Visteon asks court for $34.5 million for executive bonuses

Bob Lutz is complaining about the underpaid executives at GM and now, even as it slashes its retirees’ benefits, bankrupt Visteon wants to hand out millions of dollars in bonuses.

Visteon yesterday asked U.S. Bankruptcy Court Judge Christopher Sontchi for up to $34.5 million to pay bonuses to 1,300 employees. Of that money, as much as $5.9 million would be for Visteon’s top 12 executives. The bonuses would be paid out based on how close the company comes to hitting its objectives for 2010.

Unions and the U.S. Trustee for the case have objected to the bonuses. Visteon’s creditor committee originally objected but withdrew their protest after Visteon raised the bar for qualification.

At the same time, Ford’s former parts operation appealed Judge Sontchi’s decision to allow retirees to have representation on the unsecured creditors’ committee or to have a committee of their own that would be a party to the bankruptcy hearings. Citing pension laws, Visteon attorneys said retiree interests should be handled by the federal Pension Benefit Guaranty Corp. (PBGC).

With Sontchi’s approval, Visteon has already terminated the health benefit plans for 6,650 current and future retirees, effective at the end of March. The International Union of Electrical Workers is appealing the decision. Visteon is trying to unload its pension obligations onto the PBGC, a move that could potentially cost Visteon’s current retirees $100 million in benefits.

Judge Sontchi declined to issue a ruling, saying he would take Visteon’s appeal over retirees’ representation under advisement and that he would consider the bonus request.

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