Ford Brings Back Buyouts, Visteon Dumps Pensions on Public

Edward Niedermeyer
by Edward Niedermeyer

It’s been a while since we’ve heard the word “buyout” echoing out of Detroit, as 2008 marked the year in which auto industry employees finally started to be fired like everyone else: without a hefty severance kiss-off. Ford, on the other hand, did not get a shot at free house-cleaning in bankruptcy court, so it’s bringing back buyouts. According to Market Watch, the Blue Oval is offering blue-collar employees a $50,000 lump sum payment and a $25,000 voucher for a new vehicle or another $20,000 lump sum, as well as six months of health insurance coverage. There’s even an extra $40k for workers of “a certain age.” But this being Detroit, employee benefits are either feast or famine. While Ford’s workers are being offered cash for their jobs, the former Ford parts division Visteon announced today that it is seeking to dump pensions for 21,000 retirees in bankruptcy, following Delphi into yet another stealthy yet popular form of indirect automaker bailout.

According to the Detroit News, the pension plans Visteon has asked a bankruptcy judge to drop have a combined shortfall of $544 million, and will result in at least $100m in benefit reductions. The Pension Benefit Guarantee Corporation has not yet approved the benefit dump, nor has Visteon’s bankruptcy judge, but the deal seems likely to go through. Visteon has already been allowed to drop health and life insurance benefits to 6,500 current and future retirees. By assuming these most recently-abandoned pensions, the PBGC would receive a $460 million general unsecured claim and 3.8 percent of Visteon’s new stock in bankruptcy.

But that’s small potatoes for a government safety net that is running a $21 billion deficit for 2008. That includes the assumption of $6.7 billion in Delphi benefits (covering some 70,000 individuals) that were abandoned by the GM spin-off earlier this year. Because both Visteon and Delphi were formerly divisions of Ford and GM respectively and are integral to the viability of their former parents, these pension dumpings are the ugliest, most stealthy elements of 2009’s auto industry bailout. No that you’ll ever see an OEM take responsibility for any of it. Shameful doesn’t even begin to describe it.

The image used in this story is from protests against Visteon UK’s equally shameful bankruptcy

Edward Niedermeyer
Edward Niedermeyer

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  • Accs Accs on Dec 21, 2009

    Can I ask a open ended question... Who would "want" to take a buyout from a automaker.. and actually spend 25g on THEIR product. Also.. so is this what happens when the white collared get their benefits and raises back?

  • Detlump Detlump on Dec 21, 2009

    Don't forget that buyouts are not tax exempt, so take that $50K and subtract taxes, you are around $35K. Tuition at a decent school, not UM, is around $500-700/credit hour. With other living expenses, that is not going to last long. The bailout should be conditional on honoring all employer obligations toward employees, union and non-union. Otherwise, it makes more sense to fold up these companies and just give the bailout money right to the employees. Or just nationalize them, clear out the board, and zero out the shareholders. Why pay out unemployment, at least have the workers do something rather than sit at home.

  • 3-On-The-Tree 2014 Ford F150 Ecoboost 3.5L. By 80,000mi I had to have the rear main oil seal replaced twice. Driver side turbo leaking had to have all hoses replaced. Passenger side turbo had to be completely replaced. Engine timing chain front cover leak had to be replaced. Transmission front pump leak had to be removed and replaced. Ford renewed my faith in Extended warranty’s because luckily I had one and used it to the fullest. Sold that truck on caravan and got me a 2021 Tundra Crewmax 4x4. Not a fan of turbos and I will never own a Ford again much less cars with turbos to include newer Toyotas. And I’m a Toyota guy.
  • Duke Woolworth Weight 4800# as I recall.
  • Kwik_Shift_Pro4X '19 Nissan Frontier @78000 miles has been oil changes ( eng/ diffs/ tranny/ transfer). Still on original brakes and second set of tires.
  • ChristianWimmer I have a 2018 Mercedes A250 with almost 80,000 km on the clock and a vintage ‘89 Mercedes 500SL R129 with almost 300,000 km.The A250 has had zero issues but the yearly servicing costs are typically expensive from this brand - as expected. Basic yearly service costs around 400 Euros whereas a more comprehensive servicing with new brake pads, spark plugs plus TÜV etc. is in the 1000+ Euro region.The 500SL servicing costs were expensive when it was serviced at a Benz dealer, but they won’t touch this classic anymore. I have it serviced by a mechanic from another Benz dealership who also owns an R129 300SL-24 and he’ll do basic maintenance on it for a mere 150 Euros. I only drive the 500SL about 2000 km a year so running costs are low although the fuel costs are insane here. The 500SL has had two previous owners with full service history. It’s been a reliable car according to the records. The roof folding mechanism needs so adjusting and oiling from time to time but that’s normal.
  • Theflyersfan I wonder how many people recalled these after watching EuroCrash. There's someone one street over that has a similar yellow one of these, and you can tell he loves that car. It was just a tough sell - too expensive, way too heavy, zero passenger space, limited cargo bed, but for a chunk of the population, looked awesome. This was always meant to be a one and done car. Hopefully some are still running 20 years from now so we have a "remember when?" moment with them.
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