Ford Motor Company is facing legal action over the pensions rights of employees who transferred to car parts company Visteon UK, which later went into administration.
Trade union Unite has warned Ford about legal action for providing ‘misleading’ advice to employees who subsequently lost their jobs and pensions when Visteon UK collapsed.
In a letter to Ford, Unite’s lawyers are seeking compensation from the company for the employees who transferred to Visteon UK in 2000. Unite believes the information that Ford provided to these employees to help them to decide whether or not to transfer their accrued pensions benefits was misleading.
Around 3,000 employees were told they could lose as much as 45% of their pension entitlements when Visteon UK went into administration in 2009.
Roger Maddison, Unite’s national officer, said: “Hundreds of workers, many of them close to retirement, were sacked at a minute’s notice and lost their pensions. We believe Ford misled many of these workers leading them to believe their pensions were safe with Visteon.
“Ford failed to clearly set out the risks associated with transferring the assets staff had built up with Ford – now many of these workers face vastly reduced pensions.
“The workers fight for justice won the moral argument and succeeded in getting vastly improved redundancy terms. Now the fight for pensions justice begins.”
In a statement, Ford said: “ Ford met or exceeded its obligations under the 2000 agreement when Visteon became fully independent. The agreement covered the transfer of employees to Visteon UK and their pensions into the Visteon fund.
“The situation for former Visteon UK employees is unfortunate but the responsibility for administering and funding their terms and conditions was Visteon’s, including managing its pension fund. Ford’s obligations to its former employees were fully discharged and Ford believes there is no basis for resuming liability for benefits transferred to Visteon.
“Since 2000, Visteon has operated as an independent company supplying parts to Ford. During this period, Ford has taken a number of actions to support Visteon and to assist Visteon in its efforts to achieve long term viability. These included enabling 560 Visteon employees to return to Ford and providing Visteon with ongoing and new Ford business.
“Despite this Ford assistance, sustained losses meant that Visteon Corporation took the decision to put Visteon UK into administration in 2009. The impact of this for former employees and retirees is very regrettable; however, the contractual responsibility is with the trustees of Visteon UK’s pension fund and the administrator.
“Ford has stated it will not provide further assistance to affected parties. This position was confirmed at a meeting on January 22 between senior Ford executives, representatives of the Unite union and ex-Visteon employees.”
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