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March 16, 2010

Visteon will keep pension plans

DAVID SHEPARDSON
Detroit News Washington Bureau

Washington -- Visteon Corp. reversed itself and no longer wants to terminate its pension plans that cover about 23,000 employees and retirees, the company said in a court filing.

The Van Buren Township-based Visteon, the former Ford Motor Co. parts unit, said in December it wanted to transfer three of its pension plans to the Pension Benefit Guaranty Corp. The plan shaved an aggregate shortfall of $544 million. The retirees and employees would have lost more than $100 million in benefits because of federal limits on how much the agency insures.

But in a new plan filed late Monday, Visteon said it would retain its pension plans, "reflecting the company's improved operating and financial performance, as well as recovering industry and market conditions."

PBGC had opposed the effort by Visteon to cancel its pensions.
"Visteon's decision to keep its pension plans is a victory for its workers and retirees," said PBGC Acting Director Vince Snowbarger.

"We will continue our efforts to make sure that a reorganized Visteon emerges financially sound and with its defined benefit pension plans intact."

Visteon will have to make pension payments totaling $320 million through 2015 as a result of the decision to keep the pension plans.
Visteon said the new plan "has the express and unanimous support" of a committee of lenders, and the backing of lenders who hold 74 percent of the company's debt.

Under the new plan, the lenders' $1.63 billion claim will be converted to stock in the new company, which would leave the reorganized company virtually free of debt in the United States.

The secured lenders will receive 85 percent of the stock in the new company once it emerges from bankruptcy. Unsecured lenders will get 9 percent of new stock, about 20 percent of the value of their claims, while trade lenders will get cash worth 50 percent of their claims. But Visteon's shareholders will be wiped out completely.

Visteon also proposes setting up to 10 percent of the company's shares to use for a management incentive program.

Visteon intends to seek approval of its new plan April 13 in U.S. Bankruptcy Court in Delaware. If the disclosure statement is approved, the company will begin approval and seek final confirmation from the court.

Last year, a bankruptcy judge granted approval for Visteon to end health and life insurance benefits for about 6,500 current and future retirees -- a move saving $31 million annually and $310 million in total. But the judge said 110 workers can keep the benefits because of a union contract.

Visteon came under harsh criticism when it proposed awarding up to $80 million in bonuses to executives at the same time it was slashing benefits to retirees. The company dropped that plan and saw a much smaller plan rejected in October.

In February, the bankruptcy court approved up to $35.4 million in bonuses for salaried workers and executives for 2010. The top 12 executives can get up to $5.9 million of the bonus pool.

Visteon, which was spun off by Ford in 2000, has been able to diversify. In 2000, 84 percent of its business came from Ford; today it's just 29 percent -- with Hyundai Motor accounting for 27 percent.

dshepardson@detnews.com">dshepardson@detnews.com (202) 662-8735
http://detnews.com/article/20100316/AUTO01/3160406
http://www.detnews.com/article/20100316/AUTO01/3160406/1148/rss25
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Visteon bankruptcy judge denies request to halt termination of retiree benefits pending appeal

RANDALL CHASE AP Business Writer
9:07 PM MDT, March 16, 2010

WILMINGTON, Del. (AP) — A Delaware bankruptcy judge on Tuesday refused to halt implementation of his order allowing auto parts supplier Visteon Corp. to terminate its retirees' health and life insurance benefits.

An attorney for a union representing some 2,100 people who worked at two Visteon plants in Indiana argued Tuesday that many are facing hardship, and that the order should be stayed pending an appeal to a federal district court judge.

"Literally, lives are in danger," said Susan Jennick, a lawyer representing retirees who worked at Visteon's shuttered plants in Connersville and Bedford, Ind.

Visteon, a top supplier to and a former subsidiary of Ford Motor Co., argued at a hearing last year that the retiree benefits were one of its largest liabilities and posed a significant obstacle to a successful reorganization. The company claimed that the retiree health and life insurance subsidies constituted a liability of about $310 million.

According to court records, benefits for retirees of the two Indiana plants alone cost the company more than $1 million a month.

But Vicki Jo Lady, a maintenance worker employed by Visteon for 33 years, said she and her husband both suffer from chronic illnesses and had to cut back on medication as they faced the loss of their employer-sponsored coverage. Lady, 58, began sobbing as she described the choice of paying for COBRA coverage and making house payments and buying groceries.

"They don't look at me as a person, they look at me as a piece of paper," she told Judge Christopher Sontchi before offering a tearful plea to Visteon officials.

"You're messing with people's lives here," she said. "... You're intelligent people; quit taking from people out of greed."

While acknowledging the decision to terminate benefits will cause hardship for some, Visteon attorney Steve McCormick said the appeal is bound to fail, and that further delays will only cause confusion for retirees exploring other health plans in advance of the April 1 benefits termination.

After a three-hour hearing, which included testimony from Connersville mayor Leonard Urban, Sontchi stood by his earlier ruling, in which he determined that the retirees did not have vested rights in the benefits and that Visteon had the ability to terminate them unilaterally.

"Needless to say, this is an extremely serious issue, the court is well cognizant of that," said a somber Sontchi. He agreed with Visteon that the retirees had not met the standards for him to halt implementation of his ruling, including the likelihood that their appeal would be successful.

"It would be further delay of the inevitable," said Sontchi, who also acknowledged the hardship some retirees will face.

In other developments, Visteon submitted a revised reorganization plan that provides more recovery for unsecured creditors than its original plan did.

Visteon attorney Marc Kieselstein said the company is receptive to bondholders who want to propose an alternative plan that would pay off the term loan lenders and leave the bondholders in control of the company, but that the bondholders have yet to submit a definitive proposal.

"We're waiting for a specific plan," he said.

Attorneys for the bondholders and other unsecured creditors accused the company of filing an amended plan in an effort to gain an advantage over the bondholders group, which says it needs time to complete its due diligence.

A hearing on the company's revised plan is set for April 13.

http://www.kdvr.com/business/sns-ap-us-visteon-bankruptcy,0,4471794.story
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POSTED: MARCH 17, 2010

New bankruptcy plan keeps Visteon pension levels intact

BY JEWEL GOPWANI
FREE PRESS BUSINESS WRITER

As Visteon retirees prepare to lose their health care benefits next month, there is good news for retirees about their pension plans.

Late Monday, Visteon proposed a bankruptcy plan that would enable the Van Buren Township-based supplier to maintain its pension plans covering 21,000 retirees. A previous plan proposed handing the pensions to the federal government, in a move that would have reduced benefits.

The news is one worry off the minds of the company's retirees.

Still, many retirees face sacrifices in Visteon's reorganization. More than 6,500 Visteon retirees, their spouses and dependents are to lose their health insurance on April 1.

The International Union of Electrical Workers is appealing a judge's decision to allow Visteon to terminate the plans.

Deborah Burk is among an estimated 1,700 Visteon retirees who worked at Visteon's now-closed plant in Connersville, Ind.

Burk said she does not expect to have health insurance once her company-paid coverage runs out.

"It's just a hardship, especially when you thought you would be covered for the rest of our life," Burk said.

Next door, Joyce Hatfield chose a new plan that offers reduced coverage and will cost $400 a month.

Hatfield's 57-year-old husband, Randy, who worked for Visteon for 33 years, has started a janitorial business to make ends meet.

"We seem like we're working harder now, and struggling harder now," Hatfield said.

Locally, Debra Smith, a salaried retiree, was told she will lose a medical credit account that Visteon has used to pay for her benefits.

"We had made a plan ... I thought it could be reduced," Smith, 56, of Plymouth, said of the medical credits account. "But I never thought they could actually take it away."

Visteon expects to save $310 million by cutting retiree health benefits.
Meanwhile, the new reorganization plan would hand 85% of the company's new shares to its lenders, and the rest would be offered to unsecured creditors.

A hearing on Visteon's new bankruptcy plan is slated for April 13.

Contact JEWEL GOPWANI: 313-223-4550 or jgopwani@freepress.com
http://www.freep.com/article/20100317/BUSINESS01/3170379/1014/business01
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Visteon retirees asks federal judge to halt termination of health benefits

By RANDALL CHASE , Associated Press
Last update: March 19, 2010 - 12:39 PM

DOVER, Del. - Former workers for auto parts supplier Visteon Corp. are pushing ahead with their fight to preserve their retiree health and life insurance benefits.

The retirees filed an emergency motion Thursday asking a federal judge in Delaware to halt the company's plan to terminate benefits for some 2,100 people who worked at two Visteon plants in Indiana on April 1.

The emergency motion asks that the company specifically not be allowed to terminate benefits for 840 retirees who are not eligible for Medicare until their appeal of a bankruptcy judge's decision is heard.

The bankruptcy judge earlier this week upheld his decision authorizing the company to terminate the benefits. He says Visteon had the legal right to do so and the retirees had little chance of winning their appeal.
http://www.startribune.com/business/88586382.html


Lexus Sales Suffer as Toyota Recall Troubles Continue

Posted Yesterday 01:23 PM by staff

Unless you've been living under a rock for the past couple of months, you've heard that Toyota's suffering a major PR hit as the media continues to cover its various recalls and car crash issues.

Well, the issues may be affecting its Lexus luxury brand.

Lexus has its own reputation of providing good quality cars. In 2009, it was tied with or slightly ahead of BMW in luxury scores. Now add Toyota’s problems with recalls and it seems to have showered down on Lexus. The company’s sales has been increasing an average of 5 percent this year while competitors Mercedes has gone up 24 percent and BMW is up 12 percent.

To offset the loss, Lexus plans to differentiate itself from Toyota. Details are still scarce, though.

Our take? Seems like a little guilt by association.

via egmCarTech
http://blogs.automotive.com/6632972/opinion/lexus-sales-suffer-as-toyota-recall-troubles-continue/index.html



Now you Toyota customers must ask Toyota to replace the defective accelerator petal, but only if you say pretty please Mr. Toyota?

Toyota will replace pedals for unhappy owners

Toyota tells dealers it will replace pedals for owners dissatisfied with fix

Ken Thomas, Associated Press Writer, On Tuesday March 23, 2010, 11:58 am EDT

WASHINGTON (AP) -- Toyota has told dealers it will provide replacement accelerator pedals to owners who are unsatisfied with their repairs under the massive recall following dozens of complaints about the fix.

The Japanese automaker said in a memo obtained Tuesday by The Associated Press that if a customer is unhappy with the feel of the accelerator after the car is repaired, dealers can provide a replacement pedal at no charge.

Dealers have been inserting a piece of metal into the gas pedal mechanism to eliminate friction that was causing the pedal problem on more than 4 million vehicles involved in a January recall.

"A replacement pedal should only be offered to a customer after the reinforcement bar has been installed and the customer has expressed dissatisfaction with the operation and/or feel of the pedal," Toyota said in a memo to dealers, service manager and parts managers.

The memo, dated February 2010, said the pedal replacement "is based upon specific customer request only. Dealers are not to solicit pedal replacement." The memo was first reported by The New York Times.

An AP analysis of government data found that more than 100 owners have complained to the government about problems with sudden acceleration after Toyota dealers fixed their vehicles. Toyota has said it is confident in its repairs and has found no evidence of other problems, such as faulty electronics.

Toyota has recalled more than 8 million vehicles globally over sticky pedals and accelerators that can become entrapped in floor mats, tarnishing the company's safety reputation and leading to government investigations and congressional hearings.

The memo addresses Toyota vehicles that were listed in the January recall. The vehicles include: the 2005-10 Avalon; 2007-10 Camry and Tundra; 2009-10 Corolla, Matrix and RAV4; 2008-10 Sequoia and 2010 Highlander.

"If a customer is not satisfied with the operation and/or the feel of the accelerator pedal after the reinforcement bar has been installed, please assist us by assuring a replacement pedal is provided at no charge to these customers," the company said in the memo.

Officials with Toyota and the National Highway Traffic Safety Administration did not immediately comment.

A group of consumer advocates and engineers who contend Toyota has discounted potential electronic problems in problem vehicles planned to hold a news conference Tuesday on the massive recalls.

Toyota has said it has found no evidence that electrical issues are behind the recalls.

Kristen Tabar, an electronics general manager with Toyota's technical center in Ann Arbor, Mich., said in a video clip posted by the company on Monday that the automaker has eight labs in Japan that it uses to bombard vehicles with electronic interference.

She said Toyota ensures that "every system in the vehicle operates properly under those conditions."

http://finance.yahoo.com/news/Toyota-will-replace-pedals-apf-2558211480.html?x=0
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One More Reason All Retirees Need To Talk Positive About GM!

We need to keep GM with a positive image if we all want to keep our pensions from going to the PBGC. Remember, this could result in a 70% cut in your pension! Just ask the Delphi salaried retirees!!!!


GM Retirees Need To Do Everything They Can To Make Sure GM Thrives!
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