Ford Says It May Take a 'Significant' Charge For Former Ford Visteon Workers - Plus a "Snide's Remark" to Bill from Milton

DETROIT December 17, 2003; Reuters reported that Ford Motor Co. said in a regulatory filing late on Tuesday it could report a "significant non-cash" charge for the fourth quarter if it concludes negotiations with its former unit Visteon Corp.

Ford said conclusion of its negotiations with Visteon to modify its spin-off deal reached in 2000 with its former automotive parts supplier could be imminent.

Under the terms of Visteon's spin-off agreement with Ford, Visteon's hourly United Auto Workers union employees are technically paid by Ford, and enjoy lifetime employment guarantees. They are also paid wages above the rate for workers at many other parts suppliers.

Ford's agreement on a new four-year contract with the UAW reached this fall includes a two-tier wage system for Visteon that would pay new hires less than current employees. It also includes pledges by Ford to provide more work for Visteon to help the struggling parts supplier compete.

Credit Suisse First Boston analyst Chris Ceraso said in a research note on Wednesday that Ford could help Visteon by waiving payments to the automaker to cover retiree health care obligations for Visteon workers. Ford remains Visteon's biggest customer.

"Of course, there are likely to be offsetting agreements that Ford extracts from Visteon in the way of pricing or other concessions, that will make it difficult to gauge the net effect of the negotiations on Ford's valuation," Ceraso said.

Snides Remarks: The concept of a car maker spinning off an important division to make it an independent company that can sell its parts back to the former owner now marked up twice to create a profit is one that I just don't get, especially if the only way the UAW would agree to this "Outsourcing" is if Ford made up the pay and retirement differences in the new company's work force. I guess the long term plan is to wait till those workers retire or die off, and then under the UAW/FORD outsourcing agreement buy the parts for Ford vehicles from a plant that Ford owns in China.

This is another dream and scheme by bean counters...hey Bill get control of your company...as my dearly departed Mom said..."if the big companies keep getting smaller who will be left to buy anything?" Oh by the way Visteon has not been profitable yet.

Peter Pestillo, 65 Chairman, CEO	$ 3.87M	N/A
Michael Johnston, 55 Pres, COO, Director	$ 3.37M	N/A
Daniel Coulson, 59 Interim CFO, Exec. VP	$ 1.18M	N/A
James Orchard, 52 Exec. VP; Pres, North America and Asia	$ 1.58M	N/A
Stacy Fox, 49 Sr. VP, Gen. Counsel, Sec.	N/A	N/A