Visteon Reduces Payment To Contract Labor Firms By 7 Percent.(Brief Article)

Auto parts maker Visteon Corp., following the lead of former corporate parent Ford Motor Co., said it was cutting payments to its contract labor firms by 7 percent. The move was announced by Visteon a day after Ford, its leading customer, also trimmed 7 percent off the rate it pays to firms that supply it with about 6,000 mostly white-collar contract workers.

Gordon Cole, a spokesman for the world's second-largest automotive parts maker, said it currently uses about 1,100 contract employees. It was not clear how much Visteon or Ford would save from the cuts or how the contract labor firms affected by them would seek to compensate for declining revenues.

For the first nine months of 2001, Visteon lost $104 million, or 80 cents a share, compared with earnings of $357 million, or $2.75 per share, in the same period last year. It has delayed offering any earnings estimate for the fourth quarter, saying an uncertain industry outlook made results too difficult to forecast.

The Dearborn, Michigan-based company has cut about 2,600 jobs this year amid the auto industry slowdown. But under its spinoff agreement with Ford, many of Visteon's 23,000 hourly employees are United Auto Worker union members, who have guaranteed jobs for life and are Ford employees.

Print Get the Mag Weekly Updates