NEW YORK (AP) -- Visteon Corp., the top parts supplier and former subsidiary of Ford Motor Co., has filed for Chapter 11 bankruptcy protection, dealing yet another blow to the reeling automaker supply base.
The Van Buren Township, Mich.-based company filed in U.S. Bankruptcy Court for the District of Delaware after struggling with plunging revenue and production cuts from its automaker customers. The company's Visteon UK Ltd. unit separately filed for bankruptcy protection last month and closed three British plants.
Chapter 11 of the Bankruptcy Code allows companies to stay in business and reorganize without the threat of creditor lawsuits. It does not mean liquidation.
Visteon is the latest auto parts maker to file for bankruptcy protection as the industry copes with production cuts in the face of plunging automobile sales. It also comes a month after automaker Chrysler LLC filed for Chapter 11 protection. General Motors Corp. is likely to follow it after offering its bondholders new terms for debt-for-equity exchange if they agree not to protest a quick sale of the company.
"During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment," Donald J. Stebbins, Visteon's chairman and chief executive, said in a statement.
Visteon said it expects to fund its operations with cash on hand, cash flows from operations and a debtor-in-possession facility. Ford, from which Visteon was spun off in 2000, has said it will support the parts maker's debtor-in-possession financing to ensure the continued supply of parts.
Ford is the company's biggest customer, accounting for 31 percent of Visteon's first-quarter sales.
Tony Brown, Ford's head of global purchasing, said the automaker has not experienced any disruption in production due to the Chapter 11 filing and does not expect any, though he said the automaker continues to monitor the situation.
"Because Visteon is an important, preferred supplier to Ford, we have committed to providing financial support to help Visteon meet its business challenges," Brown said in a statement.
He said Ford will not be changing its "fundamental business relationship" with Visteon and has no plans to buy back its businesses or manufacturing plants.
Visteon also filed a request with the bankruptcy court to keep serving customers and paying suppliers and employees. The company has facilities in 27 countries and employs approximately 31,000 people.
The company had total liabilities of $3.96 billion and total assets of $4.56 billion as of March 31. Cash and short-term investments totaled $625 million.