Visteon CEO Sees ‘Clarity’ on Revamp by End of 2013
Visteon Corp. (VC), the auto-parts supplier stalled as it revamps itself, will decide its strategy for each of its units by the end of 2013 and provide investors “clarity,” Chief Executive Officer Tim Leuliette said.
“There are so many great assets here and you can pick a nice path, but it’s the execution that’s always been fraught with challenges,” Leuliette, who was named permanent CEO Oct. 1, said in an interview yesterday. “There are times when you have to move it from the too-tough-to-handle file to the front of the desk and get on down the road. You know me: I don’t have all the patience in the world.”
Visteon said Sept. 19 it plans to sell its climate business to Halla Climate Control Corp. (018880) for cash, creating the Halla- Visteon Climate Group. The company will sell its interiors unit and seek to exit its 50 percent stake in Yanfeng Visteon Automotive Trim Systems Co. Visteon will also consider options for its electronics business.
“Clarity doesn’t mean that all of the execution will be accomplished but that the clarity will be there,” he said.
Leuliette ascended to CEO after serving as interim chief following the ouster of Don Stebbins Aug. 10. He was part of a bloc of Visteon directors who favored revamping the company, which hasn’t been able to generate consistent profits under three CEOs before Leuliette.
Visteon exited bankruptcy in 2010. Leuliette, as interim chief, said in a Sept. 19 investor presentation that Visteon will seek the “right value” at the “right time” for its stake in Yanfeng Visteon Automotive Trim Systems, the Chinese joint venture with SAIC Motor Corp. (600104)
Visteon has tried to shed lower-margin units to focus on faster-growing operations in Asia. The company, spun off from Ford Motor Co. (F) in 2000, has been pressured by investors to boost its share price, which reached a post-bankruptcy peak of $75.75 in January 2011.
The company’s climate business includes 70 percent ownership of Halla and Visteon’s own climate unit. Together they rank No. 2 behind Denso Corp. (6902), the Kariya, Japan-based parts maker that is 23 percent owned by Toyota Motor Corp. (7203)
By selling the climate business to Halla, a company traded on the Korean stock exchange, Visteon will “have taken half of this company and made it an Asian-traded equity,” Leuliette, 62, said yesterday. Visteon plans to complete the sale by the end of the first quarter.
“Connect the dots,” he said. “As we sell off Yanfeng, as we address our interiors piece, move climate to Asia, you start to see that the electronics piece” will determine Visteon’s future.
“At that point we become very Asian-centric, and from the shareholder perspective, they should benefit from that,” he said. Visteon’s auto-electronics unit is the world’s fifth- largest.
Stebbins was weighing options after a deal to sell Visteon’s interiors unit fell apart and his attempt to buy the remaining 30 percent of Halla was blocked by South Korea’s National Pension Service. Stebbins said in an August interview that while he was looking at acquisitions in climate and electronics to boost market share in both units, he didn’t expect any new transactions to close in 2012.
Visteon, based in Van Buren Township, Michigan, disclosed the departure of Stebbins in an Aug. 13 statement.
The board favored Leuliette as the permanent CEO because other potential candidates viewed him as likely to win the job, he agrees with shareholders who have pushed the company to sell off lower-margin businesses and it was hard to find CEO candidates to shrink the company, three people familiar with the hiring plan had said.
Visteon will report results from Yanfeng Visteon Automotive Trim Systems for the first time when it files its 2012 annual report next year. That pending disclosure has been a “catalyst” for SAIC and Visteon to talk, Leuliette said.
Yanfeng Visteon “is a tremendously powerful piece of” SAIC, he said. “Perhaps there’s a point where they may not want the pieces to be all public.”
The shares rose 0.7 percent to $45.80 at the close yesterday in New York. Visteon has gained 18 percent since Aug. 10, the last trading day before Leuliette’s appointment as interim CEO was announced.
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