By Staff Report
Jul. 16, 2009
Visteon Corp. said it will delay efforts to pay as much as $80 million in bonuses while in bankruptcy to key employees, including executive management.
The news came a day before arguments about the bonuses were to be heard in U.S. Bankruptcy Court in Wilmington, Delaware. Several key players in the bankruptcy case, including Ford Motor Co. and General Motors, oppose the plans.
“This is appropriate in light of other motions before the court that are driven by immediate business consideration,” said Jim Fisher, Visteon director of corporate communications.
Fisher said the company prefers a “consensual” plan and will continue to work with constituents to address concerns.
A number of other issues will be heard at Visteon’s hearing Friday, July 17, including motions and to allow General Electric Co. to lease a portion of Visteon’s headquarters campus in suburban Detroit.
Fisher said the company expects the court to hear arguments about the bonus plans at a later date. He added the adjournment of the bonus issue was not caused by the objections the motion drew.
Visteon filed a motion June 29 seeking bankruptcy court approval of a new $30 million bonus plan, called the Key Employee Incentive Program, as well as permission to continue existing long-term and annual bonus plans the company had prior to bankruptcy.
But Ford, GM, the UAW, the U.S. Trustee overseeing Visteon’s Chapter 11 case and the case’s committee of unsecured creditors all filed objections to at least parts of the bonus plans. Ford called the proposed bonuses “entirely too rich given current market and economic conditions.” GM noted that the automaker had not pursued such bonuses in its own Chapter 11 case.
Others objected to the validity of the bonus plans.
U.S. Trustee Roberta DeAngelis said in her objection that the incentive plans were not justified considering the number of companies, including Ford and GM, that have eliminated annual bonuses for 2009; and because Visteon lacks funding to pay for the bonuses and more than 250,000 auto industry employees have lost their jobs in the past 12 months.
It’s unclear if Visteon is planning to revise the bonus programs.
“Our preference is to have a consensual plan, and we plan to work with all our constituents and address as many concerns as we can,” Fisher said. “Ultimately, we will do what’s in the best interest of the company, our customers and stakeholders.”
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