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Visteon ordered to reinstate health care to retirees

August 17, 2010

A judge has ordered Visteon Corp. to reinstate health benefits to thousands of retirees who lost insurance coverage after the auto-parts maker filed for bankruptcy, including 2,100 former workers in Indiana.

U.S. Bankruptcy Judge Christopher S. Sontchi said he will give the company a chance to help him decide how quickly the benefits will be restored to more than 6,000 retirees. The former workers, many of whom held jobs at now-closed Midwest factories, must also be reimbursed for any health-care expenses they incurred since the cuts took place in May, Sontchi said.

“There needs to be no period in which these people are not covered retroactively,” Sontchi said at a hearing Tuesday. Attorneys for Visteon and its unions are scheduled to return to court Tuesday to argue about how quickly the benefits should be restored and whether retirees should be represented by an official committee.

Sontchi’s decision comes after a July appeals court order that benefits for 2,100 former workers in Indiana be restored. Sontchi had ruled in December that the company had the right to cancel the coverage without first negotiating with the union. The Indiana workers are covered by Tuesday’s ruling.

Visteon, based in Van Buren Township, Mich., filed for bankruptcy last year, citing the faltering economy and a slowdown in car sales. The company, which makes parts for vehicle interiors, is a former division of Ford Motor Co.

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