The United Auto Workers union Monday said its members had approved Ford Motor Co.'s (F) more than $1 billion plan to bail out auto parts maker Visteon Corp. (VC), clearing the way for it to unload unprofitable U.S. plants and 17,400 highly paid employees.
The restructuring plan, which was announced in May, also allows Ford to buy out about 5,000 UAW (search) workers to reduce costs at the plants.
Visteon and Ford, its former parent, have agreed to restructure the ailing parts maker into a much smaller and consistently profitable business by eliminating high wage positions and unprofitable parts lines.
Nearly 90 percent of UAW workers at Visteon's 15 U.S. plants ratified the bailout deal, in a vote that began last Tuesday and ended on Sunday, the UAW said.
Union leaders had earlier voiced their support for the deal, which came against the backdrop of a mounting financial crisis at Visteon.
Ford spun off Visteon in 2000, but has not severed all ties to Visteon, which had a net loss of $1.5 billion in 2004 and has never made consistent profits.
The No. 2 U.S. automaker has warned it would have significantly lower overall profits this year, and that its core automotive operations may not be profitable.
Since the spinoff, Visteon has leased UAW workers from Ford to operate its plants. The proposal ends the lease arrangement and relieves Visteon of any remaining liability in terms of post-retirement health care and life insurance benefit obligations for former assigned employees and retirees and certain salaried retirees.
"No one is left behind by this restructuring plan," UAW Vice President Gerald Bantom said in a statement.
"Not one UAW-represented worker at Visteon will face a reduction in wages and benefits," he said.
Ford will continue to pay the workers and assume all costs related to the workers' compensation, according to the terms of the bailout agreement.
The companies plan to sign a final agreement, which will cost Ford about $1.15 billion over five years, by Aug. 1 and close the deal by the end of September.
In all, Visteon would return 24 plants to Ford, which plans to put them into a separate Ford-owned entity where most can be buffed up and sold.
The plants that are being transferred to Ford mainly produce powertrain, chassis and glass products. Visteon plans to focus on areas where it is winning new business, including interiors, climate control, electronics and lighting.
The restructuring would cut Visteon to an $11.4 billion annual revenue supplier from $18.7 billion per year, and reduce its dependence on Ford, which accounted for about 70 percent of its 2004 revenue and would account for about half afterward.