Ford Motor Co. (F) and parts supplier Visteon Inc. (VC)Tuesday announced a definitive agreement to transfer 23 Visteon facilities to a Ford-managed temporary company, preparing most for an eventual sale.

The deal cuts Visteon's revenue by one-third to $11.4 billion and helps the struggling parts maker avoid bankruptcy. It finalizes a deal the two companies reached in May with the approval of the United Auto Workers (search) union.

Van Buren Township, Mich.-based Visteon has struggled since its spinoff from Ford in 2000, most recently under U.S. light vehicle production cuts, rising materials costs and high wage and labor costs inherited from Ford. It has said it expects its restructuring to take several years.

Analysts have considered the spinoff incomplete because of continued employee ties between Visteon and Ford. The facilities transfer, targeted for Oct. 1, is seen as the final step in the separation, although Ford will still account for about half of Visteon's annual revenue.

"It is an effort to make Visteon viable as a stand-alone entity, while providing Ford the opportunity to apply its liquidity to restructure the assets that it is repurchasing," Fitch Ratings managing director Mark Oline said.

Ford, the No. 2 U.S. auto maker, had agreed to help with Visteon's restructuring by taking back loss-making plants.

In the short-term, the deal eases Ford's concerns about potential supply disruptions in a Visteon bankruptcy and, in the long term, Ford should benefit from cost cuts and the ability to obtain parts at a lower cost, Oline said.

Delphi Corp. (DPH), the largest U.S. parts supplier, is also seeking a deal with its former parent, auto maker General Motors Corp. (GM), and its unions, to cut high wage and labor costs in its money-losing U.S. operations.

On Tuesday, Delphi Chief Executive Steve Miller said the parts maker needs a clear framework of an agreement with GM and the UAW by Oct. 17 to avoid filing for bankruptcy protection.

Several U.S. auto parts makers have sought bankruptcy protection in the past year, including interiors supplier Collins & Aikman Corp. and frames producer Tower Automotive Inc., which both suffered under high debt loads. But not all U.S. auto parts suppliers are struggling.

Under the agreement announced Tuesday, 17 Visteon plants and six offices and other facilities will be transferred to Automotive Components Holdings, a new company managed by Ford.

Most of the facilities will be prepared for sale under the arrangement, which Ford said was key to its own cost-cutting strategy.

About 18,000 Ford employees working at Visteon facilities will be assigned to the new company, along with 5,000 salaried employees. Ford expects to offer 5,000 buyouts to Ford workers who are members of the UAW.

Merrill Lynch cut its rating on Visteon to "neutral" from "buy," citing less confidence Visteon can make more substantial cuts in salaried workers after the deal. The transfer of salaried workers to Ford from Visteon for the deal was greater than Merrill Lynch had expected.

Visteon expects to recognize a significant gain related to the closing of the transaction, "well in excess of" a $1.1 billion noncash related charge in the second quarter.

Visteon shares are down about 40 percent overall since the spinoff in 2000, but have jumped 73 percent since Ford and Visteon announced their initial agreement in May.

Visteon shares fell 9 cents, or 0.84 percent, to $10.60, Tuesday on the New York Stock Exchange, while Ford shares fell 10 cents, or 1.01 percent, to $9.82 on the NYSE.