Volume 35, Number 6, June 2000
latest news developments
Visteon and Pilkington Join Forces to Form New Glass Company
Visteon Corporation, a leading automotive systems supplier and Pilkington plc, a leading glass manufacturer, have signed a letter of intent to form a new glass company, with Pilkington acquiring all of Visteons glass operation (vehicle, commercial and aftermarket segments) business and assets for a cash settlement. According to Visteon, the partnership is poised for significant growth thanks to the combination of Visteons strong customer base and Pilkingtons global reach and advanced technologies. The two companies currently are negotiating terms of the venture, which would give Pilkington majority ownership and management control over Visteons glass business. At press time, no definitive plans had been decided.
We had been talking with Pilkington for some time about this venture and we believe it will be a good fit for both companies, said Cliff Dawson, acting general manager for Visteons glass division. This venture will bring together Pilkingtons large global reach and broad manufacturing base with Visteons North American manufacturing operations.
Paolo Scaroni, Pilkington chief executive added, The opportunity to secure this venture fits exactly our growth strategy, creating a business with considerable profit potential in one of the largest glass markets in the world.
The agreement states that the new company would serve as Ford Motor Companys major supplier of automotive glass, while Pilkington would provide technological services to both Ford and other Visteon customers. In addition, the new company would also assume Visteons equity position in Vitroflex, located in Mexico and Penstone, in Michigan.
According to Dawson, employees of Visteons glass division, including most management, will transfer with the new business. He explains, however, that there may be some areas of duplication where not all of the employees will transfer.
Dawson adds that after meeting with the employees regarding the venture, there is an understanding that there are potential benefits for the business in this proposal. For some time we have been looking for ways to strengthen the long term future of our glass business and most of the employees see the move as achieving this goal, he said.
An article printed June 8 in the Detroit Free Press stated that Visteon would most likely take a significant financial charge due to selling its $800 million glass making business to this venture. According to the article, Visteon will have to take the charge against earnings for selling the plants at below their book value and that difference between what they are valued at and what Visteon actually gets for them must be accounted for in financial records.
This endeavor does not affect Visteons intent to spin off from Ford Motor Company and become an independent entity as of June 28, 2000.
Also in recent news for Pilkington, one of the companys subsidiaries, Pilkington Libbey-Owens-Ford (LOF), dropped the LOF from its name, and is now known as Pilkington.
Bankruptcy Declared by Safelite
Safelite Glass Corporation of Columbus, Ohio, filed for reorganization on June 9 under Chapter 11 of the U.S. Federal Bankruptcy Code. The company estimated that it has more than 1,000 unsecured creditors.
For an in-depth report, visit the Hot News section of the USGlass website, www.usglassmag.com or the May/June issue of AGRR magazine. To subscribe to AGRR, download a form from our website or call 540/720-5584.
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