After a two-day hearing, Judge Christopher Sontchi told attorneys Friday he would consider the evidence and arguments. He gave no indication when he would rule.
"I feel that the record is sufficiently complex and the law is sufficiently complex to require the court to thoroughly review the record," said Sontchi, whose ruling could affect some 6,600 retirees and their families, and about 1,000 future retirees.
Visteon has argued that the retiree benefits are one of its largest liabilities and pose a significant obstacle to a successful reorganization. The company claims the retiree health and life insurance subsidies, also known as "other post-employment benefits," constitute a liability of about $310 million and projected cash costs of $31 million this year alone.
"Providing OPEB is a crippling financial and competitive burden to the sponsoring debtors' business," Visteon attorneys wrote in a court filing. "Unless changes are made, the sponsoring debtors cannot continue to provide these discretionary benefits and survive."
Visteon officials assert that the benefit plans contain provisions giving the company the unilateral right to revise or terminate them.
About one-third of the retirees are not yet eligible for Medicare, federal health insurance.'A death sentence'
Attorneys for the United Auto Workers and International Union of Electrical Workers argued that the plans were subject to collective bargaining agreements and the company has no unilateral right to terminate them. Even if Visteon had such a right, they said, it was lost when the company filed for protection under the bankruptcy code, which includes a provision requiring a debtor to continue paying retirement benefits.
"It is, for some, a death sentence," said Susan Jennik, an attorney representing workers who retired from two Visteon plants in Indiana. "Retirees who are receiving cancer treatment or who have heart disease ... are now faced with the termination of lifesaving medical treatment."
Visteon attorney Steve McCormick said the company had gone to great lengths to avoid what he described as a difficult but necessary decision.
He argued that the bankruptcy provision cited by the unions does not apply in Visteon's case, and that all the collective bargaining agreements have expired except one. The existing agreement, which covers workers at a plant in Lansdale, Pa., includes a provision that the benefits plan can be changed or terminated at any time by Visteon, he said.
"Everyone recognizes that this is just truly a miserable deal for some of these people," McCormick acknowledged.
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