Ford Prepares to Spin Off Auto Parts Unit

Ford Motor Co. will name Vice Chairman Peter Pestillo today as chairman and chief executive of its Visteon Automotive Systems, a step toward making the parts unit independent, people familiar with the situation said. A Ford spokesman declined to comment. The auto maker wants to spin off the $18-billion-a-year parts business so Visteon can compete more effectively for business from other auto makers. Pestillo, 61, would take charge at a delicate time. The United Auto Workers opposed a Visteon separation until it won promises in a contract last month that the unit’s 23,500 UAW members would get the same pay and benefits as Ford workers. As head of labor relations, Pestillo is credited with helping keep the company free of UAW strikes since 1986.

Separately, Ford elected former Treasury Secretary Robert E. Rubin, 61, as a director, effective Jan. 1, expanding its board to 12 members. Rubin two weeks ago joined financial services company Citigroup Inc. as chairman of its executive committee. Rubin, also a onetime co-chairman of Goldman, Sachs & Co., joined the Clinton administration in 1993 as chairman of the National Economic Council; he was Treasury secretary from 1995 until last July. “Investors have put Ford in the penalty box because they fear the company might squander some of the cash they’ve been generating. Robert Rubin will be seen as a strong advocate of shareholder value,” said Lehman Bros. analyst Nick Lobaccaro. Ford shares closed up 50 cents at $53.25 on the NYSE.