Ford Motor Co , the No. 2 U.S. automaker, said on Monday that it would sell its last remaining auto parts company to a joint venture between French supplier Valeo SA and a former Detroit Pistons basketball player.
The sale of Ford's Plymouth Township, Michigan-based climate control business fulfills the goal of its Automotive Components Holdings, a unit created in 2005 to manage plants that Ford acquired from its largest parts supplier, Visteon Corp .
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Ford created ACH in October 2005 with 17 plants to prevent parts disruptions while Visteon downsized its operations. Ford intended to sell, close or merge those operations over time.
"Few companies take the longer-term comprehensive approach we took with the restructuring of ACH," said Mark Fields, Ford's president of Americas. The company did not disclose the sale price.
Earlier this year, Ford sold an interiors parts business to French supplier Faurecia and a lighting business to an affiliate of auto parts maker Flex-N-Gate.
The climate control business will be sold to Detroit Thermal Systems LLC, a joint venture between Valeo and V. Johnson Enterprises, a company owned by Vinnie Johnson, who earned the nickname "The Microwave" when he played for the Pistons in the 1980s.
The deal will give Valeo, a global player in thermal systems, a firm foothold in the North American market. V. Johnson Enterprises holds 51 percent of Detroit Thermal Systems, while Valeo holds the remaining 49 percent.
The sale is contingent on state and local incentives, Ford said. In mid-2013, Detroit Thermal Systems will begin to transfer assets and operations from the Plymouth Township factory to a new plant in Romulus, Michigan.
The parties expect to complete the process by the end of 2014. Until then, ACH will continue to operate the plant. After that, ACH will close down, spokeswoman Della DiPietro said. Ford will still own the Plymouth Township factory.
The news comes the day before Ford announces third-quarter results. The automaker is expecting to lose $1.5 billion in its European operations, which have been hit hard by an economic downturn that has curtailed vehicle sales.
So far this year, Ford shares have fallen 3.7 percent, while those of larger rival General Motors Co have risen nearly 15 percent and the broad Standard & Poor's 500 stock index has jumped 12.3 percent.
(Reporting by Sakthi Prasad in Bangalore and Deepa Seetharaman in Detroit; Editing by Chris Gallagher and Lisa Von Ahn)