Ford Sued by Over 1,400 Ex-Workers Over Spinoff Pensions
Ford Motor Co. (F) was sued by more than 1,400 former U.K. workers for making misleading statements about the security of transferring their pensions to Visteon Corp. (VC) during the 2000 spinoff of the auto-parts company.
A U.K. judge ruled the claims, all filed at a London court between January 2011 and March 2012, should be tried together as group litigation, according to an order handed down in December and made public yesterday.
Visteon, spun off from Ford in 2000, filed bankruptcy in 2009 as the auto-parts industry faced slowing vehicle sales and reduced production. The company, based in Van Buren Township, Michigan, ran a 350 million-pound ($553 million) deficit in 2009 on the pension plan that had been transferred from Ford, lawyers for one group of ex-employees said in documents filed at a London court in March.
Anyone “who transferred their accrued entitlements in the Ford Pension Scheme to the underfunded Visteon Scheme was exposing themselves to the risk that they may lose their accrued benefits,” the former employees said in the filing.
Around 30 members of Britain’s Parliament wrote to the House of Commons Work and Pensions Committee chairwoman on Jan. 30 requesting a report into “multinational companies’ duty of care” in relation to pensions, according to the letter seen by Bloomberg, which would require witnesses from Ford and Visteon to attend a public hearing.
“Ford views these claims as totally without merit and it will defend its position vigorously,” Brian Bennett, a U.K. spokesman for Ford, said in an e-mailed statement. “While Ford recognizes the severity of the situation for former Visteon U.K. employees, Visteon became an independent company in 2000 and was responsible for its own business decisions.”
Jonna Christensen, a U.K. spokeswoman for Visteon, declined to comment on the suit. Visteon shares rose by 0.7 percent to $56.68 in New York trading at 12.56 p.m. today.
Unite, Britain’s largest union with some 1.5 million members according to its website, didn’t immediately respond to requests for comment. Unite is now coordinating the litigation for the ex-employees.
If the workers believed their pensions “weren’t safe, there is no way we would’ve accepted” the transfer, said Simon Harding, one of the claimants, in a telephone interview today. “If we hadn’t have accepted the transfer, then I don’t think the spinoff would’ve taken place.”
To contact the reporter on this story: Jeremy Hodges in London at email@example.com
To contact the editor responsible for this story: Anthony Aarons at firstname.lastname@example.org