Visteon has withdrawn its financial guidance provided in February, 2020 and has unveiled operational cost reductions in response to the coronavirus crisis.
As of 31 March, Visteon had around US$825m of cash and roughly US$785m of debt, which includes the US$400m draw down of the revolving credit facility.
The supplier 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 China in response to governmental requirements and production roll-backs 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 programme is estimated to cost between around US$11m-US$15m and will be substantially completed by the middle of 2021.
Temporary Global Compensation Actions:
Visteon has also announced a temporary four-month global salary reduction programme; 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%.
Given the uncertainty created by the growing impact of Covid-19 on the global automotive market, the company also announced it is withdrawing the financial guidance provided in February, 2020.
Protective Face Shield Donations:
The company is using production lines at its Palmela manufacturing facility in Portugal, usually dedicated to automotive cockpit electronics, to produce protective face shields. Visteon will donate the personal protective equipment to the community medical facilities in which 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,” added Lawande.
“The battle against Covid-19 will be won through innovation and I’m proud 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 centre.