June 30, 2005

The Bells Are Getting Louder!*

Humpday, 3 Promise (AfterLithe), 2005

Visteon will cut retiree benefits:

[ Various forms of emphasis courtesy of the Funny Farm News Burro]

Visteon Corp. is warning thousands of salaried employees that their health care in retirement will be their own responsibility, as the money-losing auto-parts giant becomes the latest large employer to shift the burden of rising costs onto employees.

[-snip-]

Visteon's plan -- which will save the company an undisclosed amount of money -- could open the door to similar measures at rival Delphi Corp. and other big companies, especially in Michigan's auto-parts industry, which is suffering from high prices for raw materials and falling demand from Ford Motor Co. and General Motors Corp.

[-snip-]

Visteon Chairman and Chief Executive Officer Michael Johnston and new President Donald Stebbins are trying to determine how many salaried engineers, sales people and administrators the company will need when sales are about $11 billion a year, instead of the $19 billion or so that has been the norm.

[-snip-]

Visteon's new plan, which will take effect June 1, 2007, will not affect about 1,300 salaried employees who had spent enough years with Ford prior to the spinoff to qualify for retirement benefits. They will retire under Ford's plan.

The other 6,700 U.S.-based salaried employees will have to pay for their own health insurance in retirement, although those who are 45 or older as of Friday will get money in special accounts to help.

Visteon will credit those 45 and older with $250 each month, plus interest, in what it is calling a Retiree Medical Cash Balance Account, which experts say is like a health reimbursement account.

That account will be supplemented upon retirement by a onetime credit worth $70 multiplied by the employee's combined age and years of service.

[-snip-]

We would be very interested in knowing how many of the executroids within the halls of Visteon will be losing their retirement health care. and how much of those money-losing business decisions are being paid for with decreased HaveMore compensation**. Gee, how much were the executroids compensated while losing $3.2 Billion dollars since the company was spun off from Ford five years ago? How would Ford's balance sheet look if this loss leader had still been a part of their empire?

There's a lot more in this article, particularly some interesting paragraphs about the health reimbursement arrangement concept that seems to test amazingly well with executroids who won't have to worry about its' effect on their retirement plans. Funny how that works...

Go read and feed your brain.***

* - Post title inspired by a wondrous Monty Python skit that has us always saying There's nothing an agnostic can't do if he really doesn't know whether he believes in anything or not.

** - decreased HaveMore compensation? - sometimes our optimism surprises even ourselves...

*** - yes, we do have (what slightly resembles a) lawn that we have used Weed and Feed on lately. Why do you ask?

Posted by (: Tom :) at June 30, 2005 11:13 PM