* Industry should brace for "multi-year payback" in Europe
* Some companies, investors scoping out deals in Europe
By Deepa Seetharaman
DETROIT, Feb 28 The auto industry's turnaround
efforts will take longer to gain traction in Europe than in the
United States, where some companies were able to see the fruits
of their plans within a year, Visteon Corp top executive
said on Thursday.
The longer time frame partly stems from the fact that the
severance pay required to lay off workers in some areas of
Europe is higher than in the United States, Chief Executive Tim
Leuliette said in an interview.
Furthermore, companies have struggled to keep pace with the
sharp, rapid deterioration in the economy as austerity measures
and unemployment have hurt consumer spending.
"Everyone's trying to pin a tail on the donkey, but the
donkey does move," Leuliette said, after the auto parts maker
reported fourth-quarter earnings Thursday.
Europe is Visteon's second-largest source of revenue. Last
year, Visteon said it would make cuts in Europe and close plants
around the world to cope with slowing demand.
Last month, new vehicle registrations in Europe fell to
918,280, the slowest January since its records began in 1990,
the Association of European Automakers said.
"As Europe continues to contract, you have to always be
cognizant of making sure you have the right assets and the right
employment base in line with that reality," Leuliette said.
He added: "It typically is a multi-year payback to address
restructuring in Europe."
SELLING INTERIORS UNIT A TOP PRIORITY
Visteon, former parts affiliate of Ford Motor Co,
reported a fourth-quarter net income of $39 million or 74 cents
a share, reversing a loss of $26 million or 51 cents per share a
Leuliette, who has been Visteon CEO since September, is in
the midst of revamping the company in response to concerns from
investors and directors that its presence in too many businesses
is hurting its market value.
One of Leuliette's top priorities in 2013 is to divest the
company's interiors business. He declined to discuss the sale
process, but said many companies and strategic investors are
exploring potential deals in the auto parts business.
"There's a whole group of people who believe Europe is the
U.S. of '09 and '10 and are buying assets now or looking at
assets now because the price is right," he said.
"There are other people who see segments of the industry
that still need consolidation," he added.
The U.S. auto industry came to the brink of collapse in 2009
when the economic recession pushed General Motors Co and
Chrysler Group LLC to take federal bailouts to survive.
Since then, the sector has rebounded. On Friday, automakers
are expected to report strong U.S. auto sales for the month of