Auto supplier Visteon Corp. has agreed to provide severance pay to striking former employees in the United Kingdom, but union representatives have dismissed the offer.
The package — aimed at ending weeks of sit-in strikes at Visteon plants and picketing outside Ford Motor Co. dealerships — included immediate payments equal to 16 weeks of workers' previous pay.
Supplemental payments would have increased the total severance package to the approximate amounts that workers would have received under their most recent contract.
But spokesman Kevin Nolan of the trade union Unite said Visteon's proposed deal was “very vague” and misleading: “What they've offered us is the pay in lieu, which legally they have to do anyway. They said what they would do is set up a fund from the sale of the company's assets, and if there was any money left we would get it.”
A Visteon spokeswoman repudiated the claim, saying that the money for the offer would be allocated from company funds.
On March 31, Visteon placed the three plants that made up its Visteon U.K. wholly owned subsidiary into administration, a form of bankruptcy. Court-appointed administrators from the auditing firm KPMG LLP immediately closed the factories.
The plants originally were part of Dearborn, Mich.-based Ford and were turned over to Visteon in 2000, when Ford spun off the parts operation as an independent company.
Visteon, based in Van Buren Township, Mich., said when it closed the U.K. sites that the facilities had never made money and accounted for £669 million ($991 million) in losses over the past nine years.
Workers at Visteon's plant in Belfast, Northern Ireland, which molded intake manifolds and throttle bodies, responded to its closure with a sit-in strike; ex-employees at the other plants soon followed their lead.
Visteon's Enfield, England, plant formerly molded interior parts including instrument panels and center consoles, while a third plant in Basildon, England, made radiators and other metal parts.
Since the closings, workers and their supporters also have picketed outside Ford U.K. dealerships.
Unite has argued that Visteon and Ford are responsible to the 550 former employees, pointing to a document signed by workers at the time of the 2000 spinoff that states: “Accrued seniority and all existing terms and conditions, in particular pension entitlements, will be transferred to the new employment contracts. For the duration of their employment, terms and conditions will mirror Ford conditions.”
Unite said that means laid-off Visteon workers are entitled to a full redundancy package like Ford's: It's the heart of the dispute.
“We are hopeful of striking a deal, but the onus is firmly on Visteon to bring something to the table,” union spokesman Brian Harris said before the company made its offer.
The disruptions have made it difficult for KPMG representatives to access plants and equipment that could be sold to raise funds for Visteon's debts.
Both Ford and Visteon have maintained that KPMG is now legally responsible for the U.K. plants and its former workers, but in an April 16 news release Visteon said it offered Unite the settlement with additional payments, “in the interest of assisting the former employees.”
Anthony Clark, news editor of Plastics News sister publication Plastics & Rubber Weekly, contributed to this report.