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EXHIBIT 10.3
2003 RELATIONSHIP AGREEMENT
BETWEEN
FORD MOTOR COMPANY
AND
VISTEON CORPORATION
DATED
DECEMBER 19, 2003
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2003 RELATIONSHIP AGREEMENT
THIS 2003 RELATIONSHIP AGREEMENT is dated as of December 19, 2003
(this
"Agreement") between Ford Motor Company, a
Delaware corporation, ("Ford") and
Visteon Corporation, a Delaware corporation
("Visteon").
R E C I T A L S
A. Visteon
and Ford have the following common goals (the "Goals"):
i. That
Visteon achieves the goal of becoming a profitable and
growing business and remains a top-quality supplier to
Ford;
ii. That Ford
achieves competitive price reductions and
achieves fully competitive prices from Visteon, over time,
contributing to its profitable growth;
iii.
That Ford and Visteon work collaboratively to meet the
commitments made in the UAW settlement in September 2003;
and
iv. That Ford
and Visteon will establish a basic framework for
working cooperatively on their ongoing commercial
relationship.
B. To further
the Goals, the Parties have agreed on several
actions that are described in this
Agreement.
C. To monitor
the implementation of each of these actions, the
Parties have agreed to establish a
governance process that is designed to ensure
that the intention of this Agreement, the
Master Transfer Agreements and the
Detailed Agreements is achieved.
The Parties have agreed as follows:
1.
DEFINITIONS
All terms with initial capitalization used herein shall have
the
meanings specified below, except as
otherwise specifically stated.
"AFFILIATE" means any Person directly or
indirectly Controlling, Controlled by,
or under common Control with, such Person.
For purposes of this definition, the
terms Control, Controlling, and Controlled
mean having the right to elect a
majority of the board of directors or other
comparable body responsible for
management and direction of a Person by
contract, by virtue of share ownership,
or otherwise.
"AGREEMENT" means this 2003 Relationship
Agreement.
"AMENDED AND RESTATED EMPLOYEE TRANSITION
AGREEMENT" means that certain Amended
and Restated Employee Transition Agreement
dated as of the date hereof between
the Parties.
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"AMENDED AND RESTATED HOURLY EMPLOYEE
ASSIGNMENT AGREEMENT" means that certain
Amended and Restated Hourly Employee
Assignment Agreement dated as of the date
hereof between the Parties.
"CHESTERFIELD AGREEMENTS" means the
Chesterfield Transition and Stewardship
Agreement dated as of April 1, 2003 among
Johnson Controls, Inc. and the Parties
and the related agreements referenced
therein.
"CLONE AND GO AGREEMENT" means that certain
Clone and Go Cost Sharing Agreement
dated as of the date hereof between the
Parties.
"DETAILED AGREEMENTS" means the Purchase
and Supply Agreement, the Amended and
Restated Hourly Employee Assignment
Agreement, the Amended and Restated Employee
Transition Agreement, the Hourly Employee
Conversion Agreement, the Ford/Visteon
Level 4 Support Amendment and the Clone and
Go Agreement.
"HOURLY EMPLOYEE CONVERSION AGREEMENT"
means that certain Hourly Employee
Conversion Agreement dated as of the date
hereof between the Parties.
"FORD" means Ford Motor Company, a Delaware
corporation.
"FORD/VISTEON LEVEL 4 SUPPORT AMENDMENT"
means that certain amendment to the (1)
Software and Information Technology License
Agreement, effective September 2,
2003 among the Parties and Ford Global
Technologies, LLC and (2) Information
Technology Services Agreement, effective
June 27, 2000 between the Parties.
"MASTER AGREEMENT" means the collective
bargaining agreement and all supplements
thereto between Ford and the UAW dated
September 15, 2003.
"MASTER TRANSFER AGREEMENTS" means the
following agreements between the Parties:
Master Transfer Agreement dated March 30,
2000, Master Separation Agreement
dated June 1, 2000, the Information
Technology Services Agreement dated as of
June 27, 2000, the Software and Information
Technology License Agreement
effective September 2, 2003, and the
Relationship Agreement dated January 1,
2000 between the Automotive Consumer
Services Group (now Ford Customer Services
Division) of Ford and Visteon.
"NEW VISTEON CBA AND SUPPLEMENT" means the
new collective bargaining agreement
and supplement under negotiation between
the UAW and Visteon which negotiation
is expected to be completed by March 5,
2004.
"OPEB LIABILITY" has the meaning specified
in Section 3.4.
"PARTY" or "PARTIES" refers to Ford or
Visteon individually or collectively.
"PERSON" means an individual, a
partnership, a corporation, a limited liability
company, an association, a joint stock
company, a trust, a joint venture, an
unincorporated organization or a
governmental entity or any department, agency
or political subdivision thereof.
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"PURCHASE AND SUPPLY AGREEMENT" means the
Purchase and Supply Agreement dated as
of the date hereof between Ford and
Visteon.
"UAW" means the International Union, United
Automobile, Aerospace and
Agricultural Implement Workers of
America.
"UTICA AGREEMENT" means the Utica Agreement
dated as of the date hereof between
Visteon and Ford that relates to the
purchase and supply of products produced by
Visteon at its Utica Trim Plant.
"VISTEON" means Visteon Corporation, a
Delaware corporation.
2.
PURCHASE AND SUPPLY
2.1 Pursuant
to the Purchase and Supply Agreement, (a) Ford has agreed to
terms and conditions under which Ford will source components
and
systems and services to Visteon in North America, including
payment
terms as described in Section 4.1 hereof, investment sharing
and
pricing on certain business that takes into consideration labor
cost
differential issues; and (b) Visteon has agreed to terms and
conditions
related to components and systems and services sourced to
Visteon,
including productivity price reductions, design changes,
competitive
price gap closure, and capital investments. The Purchase and
Supply
Agreement also includes incentives designed to reduce the number
of
Ford hourly employees assigned to Visteon. The terms and
conditions
agreed by the Parties in the Purchase and Supply Agreement are
designed
to assist the Parties in reaching the Goals and shall govern
with
respect to these issues.
2.2 The
Parties will enter into joint operating agreements with respect
to
various commodities that will include protocols with respect to
engineering, design, and testing (ED&T) rates, component
mark-ups and
related terms, and general requirements relating to Visteon's
support
of Ford vehicle and component programs. The Parties will use good
faith
efforts to finalize these joint operating agreements by March 31,
2004.
3.
EMPLOYEE MATTERS
3.1 The
Parties and the UAW have agreed that, in addition to the New
Visteon CBA and Supplement, Visteon will use its best efforts
to
negotiate with the UAW for the implementation of operating
practices at
the local level that are competitive with the U.S. automotive
component
and truck component industry at Visteon's facilities whose
hourly
employees are represented by the UAW under the Master Agreement.
Upon
and after the effective date of the New Visteon CBA and
Supplement,
persons who are hired by Visteon as hourly employees at
applicable
Visteon facilities will be solely Visteon employees and subject to
the
New Visteon CBA and Supplement. The Parties and the UAW also
have
agreed that certain active hourly employees of Visteon who are
UAW-represented will become hourly employees of Ford as of December
22,
2003 under the conditions of the Hourly Employee Conversion
Agreement.
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3.2 The
Parties also have agreed to make certain amendments to the
Employee
Transition Agreement dated as of April 1, 2000 between the
Parties.
Such amendments are reflected in the Amended and Restated
Employee
Transition Agreement.
3.3 The
Parties also have agreed to make certain amendments to the
Hourly
Employee Assignment Agreement dated as of April 1, 2000 between
the
Parties. Such amendments are reflected in the Amended and
Restated
Hourly Employee Assignment Agreement.
3.4 The
Amended and Restated Hourly Employee Assignment Agreement
provides
that at December 31, 2003 Ford will bear a significant portion of
the
OPEB SFAS 106 balance sheet liability (the "OPEB Liability")
related to
pre-separation service of Ford hourly employees assigned to work
at
Visteon.
3.5 The time
period for pre-funding Visteon's post-separation OPEB
liability to Ford hourly employees assigned to work at Visteon has
been
extended from 2020 to December 31, 2049. The Amended and
Restated
Hourly Employee Assignment Agreement contains the specifics of
the
foregoing agreement.
3.6 Visteon
will transfer assets and obligations relating to the pensions
and other benefits for those hourly employees of Visteon who
become
hourly employees of Ford as of December 22, 2003. The Hourly
Employee
Conversion Agreement contains the specifics of the foregoing
agreement.
3.7 Visteon
will reimburse Ford for the amount of profit sharing paid by
Ford to its hourly employees who are assigned to work at Visteon up
to
a maximum amount. The Amended and Restated Hourly Employee
Assignment
Agreement contains the specifics of the foregoing agreement.
3.8 The
Parties intend that over time there will be no Ford employees
working at Visteon plants and the Parties will cooperate to
facilitate
this goal. At present conditions, Ford has identified a need
for
incremental hourly employees to meet its operating requirements for
the
2004-2007 period. It is intended that flowing Ford hourly
employees
from Visteon to Ford (subject to the Master Agreement), and
replacing
them at Visteon as required with Visteon hourly employees will
assist
in meeting this requirement. Subject to the requirements of the
Master
Agreement, the Parties intend for no more Ford hourly employees to
be
assigned from Ford to Visteon.
4. OTHER MATTERS
4.1 Ford has
agreed to change the payment terms for certain payables to
Visteon in order to facilitate Visteon's near-term investment in
the
UAW plants. The Purchase and Supply Agreement contains the
specifics of
the foregoing agreement.
4.2 Ford and
Visteon have agreed to productivity price reductions due from
Visteon for calendar year 2003 in lieu of any additional 2003
productivity price reductions; provided that this settlement does
not
include productivity commitments that have already been
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separately agreed by the Parties. The Purchase and Supply
Agreement
contains the specifics of the foregoing agreement.
5. IT
SEPARATION
5.1 The
Parties have agreed to a process and cost-sharing for the
creation
of a separate IT environment for Visteon through the cloning of
Ford's
IT systems and other actions. The Clone and Go Agreement contains
the
specifics of the foregoing agreement.
5.2 The
Parties have entered into the Ford/Visteon Level 4 Support
Amendment whereby Ford agrees to provide limited Level 4
information
technology support services to Visteon, and Visteon agrees to pay
for
such services in connection with the creation of a
