UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN

GLYNN LEY, Individually and On Behalf of All Others Similarly Situated,

Plaintiff,

L'1'!

VISTEON CORP., PETER PEST1LLO, MICHAEL JOHNSTON, DANIEL R. COULSON AND JAMES PALMER,

Defendants.

CIVIL ACTION NO.

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDED

Plaintiff, Glynn Ley ("Plaintiff) individually and on behalf of all other persons similarly

situated, by his undersigned attorneys, for his complaint against defendants, alleges the following

based upon personal knowledge as to himself and his own acts, and information and belief as to all

other matters, based upon, inter a/ia, the investigation conducted by and through his attorneys, which

included, among other things, a review of the defendants' public documents, conference calls and

announcements made by defendants, United States Securities and Exchange Commission ("SEC")

filings, wire and press releases published by and regarding Visteon Corp. ("Visteon" or the

"Company") securities analysts' reports and advisories about the Company, and information readily

obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the

allegations set forth herein after a reasonable opportunity for discovery.

-1-

NATURE OF THE ACTION

1. This is a federal class action on behalf of persons who purchased the securities of

Visteon between January 23, 2004 and January 31, 2005, inclusive (the "Class Period"), seeking to

pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").

JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act, (15 U.S.C. §§ 78j(b) and 78t(a)), and Rule lOb-S promulgated thereunder (17

C.F.R. §240.10b-5).

3. This Court has jurisdiction over the subject matter of this action pursuant to §27 of

the Exchange Act (15 U.S.C. §78aa) and 28 U.S.C. § 1331.

4. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 15

U.S.C. § 78aa and 28 U.S.C. § 1391(b). Many of the acts and transactions alleged herein, including

the preparation and dissemination of materially false and misleading information, occurred in

substantial part in this Judicial District. Additionally, the Company maintains a principal executive

office in this Judicial District.

S. In connection with the acts, conduct and other wrongs alleged in this complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including but not limited to, the United States mails, interstate telephone communications and the

facilities of the national securities exchange.

-2-

PARTIES

6. Plaintiff, Glynn Ley, as set forth in the accompanying certification, incorporated by

reference herein, purchased Visteon securities at artificially inflated prices during the Class Period

and has been damaged thereby.

7. Defendant Visteon is a Delaware corporation with its principal executive offices

located at One Village Center Drive, Van Buren Township, Michigan 48111.

8. Defendant Peter J. Pestillo ("Pestillo") was, since July 1, 2004, the Company's

Chairman. Prior to July of 2004, defendant Pestillo was the Company's Chief Executive Officer.

9. Defendant Michael F. Johnston ("Johnston") was, since July 1, 2004, the Company's

Chief Executive Officer and President. Prior to July of 2004, defendant Johnston was the

Company's Chief Operating Officer.

10. Defendant Daniel R. Coulson ("Coulson") was, until his retirement on March 31,

2004, the Company's Vice President and Chief Financial Officer.

ii. Defendant James Palmer ("Palmer") was, since June 2, 2004, the Company's Chief

Financial Officer and Executive Vice President.

12. Defendant Glenda J. Minor ("Minor") was, at all relevant times, the Company's Vice

President and Chief Accounting Officer.

13. Defendants Pestillo, Johnston, Coulson, Palmer, and Minor are collectively referred

to hereinafter as the "Individual Defendants." During the Class Period, each of the individual

defendants, as senior executive officers and/or directors of Visteon was privy to non-public

information concerning its business, finances, products, markets and present and future business

prospects via access to internal corporate documents, conversations and connections with other

2

-3-

corporate officers and employees, attendance at management and Board of Directors meetings and

committees thereof and via reports and other information provided to them in connection therewith.

Because of their possession of such information, the Individual Defendants knew or recklessly

disregarded the fact that adverse facts specified herein had not been disclosed to, and were being

concealed from, the investing public.

14. Because of the Individual Defendants' positions with the Company, they had access

to the adverse undisclosed information about the Company's business, operations, operational trends,

financial statements, markets and present and future business prospects via access to internal

corporate documents (including the Company's operating plans, budgets and forecasts and reports

of actual operations compared thereto), conversations and connections with other corporate officers

and employees, attendance at management and Board of Directors meetings and committees thereof

and via reports and other information provided to them in connection therewith.

15. It is appropriate to treat the Individual Defendants as a group for pleading purposes

and to presume that the false, misleading and incomplete information conveyed in the Company's

public filings, press releases and other publications as alleged herein are the collective actions of the

narrowly defined group of defendants identified above. Each of the above officers of Visteon, by

virtue of his or her high-level position with the Company, directly participated in the management

of the Company, was directly involved in the day-to-day operations of the Company at the highest

levels and was privy to confidential proprietary information concerning the Company and its

business, operations, growth, financial statements, and financial condition, as alleged herein. Said

defendants were involved in drafting, producing, reviewing and/or disseminating the false and

misleading statements and information alleged herein, were aware, or recklessly disregarded, that

-4-

the false and misleading statements were being issued regarding the Company, and approved or

ratified these statements, in violation of the federal securities laws.

16. As officers and controlling persons of a publicly-held company whose securities were

and are registered with the SEC pursuant to the Exchange Act, and was traded on the New York

Stock Exchange ("NYSE") and governed by the provisions of the federal securities laws, the

Individual Defendants each had a duty to disseminate accurate and truthful information promptly

with respect to the Company's financial condition and performance, growth, operations, financial

statements, business, markets, management, earnings and present and future business prospects, and

to correct any previously-issued statements that bad become materially misleading or untrue, so that

the market price of the Company's publicly-traded securities would be based upon truthful and

accurate information. The Individual Defendants' misrepresentations and omissions during the Class

Period violated these specific requirements and obligations.

17. The Individual Defendants participated in the drafting, preparation, and/or approval

of the various public and shareholder and investor reports and other communications complained

of herein and were aware of, or recklessly disregarded, the misstatements contained therein and

omissions therefrom, and were aware of their materially false and misleading nature. Because of

their Board membership and/or executive and managerial positions with Visteon, each of the

Individual Defendants had access to the adverse undisclosed information about Visteon financial

condition and performance as particularized herein and knew (or recklessly disregarded) that these

adverse facts rendered the positive representations made by or about Visteon and its business issued

or adopted by the Company materially false and misleading.

-5-

18. The Individual Defendants, because of their positions of control and authority as

officers and/or directors of the Company, were able to and did control the content of the various SEC

filings, press releases and other public statements pertaining to the Company during the Class Period.

Each Individual Defendant was provided with copies of the documents alleged herein to be

misleading prior to or shortly after their issuance and/or had the ability and/or opportunity to prevent

their issuance or cause them to be corrected. Accordingly, each of the Individual Defendants is

responsible for the accuracy of the public reports and releases detailed herein and is therefore

primarily liable for the representations contained therein.

19. Each of the defendants is liable as a participant in a fraudulent scheme and course of

business that operated as a fraud or deceit on purchasers of Visteon securities by disseminating

materially false and misleading statements and/or concealing material adverse facts. The scheme

(i) deceived the investing public regarding Visteon business, operations, management and the

intrinsic value of Visteon securities; and (ii) caused Plaintiff and other members of the Class to

purchase Visteon securities at artificially inflated prices.

PLAINTIFF'S CLASS ACTION ALLEGATIONS

20. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased the securities

of Visteon between January 23, 2004 and January 31, 2005, or the Class Period, and who were

damaged thereby. Excluded from the Class are defendants, the officers and directors of the

Company, at all relevant times, members of their immediate families and their legal representatives,

heirs, successors or assigns and any entity in which defendants have or had a controlling interest.

INI

21. The members of the Class are so numerous that joinder of all members is imprac-

ticable. Throughout the Class Period, Visteon's securities were actively traded on the NYSE. While

the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained

through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members

in the proposed Class. Record owners and other members of the Class may be identified from

records maintained by Visteon or its transfer agent and maybe notified of the pendency of this action

by mail, using the form of notice similar to that customarily used in securities class actions.

22. Plaintiffs claims are typical of the claims of the members of the Class, as all

members of the Class are similarly affected by defendants' wrongful conduct in violation of federal

law that is complained of herein.

23. Plaintiff will fairly and adequately protect the interests of the members of the Class

and has retained counsel competent and experienced in class and securities litigation.

24. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by defendants' acts as alleged

herein;

(b) whether statements made by defendants to the investing public during the Class

Period misrepresented material facts about the business, operations and management ofVisteon; and

(c) to what extent the members of the Class have sustained damages and the proper

measure of damages.

-7-

25. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

Background

26. Visteon is a global supplier of automotive systems, modules and components to

vehicle manufacturers and the automotive aftermarket. The Company operates in two business

segments: Automotive Operations and Glass Operations. The Automotive Operations segment

provides automotive systems, modules and components in the following product areas: climate

control, interior, exterior, powertrain, chassis and electronics. Its products are featured on vehicles

built by many automotive manufacturers, including Ford Motor Company, General Motors, Toyota,

DaimlerChrysler, Volkswagen, Honda, Renault, Nissan, Hyundai, Peugeot, Mazda and BMW. The

Automotive Operations segment accounted for 97% of the Company's 2003 total sales. The Glass

Operations segment designs, produces and distributes automotive glass products for Ford and

aftermarket customers, and float glass for commercial architectural and automotive applications.

Glass Operations accounted for 3% of 2003 total sales.

Materially False And Misleading Statements Issued During The Class Period

27. The Class Period commences on January 23, 2004. At that time, Visteon announced

fourth quarter and full year results for 2003. For the fourth quarter 2003, Visteon reported a net loss

of $863 million. These results included special charges of $756 million. In the fourth quarter of

2002, Visteon reported a net loss of $34 million, including special charges of $51 million. More

specifically, the Company, in its press release, stated:

The fourth quarter 2003 results include $260 million of fixed asset write- downs, a charge of $468 million to increase deferred tax asset valuation allowances, and restructuring charges of $28 million. In aggregate, after tax, these items total $756 million, or $6.02 per share.

Revenue for fourth quarter 2003 was $4.5 billion, down $84 million from fourth quarter of 2002. Non-Ford revenue totaled $1.2 billion for the quarter, up $186 million from the fourth quarter of 2002, and represented 26% of total sales.

"We've completed many significant actions during the course of 2003 to improve our performance in 2004 and beyond," said Peter J. Pestillo, Visteon's chairman and chief executive officer. "Our agreements with Ford and the UAW, the exit of seating and other restructuring activities, combined with new business revenue, enable us to substantially improve our results going forward."

Full Year 2003

For the full year 2003, Visteon recorded a net loss of $1.2 billion or $9.65 per share. These results include the fixed asset write-downs and increase in the deferred tax asset valuation allowance recorded in the fourth quarter, and restructuring and other special items of $219 million. In aggregate, after tax, these items total $947 million, or $7.53 per share.

Total revenue for full year 2003 was $17.7 billion, down $735 million from full year 2002. Non-Ford revenue totaled $4.2 billion for the year, up $569 million from the full year 2002, and represented 24% of total sales.

For full year 2002, Visteon recorded a net loss of $352 million or $2.75 per share. Included in these results were special charges of $142 million and $265 million for the non-cash write-off for the value of goodwill associated with adoption of Statement of Financial Accounting Standards No. 142.

In

Cash and Debt-to-Capital

Visteon ended the year with $956 million in cash and marketable securities, up slightly from September 30, 2003. Year-end debt outstanding was $1.8 billion, and the company's debt-to-capital ratio was 49%.

2004 Outlook

Revenue for full year 2004 is projected to be in the range of $18.6 to $18.8 billion, up substantially from 2003, reflecting primarily non-Ford revenue growth. Non-Ford revenue is expected to exceed $5 billion, and represent 28% of total revenue. For the full year 2004, Visteon expects net income of $0.50 to $1.00 per share. The company expects cash from operations to exceed its capital expenditures for full year 2004.

Year-over-year improvement in earnings is expected to result from: savings related to the European Plan for Growth, exit of seating, and other actions; decreased OPEB expenses; lower SG&A expenses; material cost savings and manufacturing efficiencies; offset partially by price reductions and unfavorable economics. The company also expects significantly lower restructuring charges in 2004 than the amounts recorded for special items and restructuring in 2003.

For the first quarter 2004, Visteon expects net income in the range of $0.05 to $0.15 per share. Revenue is expected to be in the range of $4.8 to $4.9 billion for the quarter. The company expects capital expenditures to exceed cash from operations during the first quarter 2004.

28. On February 13, 2004, Visteon filed its annual report on Form 10-K. The Company's

Form 10-K was signed by defendants Pestillo, Johnston, and Coulson and reaffirmed Visteon's

financial results announced on January 23, 2004 and the following results from Company's fiscal

years 2002 and 2003:

-10-

2003 2002 (in millions, except per share amounts and percentages)

Statement of Operations Data Sales

Ford and affiliates Other customers

Total sales Costs and expenses

Costs of sales Selling, administrative and other expenses

Total costs and expenses Operating income (loss) Interest income Interest expense

$13,475 $14,779 4,185 3,616 17,660 18,395

17,786 17,588 1,002 888

18,788 18,476 (1,128) (81) 17 23 94 103

Net interest expense (77) Equity in net income of affiliated companies 55

Income (loss) before income taxes, minority interests and change in accounting (1,150) Provision (benefit) for income taxes 34

Income (loss) before minority interests and change in accounting

(1,184) Minority interests in net income of subsidiaries

29

(80) 44

(117) (58)

(59) 28

Income (loss) before change in accounting (1,213) (87) Cumulative effect of change in accounting, net of tax - (265) Net income (loss) $(1,213) $ (352) Earnings (loss) per share:

Basic and diluted before cumulative effect of change In accounting (based on 130,000,000 shares outstanding for periods prior to our spin-off)

$ (9.65) $ (0.68) Cumulative effect of change in accounting - (2.07)

Basic and diluted $ (9.65) $ (2.75) Cash dividends per share $ 0.24 $ 0.24

29. Additionally, the Company's Form 10-K contained the following clean audit opinion

from the Visteon's accountants, PricewaterhoseCoopers LLP ("PwC"):

-11-

In our opinion, the consolidated financial statements listed in the index appearing under Item 15 (a)( 1) on page 43 present fairly, in all material respects, the financial position of Visteon Corporation and its subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 1 5(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

30. On April 22, 2004, Visteon reported first quarter 2004 net income of $30 million, or

$0.23 per share. These results were an improvement of $45 million, or $0.35 per share, compared

to a net loss of $15 million, or $0.12 per share, in the first quarter 2003. More specifically, the

Company, in its press release, stated:

Revenue for the first quarter 2004 was $5 billion, up $268 million from first quarter 2003. The increase, compared to a year ago, reflects primarily growth in non-Ford revenue and the favorable impact of exchange rates, Non- Ford revenue totaled $1.3 billion for the quarter, up 36% or about $350 million from the first quarter of 2003.

"The path to profitability that Visteon has been traveling is starting to deliver the results we intended," said Peter J. Pestillo, Visteon's chairman and chief executive officer. "Our performance improvement reflects the actions we have taken and the hard work of our dedicated employees who devote each day to serving our customers with speed, focus and discipline. We're pleased with our new business wins. 2004 will be the year that defines our character as a competitive, global Tier one supplier."

First quarter earnings reflect the benefits from improved operating performance, increased non-Ford business, earlier restructuring actions, and decreased post-retirement health care and life insurance expenses, offset partially by price reductions. Visteon's first quarter earnings were above the company's previous guidance of $0.05 to $0.15 per share primarily due to lower than anticipated post-retirement health care and life insurance benefit expenses.

-12-

Cash provided by operating activities was $105 million, a $240 million improvement in performance from first quarter 2003. Visteon ended the quarter with $1.2 billion in cash and marketable securities.

Second Quarter and Full Year 2004 Outlook

Revenue for second quarter 2004 is projected to be in the range of $4.7 to $4.8 billion, up from $4.6 billion in 2003, reflecting primarily non-Ford revenue growth. Visteon expects second quarter net income of $13 million to $25 million, or $0.10 to $0.20 per share.

Visteon expects full year revenue to be between $18.6 billion and $18.8 billion in 2004. This estimate is based on full year Ford North American vehicle production of 3.7 million units. Non-Ford revenue is expected to exceed $5 billion for the full year. Visteon expects net income of $90 to $140 million, or $0.70 to $1.10 per share. This is higher than the company's previous guidance of $0.50 to $1.00 per share. Full year 2004 projected results include anticipated pre-tax special charges of up to $50 million. Visteon expects cash from operations to be higher than capital spending for the full year.

31. On May 3, 2004, Visteon filed its quarterly report on Form l0-Q. The Company's

form 10-Q was signed by defendant Minor and reaffirmed the Company's financial results

announced on April 22, 2004. Additionally and with respect to the presentation of its financial

results, Visteon represented:

The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments, including normal recurring adjustments, necessary for a fair statement of such information. Results for interim periods should not be considered indicative of results for a full year.

32. On July 22, 2004, Visteon reported second quarter 2004 net income of$3 1 million,

or $0.24 per share. These results are an improvement of$ 198 million, or $1.57 per share, compared

to a net loss of$1 67 million, or $1.33 per share, in the second quarter 2003. More specifically, the

Company, in its press release, stated:

-13-

Visteon reported income before income taxes of $55 million for the second quarter 2004, included in these results were pre-tax special charges of $5 million and $11 million pre-tax expense related to debt extinguishment. In the second quarter of 2003, Visteon reported a loss before income taxes of $256 million including $266 million of pre-tax special charges.

Revenue for the second quarter 2004 was $4.9 billion, up $257 million from second quarter 2003. The increase, compared to a year ago, reflects primarily growth in non-Ford revenue and favorable currency translation, partially offset by lower Ford North American production volumes, the exit ofVisteon's seating operations and price reductions to customers. Non-Ford revenue totaled $1.4 billion for the quarter, up 35% or $358 million compared to the second quarter 2003. Non-Ford revenue in the second quarter represents 28 percent of total sales, a six percentage point improvement from a year ago.

"We're pleased with our second quarter results, especially the continued diversification of our customer base," said Mike Johnston, Visteon chief executive officer and president. "Our performance to the customer in terms of cost, quality and delivery remains our highest priority and has helped us win new business in all major regions of the world. We will be aggressive in the continuation of our cost-reduction and process improvement actions in the second half to ensure our competitive position in the marketplace."

Visteon's net income improved compared to a year ago reflecting the impact of lower special charges, increased new business, improved operating and material efficiencies, and decreased post-retirement health and life insurance expenses, offset by customer price reductions and lower North American Ford production volumes. Net income was also impacted by debt extinguishment costs of $7 million after tax related to a portion of Visteon's public debt securities.

First Half Results

First half revenue totaled $9.8 billion, increasing $525 million from a year ago. Ford revenue decreased $185 million to $7.1 billion for the first half of 2004, reflecting lower Ford North American production, the exit of the Chesterfield seating operations and price reductions granted to Ford, partially offset by favorable currency, increased European production and incremental business with Ford.

-14-

Non-Ford revenue increased $710 million, or 35 percent to $2.7 billion, due primarily to increased business with non-Ford customers.

For the first six months of 2004, Visteon recorded net income of $61 million or $0.48 per share, including $10 million, or $0.08 per share of special charges. For the first six months of 2003, Visteon reported a net loss of$ 182 million, or $1.45 per share, included in these results were special charges of $190 million, or $1.51 per share.

Income before taxes was $111 million for the six months of 2004, including $16 million of pre-tax special charges and $11 million of pre-tax expense related to debt extinguishments. For the first half of 2003, Visteon reported a loss before income taxes of $275 million, including $297 million of pre-tax special charges. The increase reflects lower pre-tax charges of $281 million, increased profits from new business, lower employee retirement benefit and selling and administrative expenses, partially offset by other wage and raw material cost increases and expenses related to debt extinguishment.

Cash and Liquidity

Visteon ended the quarter with $1 billion in cash and marketable securities. Cash flow from operations was $247 million for the second quarter and $352 million for the first half of the year, which reflects an improvement of $223 million and $463 million, respectively, compared to the same periods last year. Increased profits and the company's continued focus on working capital were major contributors to this improvement.

Capital expenditures were $172 million for the second quarter and $370 million for the first half of the year. This compares to $222 million for the second quarter and $403 million for the first half of 2003. Quarter-end debt outstanding was $1.9 billion. Visteon's debt-to-capital ratio was 51 percent.

Third Quarter and Full Year 2004 Outlook

Visteon's revenue for third quarter 2004 is projected to be in the range of $4.0 to $4.1 billion, up from $3.9 billion in 2003, reflecting primarily non-Ford revenue growth. Visteon expects a third quarter net loss of $90 million to $105 million, or $0.70 to $0.80 per share.

-15-

Full year revenue is expected to be between $18.6 billion and $18.8 billion in 2004. Non-Ford revenue is expected to increase more than $1.0 billion from year ago levels. Visteon expects net income of $75 to $110 million for full-year 2004, or $0.60 to $0.90 per share. Full year 2004 projected results include anticipated pre-tax special charges of approximately $50 million.

Visteon expects cash flow from operations to be modestly higher than capital spending for the full year. Visteon's third quarter and full year 2004 estimates are based on third quarter Ford North American production of 755,000 units and full year production of 3.65 million units. A number of factors including a decline in actual or projected production volumes for these or future periods could affect our assessment regarding the recoverability of our deferred tax assets and result in a further write-down, which would increase income tax expense (non-cash charge) and reduce net income significantly in the applicable period.

33. On July 30, 2004, Visteon filed its quarterly report on Form 10-Q. The Company's

form 10-Q was signed by defendant Minor and reaffirmed the Company's financial results

announced on July 22, 2004. Additionally and with respect to the presentation of its financial

results, Visteon represented:

The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments, including normal recurring adjustments, necessary for a fair statement of such information.

34. On October 21, 2004, Visteon announced results for third quarter 2004. Visteon's

worldwide sales for the third quarter of 2004 were up $270 million over the same period in 2003.

More specifically, the Company, in its press release, stated:

We continued to make progress in the diversification of our customer base, recording $1.38 billion in non-Ford sales for the quarter, including nearly $200 million in net new business. This non-Ford sales mark is the highest for any quarter in Visteon's history and was an increase of 37% compared to the same quarter last year. This quarter also marked our lowest Ford sales quarter in our history,

-16-

which was $2.77 billion, a decrease of 4% compared to the same period last year.

Visteons worldwide sales in the first nine months of 2004 were $14.0 billion, compared with $13.2 billion in the first nine months of 2003. Sales to non-Ford customers reached $4.1 billion for the first nine months of 2004, an increase of $1.1 billion over the comparable period in 2003, and accounted for 29% of total sales for the first nine months.

Significant special charges in the quarter, totaling $1.2 billion or $9.64 per share, contributed to a net loss of $1.36 billion, or $10.86 per share. Special charges included the non-cash increase in deferred tax asset valuation allowances of $872 million and a non-cash asset impairment write-down of $314 million to reduce the net book value of fixed assets related to the steering systems product group. Additionally, we recognized $25 million of charges related to early retirement and relocation programs to reduce our Master Agreement UAW workforce that we lease from Ford. Operating losses were primarily due to increasing material and fuel costs, which we have been unable to defray through pricing or other means, and the inflexible cost structure of our legacy businesses relative to production volumes. Our results were aided by product recall and annual incentive compensation accrual adjustments.

Net loss for the first nine months of 2004 was $1,299 million, or $10.37 per share, a change of $949 million over a net loss of $350 million, or $2.78 per share, for the first nine months of 2003.

Cash from operations was $227 million during the first nine months of 2004, an improvement of$ 195 million versus the same period last year, and we ended the first nine months of 2004 with $734 million in cash and marketable securities.

Compared to the third quarter of 2004, we expect our revenues to increase in the fourth quarter of 2004, primarily due to the typical increase in Fords North American production volumes during the fourth quarter. However, our current cost structure combined with escalating material surcharges will challenge our operating performance for the rest of the year. As we announced previously, we are exploring strategic and structural changes to our business in the U.S. to achieve a sustainable and competitive business. We are currently in discussions with Ford regarding these and other matters.

-17-

We cannot predict the impact such discussions or any related actions may have on our results of operations or financial condition at this time. Although we expect to reach an agreement, there can be no assurance that we will reach a favorable agreement with Ford in the near term or at all.

35. On November 14, 2004, Visteon filed its quarterly report on Form 10-Q. The

Company's form 10-Q was signed by defendant Palmer and reaffirmed the Company's financial

results announced on October 21, 2004. Additionally and with respect to the presentation of its

financial results, Visteon represented:

The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments, including normal recurring adjustments, necessary for a fair statement of such information.

36. The statements contained in 11 27-35 were materially false and misleading when

made because defendants failed to disclose or indicate the following: (1) that the Company continued

to maintain unprofitable product lines, such glass and powertrain systems, even when faced with

declining North American auto sales and rising raw-material costs; (2) that the Company was overly

dependent on Ford Motor Co. ("Ford"), as 70 percent of Visteon's revenue came from Ford; (3) that

the failed to adequately control costs; (4) that the Company improperly accounted for certain retiree

health care and pension benefits, and income taxes and as a result Visteon had to reverse $9 million

in expense reductions for U.S. post-retirement life and health care costs and to adjust the valuation

allowance on deferred tax assets by $17 million; (5) that a result of the foregoing Company's

financial results were in violation of Generally Accepted Accounting Principles ("GAAP") and were

materially inflated at all relevant times; and (6) that as a consequence of the above, the defendants

had no reasonable basis for positive statements about Visteon's financial condition.

-18-

The Truth Begins To Emerge

37. On January 31, 2005, Visteon announced preliminary fourth quarter and full year

results for 2004. For the fourth quarter 2004, Visteon reported revenue of $4.7 billion, up 5 percent

compared with the same period in 2003. More specifically, the Company, in its press release, stated:

For the full year 2004, revenue totaled $18.7 billion, up $1 billion compared to 2003, despite a $460 million decline in Ford revenue. Full-year non-Ford revenue reached a record $5.7 billion, up 36 percent over 2003. Full-year non-Ford revenue represented 30 percent of total revenue.

"Our record non-Ford revenue growth in 2004 exceeded our expectations and serves as testament to the innovative products customers are counting on us to deliver," said Mike Johnston, president and chief executive officer. "Our new business wins in 2004 continue to be in the growth products that are core to our success - interiors, climate and electronics, including lighting. We've strengthened our competitive position to serve customers around the globe by opening and expanding technical centers in every region.

"We have implemented programs to reduce headcount and costs in the United States, but material surcharges and lower North American Ford production have put significant pressure on our operating results. As we announced last September, we are exploring strategic and structural changes to our U.S. operations to achieve a sustainable and competitive business. We are having constructive and ongoing discussions with Ford about such changes."

Visteon's results are preliminary because, during the course of the year- end closing process, errors were discovered in the company's accounting for certain retiree health care and pension benefits, and income taxes. Management has made an initial evaluation of the impact of these errors and has included preliminary financial results reflecting these estimates. Because of these errors, Visteon is, in consultation with its independent registered public accounting firm, PricewaterhouseCoopers LLP, reviewing prior reports filed with the Securities and Exchange Commission to determine if any other adjustments or corrections are necessary. Visteon has not identified any other necessary adjustments at this time.

-19-

Fourth Quarter 2004

During the fourth quarter of 2004, Visteon changed the method of determining the cost of production inventory for U.S. locations from the last- in, first-out (LIFO) method to the first-in, first-out (FIFO) method. Visteon believes the FIFO method of inventory costing will provide more meaningful information to investors and conforms all inventories to the same FIFO basis. In accordance with Accounting Principles Board Opinion No. 20, "Accounting Changes", a change from the LIFO method of inventory costing to another method is considered a change in accounting principle that should be applied by retroactively restating all prior periods.

For the fourth quarter 2004 Visteon reported a net loss of $115 million, or $0.92 per share. These results include $41 million of after-tax special charges, or $0.33 per share, primarily related to costs associated with a U.S. salaried employee voluntary termination incentive program that will result in a reduction of approximately 400 employees by March 31, 2005.

For the fourth quarter 2003, as restated, Visteon reported anet loss of $829 million, or $6.60 per share. These results included asset impairment write-downs, an increase in deferred tax asset valuation allowances, and special charges totaling $720 million after-tax, or $5.73 per share.

Full Year 2004

For the full year 2004, Visteon recorded a net loss of $1.489 billion, or $11.88 per share. These results include non-cash write-downs of $871 million for increased valuation allowances against Visteon's deferred taxes, $314 million for asset impairment write-downs, and $78 million for other special charges. In aggregate these items totaled $1.263 billion after tax, or $10.08 per share.

For the full year 2003, as restated, Visteon recorded a net loss of $1.190 billion or $9.46 per share. These results include the asset impairment write- downs, an increase in deferred tax asset valuation allowances and other special charges. In aggregate, after-tax, these items totaled $911 million, or $7.24 per share.

For the full year 2004, cash flow from operations was $427 million, a $57 million increase from 2003. Cash payments related to capital

-20-

expenditures were $836 million for the full year 2004, $43 million lower than 2003. At year end 2004, Visteon had $752 million of cash and marketable securities, down $204 million from the previous year end.

2005 Outlook

Visteon is exploring strategic and structural changes to its business in the United States that would involve Ford and Visteon's legacy businesses. Visteon is seeking a comprehensive agreement that could address a number of items. The discussions with Ford have been constructive and are ongoing.

Because of the uncertainty surrounding future market and economic conditions, combined with Visteon's ongoing discussions with Ford, Visteon is not providing specific guidance at this time.

"In light of mounting challenges facing our business, we are identifying actions to improve the company's cost structure and cash position," said Johnston. "In addition to our strategic and structural discussions with Ford, we are taking actions to focus capital and engineering resources to growth areas only, and minimize the impact of material surcharges."

The Board of Directors considers each quarter whether to declare a cash dividend, and has declared and paid a cash dividend each quarter since its spin off from Ford in 2000. In light of the uncertainty regarding future market conditions, Visteons current financial conditions and the ongoing discussions with Ford, the Board intends to discuss its options regarding the cash dividend at its regularly scheduled February 9, 2005 meeting, including modification or suspension of the dividend.

Accounting Restatements

Effective in January 2002, Visteon amended its retiree health care benefits plan for certain of its U.S. employees. Effective in January 2004, a Visteon wholly owned subsidiary amended its retiree health care benefits plan for its employees. These amendments changed the eligibility requirements for participants in the plan. As a result of these amendments, Visteon changed the expense attribution periods, which eliminated cost accruals for younger employees and increased accrual rates for older participating employees. Prior to these

-21-

amendments, Visteon accrued for the cost of the benefit from a participating employee's date of hire, regardless of age. During the course of preparing Visteon's 2004 financial statements, it was determined that the requirement to properly communicate these benefit changes to affected employees was not satisfied.

Further, analysis of the annual United Kingdom pension valuation identified pension expense related to special termination benefits provided under Visteon's European Plan for Growth were not fully recognized in the company's previous financial statements.

In addition to the employee benefit matters described above, Visteon also corrected the amount and timing of the recognition of certain tax adjustments made during the periods. As the company expects to repatriate earnings of foreign subsidiaries, adjustments were made to provide for the tax effects of foreign currency movements against the U.S. dollar. These adjustments impacted the timing of the recognition of deferred tax asset valuation allowances in the fourth quarter of 2003 and the third quarter of 2004. Further, the company recognized an additional valuation allowance for certain deferred tax assets that had previously been misclassified and not considered in the company's 2003 deferred tax assessment.

As a result of these errors, Visteon's management has recommended, and the Audit Committee has approved, the review and preliminary restatement of its financial statements for 2002, 2003 and the first three fiscal quarters of 2004. The restatements presented in the accompanying financial information include adjustments that had resulted from the changes described above. The preliminary restatements and adjustments reflected in the attached financial information are being reviewed and could change. Accordingly, investors are cautioned not to rely on the company's historical financial statements for such periods. A preliminary summary of adjustments identified, including related tax effects, is set forth in the "Note to Financial Information."

"Although the OPEB plan changes were disclosed in our public filings, we did not properly communicate these changes to employees who were affected," explained Jim Palmer, executive vice president and chief financial officer. "Because of this lapse in communication, the action cannot be considered effective and we are reversing the change. This is a non-cash item and is unrelated to Ford's recent OPEB reserve announcement. We are hopeful the review of this

-22-

matter and other identified issues will be concluded shortly, allowing for a timely filing of our 2004 10-K.'t

Visteon has concluded that the deficiencies in internal controls that led to the errors constitute a "material weakness," as defined by the Public Company Accounting Oversight Board's Auditing Standard No. 2. Consequently, management will be unable to conclude that Visteon's internal controls over financial reporting are effective as of December 31, 2004. Furthermore, Visteon expects that PricewaterhouseCoopers LLP will issue an adverse opinion with respect to the company's internal controls over financial reporting, which opinion will be included in Visteon's 2004 Form 10-K.

38. News of this shocked the market. Shares of Visteon fell $0.51 or 6.43 percent, on

January 31, 2005, to close $7.42 per share.

POST CLASS PERIOD STATEMENTS

39. On February 9, 2005, Visteon announced a decision to suspend the Company's

quarterly cash dividend on its common stock. The previous quarterly dividend was $0.06 per share

paid in December 2004.

40. On this news shares of Visteon fell another $0.19 per share or 2.70 percent, on

February 10, 2005, to close at $6.86 per share.

41. On February 18,2005, Moody's Investors Service ("Moody's) cut Visteon debt ratings

deeper into junk status. Moody's cut Visteon's senior implied rating to "Ba2," the second highest

junk rating, from "Bal."

VISTEON'S VIOLATION OF GAAP RULES IN ITS QUARTERLY AND ANNUAL REPORTS FILED WITH THE SEC

42. Given these accounting irregularities, the Company announced financial results that

were in violation of GAAP, the Company's own announced revenue recognition policies, and the

following principles:

-23-

(a) The principle that "interim financial reporting should be based upon the same

accounting principles and practices used to prepare annual financial statements" was

violated (APB No. 28, 110);

(b) The principle that "financial reporting should provide information that is useful to

present to potential investors and creditors and other users in making rational

investment, credit, and similar decisions" was violated (FASB Statement of Concepts

No. 1, 134);

(c) The principle that "financial reporting should provide information about the

economic resources of an enterprise, the claims to those resources, and effects of

transactions, events, and circumstances that change resources and claims to those

resources" was violated (FASB Statement of Concepts No. 1, ¶40);

(d) The principle that "financial reporting should provide information about an

enterprise's financial performance during a period" was violated (FASB Statement

of Concepts No. 1, 142);

(e) The principle that "completeness, meaning that nothing is left out of the information

that may be necessary to insure that it validly represents underlying events and

conditions" was violated (FASB Statement of Concepts No. 2, ¶79);

(f) The principle that "financial reporting should be reliable in that it represents what it

purports to represent" was violated (FASB Statement of Concepts No. 2, 1158-59);

and

-24-

(g) The principle that 'conservatism be used as a prudent reaction to uncertainty to try

to ensure that uncertainties and risks inherent in business situations are adequately

considered" was violated. (FASB Statement of Concepts No. 2, ¶95).

43. The adverse information concealed by defendants during the Class Period and

detailed above was in violation of Item 303 of Regulation S-K under the federal securities law (17

C.F.R. 229.303).

UNDISCLOSED ADVERSE FACTS

44. The market for Visteon's securities was open, well-developed and efficient at all

relevant times. As a result of these materially false and misleading statements and failures to

disclose, Visteon's securities traded at artificially inflated prices during the Class Period. Plaintiff

and other members of the Class purchased or otherwise acquired Visteon securities relying upon the

integrity of the market price of Visteon's securities and market information relating to Visteon, and

have been damaged thereby.

45. During the Class Period, defendants materially misled the investing public, thereby

inflating the price of Visteon's securities, by publicly issuing false and misleading statements and

omitting to disclose material facts necessary to make defendants' statements, as set forth herein, not

false and misleading. Said statements and omissions were materially false and misleading in that

they failed to disclose material adverse information and misrepresented the truth about the Company,

its business and operations, as alleged herein.

46. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by plaintiff and other members of the Class. As described herein, during the

-25-

Class Period, defendants made or caused to be made a series of materially false or misleading

statements about Visteon's business, prospects and operations. These material misstatements and

omissions had the cause and effect of creating in the market an unrealistically positive assessment

of Visteon and its business, prospects and operations, thus causing the Company's securities to be

overvalued and artificially inflated at all relevant times. Defendants' materially false and misleading

statements during the Class Period resulted in plaintiff and other members of the Class purchasing

the Company's securities at artificially inflated prices, thus causing the damages complained of

herein.

ADDITIONAL SCIENTER ALLEGATIONS

47. As alleged herein, defendants acted with scienter in that defendants knew that the

public documents and statements issued or disseminated in the name of the Company were

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced in

the issuance or dissemination of such statements or documents as primary violations of the federal

securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their receipt of

information reflecting the true facts regarding Visteon, their control over, and/or receipt and/or

modification of Visteon's allegedly materially misleading misstatements and/or their associations

with the Company which made them privy to confidential proprietary information concerning

Visteon, participated in the fraudulent scheme alleged herein.

48. Defendants knew and/or recklessly disregarded the falsity and misleading nature of

the information which they caused to be disseminated to the investing public. The ongoing

fraudulent scheme described in this complaint could not have been perpetrated over a substantial

-26-

period of time, as has occurred, without the knowledge and complicity of the personnel at the highest

level of the Company, including the Individual Defendants.

49. Additionally, during the Class Period and with the Company's stock trading at an

inflated price Visteon closed on a $450 million notes offering, due 2014. The notes were issued at

a public offering price of 99.957 percent of par and bear interest at a rate of 7.00 percent per year.

Applicability Of Presumption Of Reliance: Fraud-On-The-Market Doctrine

50. At all relevant times, the market for Visteon securities was an efficient market for the

following reasons, among others:

(a) Visteon stock met the requirements for listing, and was listed and actively traded

on the NYSE, a highly efficient and automated market;

(b) As a regulated issuer, Visteon filed periodic public reports with the SEC and the

NYSE;

(c) Visteon regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press releases on the

national circuits of major newswire services and through other wide-ranging public disclosures, such

as communications with the financial press and other similar reporting services; and

(d) Visteon was followed by several securities analysts employed by maj or brokerage

firms who wrote reports which were distributed to the sales force and certain customers of their

respective brokerage firms. Each of these reports was publicly available and entered the public

marketplace.

-27-

51. As a result of the foregoing, the market for Visteon securities promptly digested

current information regarding Visteon from all publicly-available sources and reflected such

information in Visteon' s stock price. Under these circumstances, all purchasers ofVisteon securities

during the Class Period suffered similar injury through their purchase of Visteon securities at

artificially inflated prices and a presumption of reliance applies.

NO SAFE HARBOR

52. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking statements"

when made. To the extent there were any forward-looking statements, there were no meaningful

cautionary statements identifying important factors that could cause actual results to differ materially

from those in the purportedly forward-looking statements. Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are

liable for those false forward-looking statements because at the time each of those forward-looking

statements was made, the particular speaker knew that the particular forward-looking statement was

false, and/or the forward-looking statement was authorized and/or approved by an executive officer

of Visteon who knew that those statements were false when made.

FIRST CLAIM Violation Of Section 10(b) Of

The Exchange Act Against And Rule 10b-5 Promulgated Thereunder Against All Defendants

53. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

Na

54. During the Class Period, defendants carried out a plan, scheme and course of conduct

which was intended to and, throughout the Class Period, did: (i) deceive the investing public,

including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and other

members of the Class to purchase Visteon securities at artificially inflated prices. In furtherance of

this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions set

forth herein.

55. Defendants (a) employed devices, schemes, and artifices to defraud; (b) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements

not misleading; and (c) engaged in acts, practices, and a course ofbusiness which operated as a fraud

and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high

market prices for Visteon securities in violation of Section 10(b) of the Exchange Act and Rule lOb-

5. All defendants are sued either as primary participants in the wrongful and illegal conduct charged

herein or as controlling persons as alleged below.

56. Defendants, individually and in concert, directly and indirectly, by the use, means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the business, operations

and future prospects of Visteon as specified herein.

57. These defendants employed devices, schemes, and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a course

of conduct as alleged herein in an effort to assure investors of Visteon value and performance and

continued substantial growth, which included the making of, or the participation in the making of,

untrue statements of material facts and omitting to state material facts necessary in order to make the

-29-

statements made about Visteon and its business operations and future prospects in the light of the

circumstances under which they were made, not misleading, as set forth more particularly herein,

and engaged in transactions, practices and a course of business which operated as a fraud and deceit

upon the purchasers of Visteon securities during the Class Period.

58. Each of the Individual Defendants' primary liability, and controlling person liability,

arises from the following facts: (i) the Individual Defendants were high-level executives and/or

directors at the Company during the Class Period and members of the Company's management team

or had control thereof; (ii) each of these defendants, by virtue of his or her responsibilities and

activities as a senior officer and/or director of the Company was privy to and participated in the

creation, development and reporting of the Company's internal budgets, plans, projections and/or

reports; (iii) each of these defendants enjoyed significant personal contact and familiarity with the

other defendants and was advised of and had access to other members of the Company's

management team, internal reports and other data and information about the Company's finances,

operations, and sales at all relevant times; and (iv) each of these defendants was aware of the

Company's dissemination of information to the investing public which they knew or recklessly

disregarded was materially false and misleading.

59. The defendants had actual knowledge of the misrepresentations and omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them. Such defendants'

material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose

and effect of concealing Visteon's operating condition and future business prospects from the

investing public and supporting the artificially inflated price of its securities. As demonstrated by

-30-

defendants' overstatements and misstatements of the Company's business, operations and earnings

throughout the Class Period, defendants, if they did not have actual knowledge of the

misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by

deliberately refraining from taking those steps necessary to discover whether those statements were

false or misleading.

60. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of Visteon securities was

artificially inflated during the Class Period. In ignorance of the fact that market prices of Visteon's

publicly-traded securities were artificially inflated, and relying directly or indirectly on the false and

misleading statements made by defendants, or upon the integrity of the market in which the securities

trade, and/or on the absence of material adverse information that was known to or recklessly

disregarded by defendants but not disclosed in public statements by defendants during the Class

Period, Plaintiff and the other members of the Class acquired Visteon securities during the Class

Period at artificially high prices and were damaged thereby.

61. At the time of said misrepresentations and omissions, Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding the problems that Visteon was

experiencing, which were not disclosed by defendants, Plaintiff and other members of the Class

would not have purchased or otherwise acquired their Visteon securities, or, if they had acquired

such securities during the Class Period, they would not have done so at the artificially inflated prices

which they paid.

-31-

62. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange

Act, and Rule lOb-5 promulgated thereunder.

63. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and the

other members of the Class suffered damages in connection with their respective purchases and sales

of the Company's securities during the Class Period.

SECOND CLAIM Violation Of Section 20(a) Of

The Exchange Act Against the Individual Defendants

64, Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

65. The Individual Defendants acted as controlling persons ofVisteon within the meaning

of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions, and

their ownership and contractual rights, participation in and/or awareness of the Company's

operations and/or intimate knowledge of the false financial statements filed by the Company with

the SEC and disseminated to the investing public, the Individual Defendants had the power to

influence and control and did influence and control, directly or indirectly, the decision-making of

the Company, including the content and dissemination of the various statements which Plaintiff

contend are false and misleading. The Individual Defendants were provided with or had unlimited

access to copies of the Company's reports, press releases, public filings and other statements alleged

by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the

ability to prevent the issuance of the statements or cause the statements to be corrected.

66. In particular, each of these defendants had direct and supervisory involvement in the

day-to-day operations of the Company and, therefore, is presumed to have had the power to control

-32-

or influence the particular transactions giving rise to the securities violations as alleged herein, and

exercised the same.

67. As set forth above, Visteon and the Individual Defendants each violated Section 10(b)

and Rule 1 Ob-5 by their acts and omissions as alleged in this Complaint. By virtue of their positions

as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of the

Exchange Act. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and other

members of the Class suffered damages in connection with their purchases of the Company's

securities during the Class Period.

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of Civil

Procedure and Plaintiff's counsel as Lead Counsel;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

-33-

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

Dated:

By: MILLER SHEA PC Marc Neuman 950 West University Drive Suite 300 Rochester, Michigan 48307 (248) 841-2200

SCHIFFRIN & BARRO WAY, LLP Marc A. Topaz, Esquire Richard A. Maniskas, Esquire Tamara Skvirsky, Esquire 280 King of Prussia Road Radnor, PA 19087 (610) 667-7706

Attorneys for Plaintiff

-34-