Post by TonyV on Dec 17, 2009 2:58:26 GMT -5
Judge says Visteon can cut retirees' benefits
FREE PRESS STAFF AND NEWS SERVICES
Visteon Corp. has permission to eliminate health care benefits for most of its retirees, a bankruptcy judge ruled Thursday.
The cuts to company-paid medical, prescription and life insurance coverage will affect 6,550 current and future retirees as well as their spouses and dependents.
About 110 employees, whose benefits are covered under a bargaining agreement, will be exempt from the cuts.
Visteon said it would save $31 million this year and a total of $310 million by cutting retiree health care benefits.
Van Buren Township-based Visteon, a parts supplier that spun off from Ford Motor Co. in 2000, is making the cuts as part of its plans to emerge from Chapter 11 bankruptcy protection.
The supplier, which makes stereo systems, automotive lighting and heating and cooling systems, employs 30,000 people.
The company filed for bankruptcy in May and plans to submit its reorganization plan by Dec. 17.
The proposal will likely include giving Visteon's lenders the "great majority" of the company's equity once it exits bankruptcy.
One of the issues that the company still must negotiate is its pension obligations.
In court documents filed Wednesday, Visteon said that it has not determined whether it would hand over its pension plans to the federal government's pension insurance agency, the Pension Benefit Guaranty Corp.
The agency, which took on several supplier pensions this year, including those of Delphi's salaried retirees, would cap annual payments to retirees.
The question of pensions has been part of Visteon's discussions with its lenders, who must approve the supplier's reorganization plan before it can proceed.
FREE PRESS STAFF AND NEWS SERVICES
Visteon Corp. has permission to eliminate health care benefits for most of its retirees, a bankruptcy judge ruled Thursday.
The cuts to company-paid medical, prescription and life insurance coverage will affect 6,550 current and future retirees as well as their spouses and dependents.
About 110 employees, whose benefits are covered under a bargaining agreement, will be exempt from the cuts.
Visteon said it would save $31 million this year and a total of $310 million by cutting retiree health care benefits.
Van Buren Township-based Visteon, a parts supplier that spun off from Ford Motor Co. in 2000, is making the cuts as part of its plans to emerge from Chapter 11 bankruptcy protection.
The supplier, which makes stereo systems, automotive lighting and heating and cooling systems, employs 30,000 people.
The company filed for bankruptcy in May and plans to submit its reorganization plan by Dec. 17.
The proposal will likely include giving Visteon's lenders the "great majority" of the company's equity once it exits bankruptcy.
One of the issues that the company still must negotiate is its pension obligations.
In court documents filed Wednesday, Visteon said that it has not determined whether it would hand over its pension plans to the federal government's pension insurance agency, the Pension Benefit Guaranty Corp.
The agency, which took on several supplier pensions this year, including those of Delphi's salaried retirees, would cap annual payments to retirees.
The question of pensions has been part of Visteon's discussions with its lenders, who must approve the supplier's reorganization plan before it can proceed.