Pension liability looms large over Visteon

Anand, Vineeta
April 2003
Automotive News;4/21/2003, Vol. 77 Issue 6034, p16B
Trade Publication
This article reports that Visteon Corp.'s increasing pension and retiree health-care liabilities could bankrupt the company because of an unusual arrangement with its former parent, Ford Motor Co., more than one-third of the union workers in Visteon plants remain on Ford's payroll and covered by Ford's pension fund.Visteon also must start paying Ford in 2006 for retiree health-care liabilities of those workers, although Visteon has asked Ford to drop or modify that requirement.Visteon and Ford officials declined to discuss how much of Ford's pension shortfall is attributable to Ford workers leased to Visteon.Visteon's 2002 annual financial statements report the present value of its pension liability for those workers at$ 62 million, but some analysts estimate Visteon's hidden liability at$ 1.5 billion of Ford's pension assets and$ 2.3 billion in the automaker's pension liabilities, resulting in a shortfall of$ 800 million. INSET: What's next?.


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