Visteon seeks to cut retiree health care, award exec bonuses !!
By Daniel at 1 July, 2009, 1:14 pm
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Visteon Corp. asked a federal bankruptcy judge to approve several executive incentive programs worth more than $80 million, while seeking to cancel health and life insurance benefits to retirees.
The Van Buren Township-based auto supplier has trimmed its work force more than 20 percent since January, cut salaries, shortened workweeks and made changes to employee health care benefits. The company, a former parts unit of Ford Motor Co. until 2000, sought bankruptcy protection in Delaware on May 28.
Visteon said it expects to spend $31 million on retiree health care and life insurance for current retirees. It says it has $310 million in long-term liability for current and future retirees.
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The company said 4,480 current retirees — including 3,100 hourly retirees — would lose coverage under its request. About 1,000 current and former employees are eligible for future coverage. An unspecified number of spouses and dependents also are covered by the program.
A hearing on the request is set for Aug. 13 in U.S. Bankruptcy Court in Delaware and objections are due by July 30.
In a separate motion filed Tuesday, Visteon sought permission to fund three bonus programs.
The key executive incentive program would give cash awards to about 100 top Visteon executives — as much as $30.1 million this year. The awards would be as much as 250 percent of an executive’s base salary.
Visteon also wants permission to continue an Annual Incentive Plan that could give 2,050 employees and 400 inactive employees cash bonuses in February 2010 on financial and quality goals. Visteon said it could award $9.5 million on the quality goals — and another $28.5 million on the financial goals — but isn’t likely to award any funds under the financial goals. A third program — the Long-Term Incentive program — would allow for $12.2 million in payments in 2010 and 2011.
Visteon says the programs are necessary to keep key executives in place.
The parts-maker’s sales fell from $2.9 billion in the second quarter of 2008 to just $1.4 billion in the first three months of 2009.
The company has been sharply cutting back, and now has 5,769 employees in the United States, down by more than 15,000 since 2006.
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