Ford to take $1.6 billion Visteon charge
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Manufacturing News, Source : TheManufacturer.com
Published : 22 Dec 2003 19:18
Dearborn, MI-based automaker Ford Motor Co. announced on Monday that it will take a $1.6 billion charge to assume more of the retirement healthcare liability costs of its supplier and former auto parts unit, Dearborn, MI-based Visteon Corp.
Visteon was formerly Ford’s former automotive components subsidiary, and is now Ford’s largest supplier. It was spun off from Ford in 2000, and has undergone frequent financial restructuring since.
A major financial burden for Visteon has been its 20,000 UAW union workers still considered Ford employees under the 2000 spinoff agreement. Ford will transfer many of those workers to Ford plants, allowing Visteon to hire new workers under the terms of a more-favorable UAW contract. The $1.6 billion charge is to alleviate the cost burden of retirement healthcare liability costs for these Ford workers.
As part of the agreement, Ford will receive $100 million from Visteon, as well as lower prices for future auto parts.
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