Ford and General Motors have objected to a plan by bankrupt supplier Visteon to pay employees up to US$80.1m, saying that they and major auto parts suppliers had eliminated performance incentives for 2009.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Ford, which last month agreed to provide Visteon at least $125m in bankruptcy financing, called Visteon’s incentive programme “entirely too rich, given current market and economic conditions,” according to Reuters, citing documents filed on Friday in federal bankruptcy court in Delaware.
In a separate filing on Friday, GM said it was negotiating a loan to Visteon and that without that funding, the supplier would be unable to pay the bonuses, the report added.
Citing the 14.1% unemployment rate in Michigan, where Visteon is based, Ford questioned the need for the programme saying “job retention should be enough” incentive and that it, GM, Chrysler and various auto parts suppliers had opted not to give bonuses this year.
Reuters said Visteon’s incentive plan included $30.1m in bonuses for its top 100 managers, and individual bonuses ranging from 90% to 375% of an employee’s base salary, according to a court filing.
Visteon said in a June 26 filing it “seeks authority to honour obligations” … to “minimise attrition and ensure maximisation of employee focus and morale.”
Visteon, which was spun off by Ford in 2000, filed for bankruptcy protection last May.
