organization best
positioned to deliver on its key financial and operational
priorities.
Temporary Global Compensation Actions
Visteon today announced a temporary four-month global salary
reduction program; CEO salary will be reduced by 40%, the company’s
Executive Committee by 30%, and non-employee Directors’ cash
compensation by 30%. Subject to local laws and regulations, all
other employee salaries will be reduced by 20%.
Guidance Withdrawn
Given the uncertainty created by the growing impact of COVID-19
on the global automotive market, the company also announced that it
is withdrawing the financial guidance provided in February
2020.
Protective Face Shield Donations
The company is assisting the global battle against COVID-19 by
using production lines at its state-of-the-art Palmela
manufacturing facility in Portugal, usually dedicated to automotive
cockpit electronics, to produce protective face shields. Visteon
will donate the much-needed personal protective equipment to the
community medical facilities in which our employees and their
families live.
“Nothing is more important to Visteon than the health and safety
of our 11,000 employees who work and reside in 18 countries around
the world,” said Visteon President and CEO Sachin Lawande. “The
battle against COVID-19 will be won through innovation and I’m
proud that our global teams have pulled together to find ways to
help protect those in the medical community who tirelessly and
selflessly commit themselves to protecting us and our loved
ones.”
At scale, the company hopes to deliver up to 50,000 protective
face shields and other personal protective equipment (PPE) to
doctors and nurses in its communities. The company has also donated
face masks it received from its China operations to the University
of Michigan Hospital donation center.
About Visteon
Visteon is a global technology company that designs, engineers
and manufactures innovative cockpit electronics and connected car
solutions for the world’s major vehicle manufacturers. Visteon is
driving the smart, learning, digital cockpit of the future, to
improve safety and the user experience. Visteon is a global leader
in cockpit electronic products including digital instrument
clusters, information displays, infotainment, head-up displays,
telematics, SmartCore™ cockpit domain controllers, and the
DriveCore™ autonomous driving platform. Visteon also delivers
artificial intelligence-based technologies, connected car,
cybersecurity, interior sensing, and embedded multimedia and
smartphone connectivity software solutions. Headquartered in Van
Buren Township, Michigan, Visteon has approximately 11,000
employees at more than 40 facilities in 18 countries. Visteon had
sales of approximately $3 billion in 2019. Learn more at
www.visteon.com.
Forward-Looking Information
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are not guarantees of future
results and conditions but rather are subject to various factors,
risks and uncertainties that could cause our actual results to
differ materially from those expressed in these forward-looking
statements, including, but not limited to: (1) the duration and
severity of the novel coronavirus (COVID-19) pandemic; (2)
conditions within the automotive industry, including (i) the
automotive vehicle production volumes and schedules of our
customers, (ii) the financial condition of our customers and the
effects of any restructuring or reorganization plans that may be
undertaken by our customers or suppliers, including work stoppages,
and (iii) possible disruptions in the supply of commodities to us
or our customers due to financial distress, work stoppages, natural
disasters or civil unrest; (3) our ability to satisfy future
capital and liquidity requirements, including our ability to access
the credit and capital markets at the times and in the amounts
needed and on terms acceptable to us, our ability to comply with
financial and other covenants in our credit agreements, and the
continuation of acceptable supplier payment terms; (4) risks that
the Company may be unable to implement its restructuring plans as
anticipated on a timely basis or at all, that the expected amount
of expenses and cash expenditures associated with the restructuring
plans may exceed the Company’s projections, and that the Company
may be unable to realize the full amount of estimated savings from
the restructuring; (5) our ability to satisfy pension and other
post-employment benefit obligations; (6) our ability to access
funds generated by foreign subsidiaries and joint ventures on a
timely and cost-effective basis; (7) our ability to execute on our
transformational plans and cost-reduction initiatives in the
amounts and on the timing contemplated; (8) general economic
conditions, including changes in interest rates, currency exchange
rates and fuel prices; (9) increases in raw material and energy
costs and our ability to offset or recover these costs, increases
in our warranty, product liability and recall costs or the outcome
of legal or regulatory proceedings to which we are or may become a
party; (10) the impact of the coronavirus on our suppliers, our
manufacturing facilities and automotive sales in China; and (11)
those factors identified in our filings with the SEC (including our
Annual Report on Form 10-K for the fiscal year ended Dec. 31,
2019). Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our view only as of the
date of this release, and which we assume no obligation to
update.
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Media Contact:
Dave Barthmuss805-660-1914dave.barthmuss@visteon.com
Investor Contact:
Kris Doyle 201-247-3050 kdoyle@visteon.com
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