AMENDED AND RESTATED HOURLY EMPLOYEE ASSIGNMENT AGREEMENT

 

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                                                                    EXHIBIT 10.6

 

            AMENDED AND RESTATED HOURLY EMPLOYEE ASSIGNMENT AGREEMENT

 

                  This Amended and Restated Hourly Employee Assignment Agreement

(the "Agreement") is entered into as of April 1, 2000, and amended and restated

as of December 19, 2003 by and among Visteon Corporation, a corporation

organized under the laws of the state of Delaware, ("Visteon") and Ford Motor

Company, a corporation organized under the laws of the state of Delaware,

("Ford"). Ford and Visteon are referred to herein individually as a "Party" and

collectively as the "Parties".

 

                                    RECITALS

 

         A.        As of April 1, 2000, Ford employed directly approximately

23,580 U.S. hourly employees ("Ford Hourly Employees") who were engaged in the

business of manufacturing and assembling automotive parts and services then

being conducted under the name of Visteon Automotive Systems, an enterprise of

Ford Motor Company, including those activities conducted by its subsidiaries and

affiliates (the "Business");

 

         B.        The Ford Hourly Employees were and still are represented by

the International Union, United Automobile, Aerospace and Agricultural Implement

Workers of America, UAW and its affiliated Locals 228, 400, 600, 723, 737, 845,

848, 849, 892, 898, 1111, 1216 and 1895 (collectively, "UAW") and are covered

under the terms and conditions of the Ford-UAW Collective Bargaining Agreement

dated as of September 15,2003 between Ford and the UAW and various local

agreements by and between Ford and UAW ("Ford-UAW CBA"). For purposes of this

Agreement, the Ford Hourly Employees do not include the hourly employees of

subsidiaries or affiliates of Ford which are included in the Business.

 

         C.        Pursuant to a Master Transfer Agreement dated as of April 1,

2000 by and among Visteon and Ford ("Master Transfer Agreement"), Visteon

acquired the assets and assumed the liabilities of the Business from Ford;

 

         D.        Visteon desired to continue to utilize the services of the

Ford Hourly Employees for its Business;

 

         E.        Ford desired to assign its Ford Hourly Employees to Visteon

for the purpose of enabling Visteon to conduct the Business;

 

         F.        Visteon became an entity independent of Ford as of June

29, 2000; and

 

         G.        The Parties desire to amend and restate this Agreement in its

entirety as provided below, effective as of the date first above written;

 

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                  NOW, THEREFORE, in consideration of the premises and mutual

promises herein made, and for other good and valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

         1.        Term. The term of this Agreement shall commence on June 29,

2000 such date being referred to hereafter as the Effective Date, and shall

terminate at the earlier to occur of (a) the termination of employment of all of

the Ford Assigned Employees, as defined in Paragraph 2 below, or (b) the

agreement of the Parties to terminate. The term shall be known as the "Assigned

Period." Nothing herein contained shall be construed to imply that Visteon's

obligations to hourly employees represented by the UAW and hired by Visteon

after the Effective Date ("Visteon Hourly Employees") extend beyond the Mirror

Period, as defined in Paragraph 13.

 

         2.        Purchased Services. During the Assigned Period, Ford shall

supply Visteon with those Ford Assigned Employees who are assigned to the

Business as of the Effective Date, including any inactive employees (the

"Initial Ford Assigned Employees"). On the Effective Date, Ford shall provide to

Visteon a preliminary list of the Initial Ford Assigned Employees as of the

Effective Date, together with their base hourly wage rate, Ford service date,

job classification, location code, social security number, and the reason for

any absence of an inactive employee and the date any leave expires. Ford shall

finalize the list of Initial Ford Assigned Employees as of the Effective Date no

later than thirty (30) days after the Effective Date, subject to Visteon review.

Ford shall update such list at least monthly for employee quits, retirements,

transfers from Ford facilities to Visteon's facilities, transfers from Visteon's

facilities to Ford facilities or transfers between hourly and salaried status at

Visteon, in connection with the invoice procedure specified in Section 8. The

Initial Ford Assigned Employees and any replacement employees under the process

described above, shall be known for purposes of this Agreement as the "Ford

Assigned Employees." Ford Assigned Employees and all other hourly employees

employed by Ford and covered by the Ford-UAW CBA shall retain their transfer

rights under the Ford-UAW CBA.

 

         3.        Employer Definition. During the Assigned Period, Ford shall

retain responsibility for all payments and benefits due to the Ford Assigned

Employees in connection with the work relating to the Business, including but

not limited to

 

           (i)     the payment of Ford Assigned Employees' base hourly wage or

                  other components of pay as required under the Ford-UAW CBA now

                  in existence or as modified hereafter (less any applicable

                  withholding or other taxes or any amounts deducted from such

                  wages pursuant to normal payroll practices of Ford);

 

           (ii)    the provision of all other employee benefits generally

                  provided by Ford to other hourly employees of Ford covered by

                  the Ford-UAW CBA;

 

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           (iii)   payment of all federal, state, or local taxes withheld or

                  otherwise required to be paid with respect thereto; and

 

           (iv)    the liability for statutory benefits, including workers'

                  compensation, payable to employees.

 

         4.        Management of Employees. While Ford will retain legal

responsibility for administering the terms of the Ford-UAW CBA with respect to

the Ford Assigned Employees, Visteon, as Ford's agent, will have full and

complete authority to exercise day to day supervision over the Ford Assigned

Employees, including assigning work and evaluating, supervising, disciplining

and discharging such employees in accordance with the terms of the Ford-UAW CBA.

If any of those decisions are challenged by a Ford Assigned Employee through a

grievance procedure, in judicial proceedings, or in any other forum, Visteon

will have the sole responsibility for determining how those challenges should be

handled and resolved (including but not limited to the sole authority for making

a decision whether to settle or defend the challenged matter), provided,

however, that Visteon shall comply with any decision rendered by an umpire,

arbitrator, officer of a state administrative agency or judge of any court of

competent jurisdiction with respect to such matter, subject to Visteon's right

of appeal. Notwithstanding the provision set forth above, Visteon will advise

Ford of any major issues that arise under the Ford-UAW CBA, or other major

employment related matters affecting or potentially affecting UAW hourly

represented Ford employees, or matters that could materially impact the Ford-UAW

relationship. If Visteon advises Ford of any such issue or matter, or if such

issue or matter otherwise comes to the attention of Ford and Ford in its sole

judgment considers the issue or matter to fit the criteria above, Ford will

notify Visteon that Ford desires to participate in the resolution of such issue

or matter. As soon as practical after such notice is given, Visteon and Ford

will meet to discuss the issue or matter through the Governance Council

described in Section 16 and determine the appropriate course of action for

handling or resolving the issue or matter. If a common approach cannot be agreed

and Ford decides to pursue its own resolution of the issue or matter, then Ford

shall relieve Visteon of its role as agent of Ford with respect to such issue or

matter and Ford shall pursue the issue or matter in Ford's sole discretion.

Visteon shall provide Ford on a weekly basis a summary of the hours of service

rendered by each of the Ford Assigned Employees during the preceding week. In

addition, Visteon shall provide Ford with such information or documents as Ford

may reasonably request with respect to Ford Assigned Employees. Visteon will

share any such information with Ford (other than non-job related personal care

received by the Ford Assigned Employees unless related to a legitimate business

interest of Ford) regardless of any claim of privilege or confidentiality

because Ford is an employer of the Ford Assigned Employees.

 

         5.         Payroll and Related Services. During the Assigned Period, Ford

shall provide payroll processing services for the Ford Assigned Employees

including, but not limited to, the following: weekly payroll, quarterly and

annual payroll tax deductions and filings, including deductions and payments for

income and Social Security tax requirements under local, state and federal laws;

personnel record maintenance,

 

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authorized income withholding orders, insurance or other withholdings; employee

verification; retirement plan processing and annual W-2 forms; and reporting of

hours by Visteon location for Visteon to administer the Visteon local training

funds.

 

         6.        Employee Benefit Plans.

 

         6.1        Identification of Plans. During the Assigned Period, Ford

         shall cover the Ford Assigned Employees under the same employee benefit

         and fringe benefit plans and arrangements generally offered to other

         hourly represented UAW employees of Ford, at the same time, and the

         Ford Assigned Employees shall be ineligible to participate in any

         employee benefit plan or fringe benefit program sponsored by Visteon.

         Ford reserves the right to modify, terminate or suspend any plan

         applicable to any Ford Assigned Employee, subject to the Foird-UAW CBA.

 

         6.2       Administration of Plans. During the Assigned Period, Ford or

         its designee shall maintain, administer and manage all employee benefit

          and fringe benefit plans and arrangements offered to the Ford Assigned

         Employees.

 

         7.        Fees. Unless otherwise specifically provided herein, Ford

shall be reimbursed monthly for the direct wage and benefit costs for the Ford

Assigned Employees, except with respect to reimbursement for item (iii) below

with respect to Retiree Health Care and Retiree Life Insurance, in which case

any such reimbursement shall be made directly to the applicable benefit plan.

For purposes of this Section 7, "direct wage and benefit costs" for which

reimbursement is required shall include:

 

           (i)     The weekly gross wage, and any other type of compensation such

                  as Christmas bonus, moving allowance, and any other cash

                   compensation not included in the Standard Monthly Group Fringe

                  cost referred to in (ii) below, except with respect to profit

                  share, see item (viii) below, payable by Ford to each Ford

                  Assigned Employee for work performed during the Assigned

                  Period;

 

           (ii)    A per-employee Standard Monthly Group Fringe cost as published

                  from time to time by Ford in the PF-4 (U.S. Labor Assumptions)

                  less the accrual rates for Retirement Plans-Pensions, Retiree

                  Health Care, and Retiree Life Insurance;

 

           (iii)   Payments for Retirement Plans-Pensions, Retiree Health Care

                  and Retiree Life Insurance related to the Ford Assigned

                  Employees, according to the methodology set forth in

                  Attachment A hereto;

 

           (iv)    Expenses incurred by Ford with respect to each Ford Assigned

                  Employee that are not included in (i) through (iii) above and

                  arises as a result of such employee's work for the Business,

                  such as reserves for any, workers' compensation claims arising

                  out of any work accident while

 

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                  the Ford Assigned Employee was performing work for the

                  Business, regardless of when the claim occurred and disability

                  claims with respect to each Ford Assigned Employee to the

                  extent such claims are not covered by insurance. Visteon will

                  assume responsibility as Ford's agent, for accruing and

                  administering the local training funds pursuant to the

                  Ford-UAW CBA. In the event Ford incurs expense for local

                  training funds relating to the Business, Visteon shall

                  reimburse Ford for such expense;

 

           (v)     Reasonable and necessary travel and business related expenses

                  related to Ford Assigned Employees incurred by Ford on behalf

                  of the Business and paid or reimbursed to such employee by

                  Ford as authorized by Ford's standard travel and business

                  expense reimbursement policy;

 

           (vi)    All assessments, premiums or other taxes incurred and paid by

                  Ford with respect to the Ford Assigned Employees not otherwise

                  paid under section (i) through (v) above, including the annual

                  Michigan Single Business Tax cost to Ford resulting from the

                  assignment of the Ford Assigned Employees to Visteon under

                  this Agreement;

 

           (vii)   Direct out-of-pocket incremental costs incurred by Ford in the

                  establishment and administration of benefit programs

                  applicable to Ford Assigned Employees including, but not

                  limited to, legal fees, record keeping, actuarial, and

                   accounting fees not otherwise payable from the Ford-UAW

                  Retirement Plan trust or the Tax Efficient Savings Plan for

                  Hourly Employees; and

 

           (viii) For each of calendar years 2000 through 2003, annual profit

                  share payable by Ford to each Ford Assigned Employee,

                  provided, however, that any aggregate profit share

                  reimbursement shall be limited to the lesser of (A) $50

                  million, or (B) the aggregate actual profit share payable for

                  such year with respect to the Ford Assigned Employees. For

                  each calendar year commencing on or after January 1,2004 until

                  the termination of this Agreement, annual profit share payable

                  to each Ford Assigned Employee determined by employee count on

                  December 31 provided, however, that any per employee profit

                  share reimbursement shall be limited to the lesser of (A)

                  $2,040 (the "Profit Share Cap") or (B) the actual profit share

                  payable for such year with respect to such employee. The

                  Profit Share Cap excludes any employer payroll taxes payable

                   with respect to the payment and Visteon shall remain

                  responsible for reimbursing Ford for such taxes as provided in

                  (vi) above. In the event that Ford is required to pay a profit

                  share based on an Alternative Profit Sharing Calculation

                  pursuant to any current letter of understanding with the UAW,

                  the Profit Share Cap will apply only to the portion of the

                  profit share payment attributable to Ford's profits. The

 

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                     portion of the profit share payment attributable to

                     Visteon's profits will not be subject to the Profit Share

                     Cap.

 

          8.        Payment. Within fifteen (15) days after the end of each

calendar month during the Assigned Period, Ford shall render an invoice to

Visteon in such form and containing such detail as Visteon shall reasonably

require, for direct wage and benefit costs which Ford has incurred with respect

to the Ford Assigned Employees consistent with the Ford-UAW CBA and which were

not previously invoiced. In rendering such reports, Ford will not be required to

undertake any modifications to its information systems in order to render the

detail requested by Visteon. Unless some other form of payment is agreed between

Visteon and Ford, Visteon shall pay Ford this amount within ten (10) business

days of receipt of the invoice by wire transfer into a Ford designated account.

Visteon shall have a right to audit the invoices and related records of Ford

upon reasonable notice during normal business hours, at a place mutually agreed

by the Parties. To the extent the Parties agree the payment should be adjusted

as a result of such audit, any overpayments will be applied to the next

payment(s) due from Visteon and any underpayments will be added to the next

invoice issued by Ford.

 

         9.        Workers' Compensation and Unemployment Insurance. Ford shall

continue to provide Workers' Compensation and Unemployment Compensation coverage

for the Ford Assigned Employees at all times during the term of this Agreement.

 

         10.       Work Environment.

 

         10.1      Compliance With All Health and Safety Laws. Visteon shall

         maintain its facilities at its sole cost and expense so as to provide a

         work environment in conformance with legal requirements.

 

         10.2      Compliance with Employment Laws. The Parties shall comply with

         all applicable national, federal, state and local employment laws,

         including, but not limited to, wage and hour, overtime, discrimination

         laws, and/or local employment ordinances.

 

         11.       Noninterference. In the event that Visteon desires to hire a

Ford Assigned Employee to become a Visteon Hourly Employee or a Visteon salaried

employee, Ford shall not interfere or restrict such employee from accepting any

Visteon offer of employment.

 

         12.       Assumption of Liability. As of the Effective Date, Visteon

will assume liability and responsibility for all pending employment claims with

respect to the Ford Assigned Employees that relate to the Business, provided,

however, that Visteon shall not assume any obligation or liability of Ford with

respect to the following litigation: Michael Jones et al v. Ford Motor Company

filed on June 9,1993 in U.S. District Court, District of Minnesota, regarding

discrimination allegations. With respect to those claims

 

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assumed, Visteon will have sole responsibility for deciding how to defend the

claims (e.g. whether to settle or litigate).

 

         13.       Visteon Role in Ford-UAW Bargaining. Pursuant to the terms of

a Plant Closing and Sale Moratorium letter dated October 9,1999 by and between

Ford and the UAW, the parties agreed that Ford would be permitted to spin-off,

sell or otherwise transfer the Business pursuant to certain conditions including

that (i) Visteon would agree to adopt a collective bargaining agreement for the

Visteon Hourly Employees that would mirror the Ford-UAW CBA for the 1999-2003

contract period and for the next two contract periods ("Restricted Period") and

(ii) in accordance with the Visteon-UAW CBA, Visteon Hourly Employees hired

during the Restricted Period are to be provided with wages, benefits and other

terms and conditions of employment by Visteon which are a mirror of the

successive Ford-UAW CBA's for the duration of their employment with and

retirement from Visteon ("Continuation Period") (the Restricted Period and the

Continuation Period to be known collectively as the "Mirror Period"). For a

period at least equal to the Mirror Period, Ford will include Visteon in

negotiations planning and strategy development and will consult in good faith

with Visteon concerning the terms of any CBA applicable to Ford Assigned

Employees before entering into such CBA. Nothing in this Agreement shall be

construed to preclude Visteon and the UAW or any other union from negotiating

different terms and conditions of employment for the Visteon Hourly Employees

which are mutually satisfactory to those parties.

 

         Notwithstanding the above, pursuant to the terms of a Memorandum of

Understanding between Visteon, Ford and the UAW effective September 15, 2003

(the "Memorandum"), the parties thereto agreed that Visteon would adopt a CBA

which mirrors in all respect, the 2003-2007 UAW-Ford National Agreement ("New

UAW/Visteon CBA"). It was also agreed that the UAW and Visteon would meet within

90 days of the ratification of the 2003-2007 UAW-Ford National Agreement, and

within 90 days of the date the meeting commences, negotiate towards a supplement

to the New UAW/Visteon CBA (the "Supplement") consistent with the terms

described in the Memorandum. Accordingly, commencing on the effective date of

the Supplement, Ford will include Visteon in negotiations planning and strategy

development and will consult in good faith with Visteon concerning the terms of

any CBA applicable to Ford Assigned Employees before entering into such CBA

until the termination of the Restricted Period. To the extent Ford Assigned

Employees continue to be assigned after the Restricted Period, the Parties shall

meet prior to the commencement of bargaining to discuss Visteon's appropriate

role in relation to the number of Ford Assigned Employees. Pursuant to the

Memorandum, it was agreed that employees hired by Visteon under the terms of the

Visteon CBA adopted June 29, 2000 would be transferred to Ford and become Ford

Hourly Employees subject to assignment back to Visteon under the terms of this

Agreement. Visteon and Ford have entered into an Hourly Employee Conversion

Agreement to effectuate such transfer.

 

         14.       Future Changes. Under the Ford-UAW CBA, the local parties may

agree to local continuous improvement initiatives to improve operational

effectiveness. Ford will support Visteon's efforts to secure appropriate changes

in work rules and practices,

 

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or other local continuous improvement initiatives, to improve operational

effectiveness. Nothing herein contained in this Agreement shall be construed as

to interfere With Visteon's rights as an employer to pursue its own aims in the

collective bargaining process with the UAW with respect to Visteon Hourly

Employees. If Visteon and the UAW agree that Ford Assigned Employees should

become Visteon Hourly Employees subject to the terms of the Visteon-UAW CBA,

Ford shall cooperate in transferring the employment of the Ford Assigned

Employees to Visteon, provided however, that Ford incurs no additional cost with

respect thereto.

 

         15.       Management of Worker's Compensation Claims. The Parties

recognize that because Ford will remain an employer of the Ford Assigned

Employees, Visteon may have limitations on its ability to control and manage

worker's compensation claims relating to the Ford Assigned Employees. Ford and

Visteon will work together to develop and implement a strategy and process for

minimizing and reducing those claims.

 

         16.       Governance Council. Pursuant to the Relationship Agreement,

the Parties agreed to establish a Governance Council. The membership,

objectives, responsibilities and process for the Governance Council are set

forth on Exhibit A to the Relationship Agreement and are incorporated herein by

reference.

 

         17.       Indemnity.

 

         17.1      Visteon Indemnity. Visteon shall indemnify Ford against and

         agrees to hold it harmless from any and all damage, loss, claim,

         liability and expense (including without limitation, reasonable

         attorneys' fees and expense in connection with any action, suit or

         proceeding brought against Ford) incurred or suffered by Ford arising

         out of (i) breach of any agreement made by Visteon hereunder; (ii) any

         claim by Ford Assigned Employees (or their dependents or beneficiaries)

         arising out of or in connection with the operation, administration,

         funding or termination of any of Visteon's employee benefit plans or

         programs, whenever made, including, without limitation, claims made to

         the Pension Benefit Guaranty Corporation ("PBGC"), the Department of

         Labor ("DOL"), or the Internal Revenue Service ("IRS"); or (iii)

         employment claims of Ford Assigned Employees whenever made based on

         conditions or actions arising prior to or during the Assigned Period,

         except as provided in Section 17.2 (iii) below.

 

          17.2      Ford Indemnity. Ford shall indemnify Visteon against and

         agrees to hold it harmless from any and all damage, loss, claim,

         liability and expense (including without limitation, reasonable

         attorneys' fees and expenses in connection with any action, suit or

         proceeding brought against Visteon) incurred or suffered by Visteon

         arising out of (i) breach of any agreement made by Ford hereunder; (ii)

         any claim by Ford Assigned Employees (or their dependents or

         beneficiaries) arising out of or in connection with the operation,

         administration, funding or termination of any of the employee benefit

         plans or programs applicable to the Ford Assigned Employees, whenever

         made, including without limitation, claims

 

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         made to the PBGC, the DOL, or the IRS; or (iii) employment claims of

         the Ford Assigned Employees that arise before or during the Assigned

         Period where the liability, if any, is primarily the result of and

         arising from conduct of a Ford supervisor or manager not employed by

         the Business (as opposed to the actions or inaction of Visteon).

 

         17.3      Procedure for Indemnity. The procedure for indemnification

         under this Section 17 shall be as set forth in Section 7(c) through (j)

         of the Master Transfer Agreement and shall be incorporated herein by

         reference.

 

          18.       Dispute Resolution. If a dispute arises between the Parties

relat