Ford Motor Co (F.N) and General Motors Co (GMGMQ.PK) have objected to a plan by bankrupt auto parts supplier Visteon Corp (VSTN.PK) to pay employees up to $80.1 million in bonuses, saying that they and major auto parts suppliers had eliminated performance incentives for 2009.
Ford, which last month agreed to provide Visteon at least $125 million in bankruptcy financing, called Visteon's incentive program entirely too rich, given current market and economic conditions, according to documents filed 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, Visteon would be unable to pay the bonuses.
Citing the 14.1 percent unemployment rate in Michigan, where Visteon is based, Ford questioned the need for the program 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.
Visteon's incentive plan includes $30.1 million in bonuses for its top 100 managers, and individual bonuses ranging from 90 percent to 375 percent of an employee's base salary, according to a court filing.
Visteon said in a June 26 filing it seeks authority to honor obligations ... to minimize attrition and ensure maximization of employee focus and morale.
Visteon, which was spun off by Ford in 2000, filed for bankruptcy protection in May.
The case is In re: Visteon, U.S. Bankruptcy Court, District of Delaware No. 09-11786.
(Reporting by Phil Wahba; Editing by Phil Berlowitz)