Document:

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                                                                    EXHIBIT 10.6

                      HOURLY EMPLOYEE ASSIGNMENT AGREEMENT

                  This Assignment Agreement (the "Agreement") is entered into as
of the first day of April, 2000, by and among Visteon Corporation, a corporation
organized under the laws of the state of Delaware, with offices at 5500 Auto
Club Drive, Dearborn, Michigan 48126 ("Visteon"), and Ford Motor Company, a
corporation organized under the laws of the state of Delaware, with offices at
The American Road, Dearborn, Michigan 48121 ("Ford"). Ford and Visteon are
referred to herein individually as a "Party" and collectively as the "Parties".

                                    RECITALS

         A. Ford employs directly approximately 23,580 U.S. hourly employees
("Ford Hourly Employees") who are engaged in the business of manufacturing and
assembling automotive parts and services now 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 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, 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 30, 1999 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 even date
herewith by and among Visteon and Ford ("Master Transfer Agreement"), Visteon
will acquire the assets and assume the liabilities of the Business from Ford;

         D. Visteon desires to continue to utilize the services of the Ford
Hourly Employees for its Business; and

         E. Ford desires to assign its Ford Hourly Employees to Visteon for the
purpose of enabling Visteon to conduct the Business in accordance with the terms
set forth below.

                  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:

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         1. Term. The term of this Agreement shall commence on a date to be
agreed by Ford and Visteon, but no later than the date that Ford will distribute
to the holders of its common stock and Class B stock, by means of an exchange
offer and/or a prorata distribution, all of the shares of Visteon common stock
owned by Ford, 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 including rights to placement in Visteon or Ford
facilities.

         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 Joint Advisory Board
described in Section 17 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

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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, 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 Ford-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)     An annual payment 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;

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          (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 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)    Annual profit share payable by Ford to each Ford Assigned
                    Employee, provided, however, that for each of calendar years
                    2000 through 2004, 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.

         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

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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 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

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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.

         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, 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. Business Costs Related to Insufficient Business and/or Business
Restructuring. The Parties recognize that significant business costs relating to
the Ford Assigned Employees will be incurred in the event that Visteon does not
have sufficient work to perform during the term of this Agreement ("Insufficient
Business"). The Parties further recognize that Visteon will seek ways to
restructure and streamline its business to improve competitiveness which may
also result in significant business costs relating to the Ford Assigned
Employees ("Business Restructuring"). Ford and Visteon agree to jointly work
together in good faith through the Joint Advisory Board to attempt to minimize
the business costs to Visteon and Ford in the event of Insufficient Business or
Business Restructuring. Ford shall consider in good faith proposals by Visteon
to minimize the cost impact, for example, considering placements of the Ford
Assigned Employees in Ford hourly open positions without a cost penalty to Ford
or

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accelerating the termination of this Agreement. To the extent that such a
proposal requires agreement by the UAW, Ford and Visteon shall use their
respective best efforts with the UAW to secure such approval. Nothing herein
contained however shall be construed as a Ford commitment to assume liability
for all or any part of such labor costs, or to take any specific action with
respect to any proposal.

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         17. Joint Advisory Board. The Parties recognize that it is in their
mutual interest to establish and maintain cooperative working relationships with
each other not only from the point of view of ongoing reliability of competitive
supply, but also because of the continuing relationship of both Parties with
their employees, particularly those represented by the UAW. It is also
recognized that there will be instances in the future where each Party's labor
policy and negotiations strategy and practice may vary from each other's.
Similarly, the Parties recognize that as Visteon attempts to streamline its
operations, and adjust its workforce, there may be a need to cooperatively deal
with the effect of these efforts on the performance of each Party.

         In order to achieve these objectives, the Parties agree to establish a
Joint Advisory Board for the purpose of assuring cooperative relationships
between the Parties and to be used as the forum to discuss significant issues
that may arise between the Parties as a result of their business relationships
that cannot otherwise be resolved through normal processes. The Advisory Board
will meet regularly and will consist of senior representatives of the labor
relations, purchasing, technology and general business functions of Ford and
Visteon. The Advisory Board will seek mutually beneficial solutions to resolve
significant issues that arise between the Parties in a fair and cooperative
manner and in the interest of securing a positive business relationship.

         18.  Indemnity.

         18.1 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 18.2 (iii) below.

         18.2 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).

         18.3 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.

         19. Dispute Resolution. If a dispute arises between the Parties
relating to this Agreement, the following procedure shall be implemented except
that either Party may seek injunctive relief from a court where appropriate in
order to maintain the status quo while this procedure is being followed:

         19.1 Initial Meeting. The Parties shall hold a meeting promptly,
         attended by persons with decision-making authority regarding the
         dispute, to attempt in good faith to negotiate a resolution of the
         dispute; provided, however, that no such meeting shall be deemed to
         vitiate or reduce the obligations and liabilities of the Parties or be
         deemed a waiver by a party hereto of any remedies to which such Party
         would otherwise be entitled.

         19.2 Mediation. If, within thirty (30) days after such meeting, the
         Parties have not succeeded in negotiating a resolution of the dispute,
         they agree to submit the dispute to mediation in accordance with the
         then-current Model Procedure for Mediation of Business Disputes of the
         Center for Public Resources and to bear equally the costs of the
         mediation. The Parties will jointly appoint a mutually acceptable
         mediator, seeking assistance in such regard from the Center for Public
         Resources if they have been unable to agree upon such appointment
         within twenty (20) days from the conclusion of the negotiation period.

         19.3 Arbitration. The Parties agree to participate in good faith in the
         mediation and negotiations related thereto for a period of thirty (30)
         days. If the Parties are not successful in resolving the dispute
         through the mediation, then the Parties agree to submit the matter to
         binding arbitration in accordance with the Center for Public Resources
         Rules for Non-Administered Arbitration, by a sole arbitrator.

         19.4 Procedure. Mediation or arbitration shall take place in the City
         of Dearborn, Michigan. Equitable remedies shall be available in any
         arbitration. Punitive or exemplary damages shall not be awarded. This
         clause is subject to the Federal Arbitration Act, 9 U.S.C.A. Section 1
         et seq., or comparable legislation in non-U.S. jurisdictions, and
         judgment upon the award rendered by the arbitrator, if any, may be
         entered by any court having jurisdiction thereof.

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         20.  Miscellaneous.

         20.1 Assignment. This Agreement has been executed in consideration of
         the Parties involved and therefore may not be assigned or transferred
         to a third party without the prior written consent of the other Party.
         This Agreement will be binding on the agreed successors to or assignees
         of either Party. In no event will a Party be released from their
         indemnity obligations without the prior written consent of the other
         Party.

         20.2 Entire Agreement, Amendment, Waiver. This Agreement embodies the
         entire agreement of the Parties and supersedes any other agreements or
         understandings between them, whether oral or written, relating to this
         subject matter. In the event of a conflict between this Agreement and
         any other agreement between or among any of the Parties with respect to
         the subject matter hereof, this Agreement shall control. No amendment
         or modification or waiver of a breach of any term or condition of this
         Agreement shall be valid unless in a writing signed by each of the
         Parties. The failure of either Party to enforce, or the delay by either
         of them in enforcing, any of its respective rights under this Agreement
         will not be deemed a continuing waiver or a modification of any rights
         hereunder and either Party may, within the time provided by applicable
         law and consistent with the provisions of this Agreement, commence
         appropriate legal proceedings to enforce any or all of its rights.

         20.3 Notices. Any notice or other communication hereunder must be given
         in writing and either (a) delivered in person, (b) transmitted by
         facsimile transmission or other telecommunications mechanism, (c) sent
         by a nationally recognized overnight courier service (delivery charges
         prepaid) or (d) sent by registered or certified mail (postage prepaid,
         return receipt requested) as follows:

         If to Ford:
                           Ford Motor Company
                           Henry Ford II World Center
                           The American Road
                           Dearborn, Michigan 48121-1899
                                Attention: Secretary
                                Fax: (313) 248-7036

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         If to Visteon:

                          Visteon Corporation
                          Auto Club Drive
                          Dearborn, Michigan 48121-1899
                               Attention: General Counsel
                               Fax: (313) 390-2718

         All notices personally delivered shall be deemed received on the date
         of delivery. Any notice sent via facsimile transmission shall be deemed
         received on date shown on the confirmation advice. Any notice by
         registered or certified mail shall be deemed to have been given on the
         date of receipt or refusal thereof. The date of any notice by overnight
         courier service shall be the date the airbill is signed by the
         recipient. Any Party may change its address for the receipt of notices
         by giving Notice thereof to the other.

         20.4 Partial Invalidity. Any provision of this Agreement which is found
         to be invalid or unenforceable by any court in any jurisdiction will,
         as to that jurisdiction, be ineffective to the extent of such
         invalidity or unenforceability, and the invalidity or unenforceability
         of such provision will not affect the validity or enforceability of the
         remaining provisions hereof.

         20.5 Title and Headings. Titles and headings of Sections and
         Subsections of this Agreement are for convenience only and will not
         affect the construction of any provision of this Agreement.

         20.6 Negotiated Terms. The Parties agree that the terms and conditions
         of this Agreement are the result of negotiations between the Parties
         and that this Agreement will not be construed in favor of or against
         any Party by reason of the extent to which any Party or its
         professional advisors participated in the preparation of this
         Agreement.

         20.7 Counterparts. This Agreement may be executed in counterparts, each
         of which will be deemed an original, but all of which taken together
         will constitute one and the same instrument.

         20.8 Governing Laws.  This Agreement is governed by the internal laws
         of the State of Michigan.

         20.9 Third Party Beneficiaries. This Agreement is for the sole benefit
         of the Parties hereto and no third party may claim any right, or
         enforce any obligation of the Parties, hereunder.

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         20.10 Relationship. Nothing contained in this Agreement will be
         construed to make any of the Parties partners, principals, agents or
         employees of the other, except as explicitly provided. None of the
         Parties will have any right, power or authority, express or implied, to
         bind any of the other Parties. Nothing contained in this Agreement
         shall be construed to imply multiemployer bargaining with respect to
         the labor affairs of the other Party.

         20.11 Good Faith and Fair Dealing. In entering into this Agreement, the
         Parties each acknowledge and agree that all aspects of the relationship
         among the Parties contemplated by this Agreement, including the
         performance of all obligations under this Agreement, will be governed
         by the fundamental principle of good faith and fair dealing.

         20.12 Consents, Approvals and Requests. Except as specifically set
         forth in this Agreement, all consents and approvals to be given by any
         of the Parties under this Agreement will not be unreasonably withheld
         or delayed.

         20.13 Further Assurances. The Parties will execute such further
         assurances and other documents and instruments and do such further and
         other things as may be necessary to implement and carry out the intent
         of this Agreement.

         20.14 Excusable Delays. Neither Party will be liable for a failure to
         perform any obligation under this Agreement that arises from causes or
         events beyond its reasonable control and without its fault or
         negligence, including labor disputes. The Party claiming the excusable
         delay shall give notice in writing as soon as possible to the other
         Party after the occurrence of the cause relied on and after termination
         of the condition.

                  IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as       , 2000.

FORD MOTOR COMPANY                        VISTEON CORPORATION

By: /s/ Malcolm Macdonald                 By: /s/ Daniel R. Coulson
   --------------------------------          --------------------------------

Title: Vice President and Treasurer       Title: Executive Vice President and
       ----------------------------             -----------------------------
                                                 Chief Financial Officer
                                                -----------------------------

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                                  ATTACHMENT A

         PENSION, RETIREE HEALTH CARE AND RETIREE LIFE INSURANCE EXPENSE

For purposes of Section 7(iii) of the Hourly Employee Assignment Agreement, (the
"Agreement') the expense for Retirement Plans-Pension, Retiree Health Care and
Retiree Life Insurance for the Ford Assigned Employees shall be determined in
accordance with the methodology described in this Attachment A.

     1.   Retirement Plans-Pension. Visteon shall be responsible for reimbursing
Ford with cash for the Statement of Financial Accounting Standards No. 87 ("SFAS
No. 87") annual future pension accruals with respect to the Ford Assigned
Employees, determined as provided below.

     1.1   Visteon Pension Account Established. Solely for purposes of
     determining the correct reimbursement, and not for purposes of establishing
     a separate trust or pension plan with respect to the Ford Assigned
     Employees, a notional Visteon-UAW Pension Asset Account ("Visteon Pension
     Account") will be established, as if the Ford-UAW Pension Plan in which the
     Ford Assigned Employees participate had been segregated into a separate
     trust which continued to participate in the Ford Master Trust. The Visteon
     Pension Account shall be established as of the first of the month
     coincident with or prior to the date of the distribution of Visteon stock
     to Ford shareholders ("Start Date"). The opening balance of the Visteon
     Pension Account will be established by crediting such account with assets
     equal in amount to the projected benefit obligation as defined in SFAS No.
     87 ("PBO") of the active Ford Assigned Employees as of the Start Date
     ("Hourly PBO"). The Hourly PBO shall be determined by an independent
     actuary appointed by Ford ("Ford Actuary") using:

               (i)  the actuarial assumptions and methods used in the most
                    recent SFAS 87 actuarial valuation developed for accounting
                    purposes under the Ford-UAW Retirement Plan prepared by the
                    Ford Actuary; and

               (ii) a discount rate as of the Start Date determined by Ford
                    using its normal methods for developing a SFAS 87 discount
                    rate but based on market interest rates as of the Start
                    Date.

     An independent actuary appointed by Visteon ("Visteon Actuary") shall have
     the opportunity to verify the calculation of the Hourly PBO.

     1.2  Visteon Pension Account Activity. After the opening balance of the
     Visteon Pension Account is determined in accordance with Section 1.1 above,
     it shall be managed as follows:

<PAGE>   15
          It shall be credited with

                    (i)   any cash contribution paid by Visteon to Ford under
                          this Section One; and

                    (ii)  the Ford U.S. Pension Master Trust actual rate of
                          investment return.

          It shall be debited with

                    (iii) the amount of retirement benefits payable to the Ford
                          Assigned Employees who retire after the Start Date;
                          and

                    (iv)  an allocable share of Ford-UAW Plan expenses based on
                          the ratio of PBO of the Ford Assigned Employees to the
                          total PBO of the Ford UAW Retirement Plan, unless Ford
                          and Visteon agree to another method.

          If for administrative reasons, the exact amount of retirement benefits
          payable to the Ford Assigned Employees cannot be determined precisely,
          then Ford shall be able to substitute a fair approximation of the
          retirement benefits paid. The Visteon Actuary shall have the
          opportunity to verify the calculation.

     1.3  Determination of Annual Cash Pension Reimbursement. The cash payable
     by Visteon to Ford for any given year shall be equal to the sum of (A), (B)
     and (C) where :

          (A)  is the SFAS 87 pension expense for that year (or, at the outset,
               a part year) based on:

                    (i)   as of each annual actuarial valuation date, the
                          liabilities of the Ford Assigned Employees;

                    (ii)  the Ford-UAW Retirement Plan assumptions used in the
                          Ford Actuary`s SFAS 87 valuation of the Ford-UAW
                          Retirement Plan for the applicable year; and

                    (iii) the value of the Visteon Pension Account

          (B)  is the administration expenses as defined in Section 1.2 (iv) of
               this Attachment; and

                                       2
<PAGE>   16
          (C)  SFAS 88 pension expense for Ford Assigned Employees related to
               any termination incentive programs occurring in the year.

     2.   Retiree Health Care and Retiree Life Insurance. Visteon shall pay the
cost of providing post-retirement health and life benefits for Ford Assigned
Employees under the Ford-UAW Hospital-Surgical-Medical-Drug-Dental-Vision
Program and the Ford-UAW Group Life and Disability Insurance Plan (the "Plans")
("OPEB") beginning as of the Start Date as provided below.

     2.1  Determination of Annual Cash OPEB Reimbursement. For the portion of
     2000 that follows the Start Date and for each calendar year thereafter
     until the OPEB liability for the Ford Assigned Employees is extinguished,
     the Annual Cash OPEB Reimbursement to the Plans for any given year shall be
     an amount equal to the sum of (A) and (B) where

          (A)  is the estimated amount of OPEB claims paid during the period to
               the Ford Assigned Employees who retire after the Start Date,
               together with their spouses or dependents, determined on the
               basis of average per contract claims costs for Ford-UAW retirees;
               and

          (B)  is an allocable share of administration expenses based on the
               ratio of OPEB liability for Ford Assigned Employees to total
               Ford-UAW OPEB liability, unless Ford and Visteon agree to another
               method.

     The Annual Cash OPEB Reimbursement shall be determined by the Ford Actuary;
     the Visteon Actuary will have the opportunity to verify the calculation.

     2.2  Pre-Funding of SFAS 106 Liability. Visteon will establish and maintain
     a Voluntary Employees' Beneficiary Association ("VEBA") trust whose purpose
     is to reimburse the Plans in respect of the claims and administration costs
     described in Section 2.1 above. Visteon agrees that it will make a series
     of cash payments to the VEBA so that by December 31, 2020 the assets in the
     VEBA will equal Visteon's balance sheet liability at the same date for OPEB
     benefits in respect of Ford Assigned Employees The cash payment to the VEBA
     shall commence no later than January 1, 2006 and shall be payable in
     advance in twelve equal monthly installments. The amount of cash paid to
     the VEBA in each year commencing no later than January 1, 2006 shall be an
     amount equal to the sum of (A), (B) and (C ) where

          (A)  is the Visteon SFAS 106 expense for that year as computed by the
               Ford Actuary (and verified by the Visteon Actuary) and based on
               assumptions used by Ford for its Ford-UAW employees;

                                       3

<PAGE>   17
          (B)  is an allocable share of expenses as described in Section 2.1(B)
               above; and

          (C)  is the amount of Visteon's OPEB balance sheet liability in
               respect of Ford Assigned Employees at the beginning of each
               calendar year divided by the number of years remaining to
               December 31, 2020.

     Notwithstanding the above, Visteon may accelerate payments to the VEBA in
its discretion. In the event the tax law would not permit Visteon a current
deduction for the level of funding described above, Visteon may make only such
contributions to the VEBA that would be tax deductible, provided, however that
the balance of the funding obligation which exceeds the permitted deduction is
otherwise deposited into a separate trust. Visteon and Ford shall cooperate with
each other to design, and Visteon agrees it will take necessary action to
implement, an appropriate method approved by the Parties' respective auditors
that would have the effect of eliminating the Ford's FAS 106 OPEB balance sheet
liability for the Ford Assigned Employees beginning on the Start Date. In the
event that the tax benefits contemplated by the Parties as being available to
Visteon with respect to prefunding of OPEB liabilities are not or cease to be
available, Visteon and Ford agree to renegotiate the structure provided the new
structure does not increase Ford's costs or jeopardize Ford's security. If Ford
and Visteon cannot agree on a replacement structure, or if Visteon fails to
suggest a replacement structure, then Visteon will pay to Ford directly the
payments it otherwise would have paid to the VEBA. Ford shall credit interest on
such amount at the pretax rate of return on Ford's cash portfolio.

     3.   Recordkeeping. In connection with administering Section One and Two
above, Ford may decide to retain a third party service to maintain the notional
Visteon Pension Account and to determine the correct amount of Visteon
reimbursements according to the methodology set forth in this Attachment A. If
Ford decides to retain a third party service, Ford shall consult with Visteon
prior to appointing a third party service, but Ford shall retain the right to
appoint a third party service in its sole discretion. Ford shall pay the expense
of such third party service and Visteon shall reimburse Ford for such expense.

     4.   Continuation of Arrangements. The terms set forth in this Attachment A
shall be in force until the last survivors and dependents of Ford Assigned
Employees in service as of the Start Date who are eligible for Ford-UAW
retirement or OPEB benefits are deceased, or upon earlier termination agreed
jointly by Ford and Visteon, including any VEBA or other arrangements or methods
agreed in Section 2.2 (unless the Parties' respective auditors advise that joint
agreement to terminate would jeopardize the expected accounting treatment of
such arrangements or methods). As soon as practical following the death of the
last survivor and covered dependents of the Ford Assigned Employees who are
eligible for Ford-UAW retirement benefits, Ford shall pay

                                       4

<PAGE>   18
to Visteon either cash or provide equivalent monetary value, in an amount equal
to the balance (if any) remaining in the Visteon Pension Account.

     5.   Ability to Substitute. The Parties may agree to substitute an
alternative method of computing reimbursement under this Attachment. The method
substituted shall have as its objective to produce a fair estimate of the
pension and OPEB expense and other reimbursement charges set forth in this
Attachment, and should preserve for each Party, to the extent possible, the
economic benefits bargained under this Attachment. Without limiting the rights
of Ford and Visteon as provided above, the Parties agree to jointly evaluate and
equitably refine the reimbursement mechanism described in this Attachment as
applied to periods following the earlier to occur of (A) termination of the
Agreement, and (B) the date, if any, on which all or a significant portion of
the Ford Assigned Employees become Visteon Hourly Employees.

     6.   Definitions. Unless otherwise specifically defined herein, the
capitalized terms herein shall have the same meanings as set forth in the
Agreement.

     7.   Actuarial Verification. If the Visteon Actuary and the Ford Actuary
are unable to agree on a verification, they shall jointly designate a third
independent actuary whose verification shall be final and binding. Ford and
Visteon shall each pay one-half of the cost of such third actuary.

     8.   Employee Transfers. In the event that an employee ceases to be a Ford
Assigned Employee, but remains an employee of Ford, then Visteon shall not be
responsible for the cost of pension, retiree health or retiree life benefits for
such employee. Ford will assume the obligation and Visteon will reimburse Ford
as follows:

     (A)  Pensions: The balance in the Visteon Pension Account will be reduced
          by the amount of the SFAS 87 PBO transferred to Ford;

     (B)  Retiree health and life benefits: Visteon will pay Ford an amount
          equal to the SFAS 106 APBO transferred to Ford.

All adjustments should be handled on a quarterly basis based on SFAS 87 and SFAS
106 assumptions appropriate for that quarter.

Visteon shall retain appropriate records in order to identify these transfers.

In the event that a Ford employee becomes a Ford Assigned Employee, then Visteon
shall assume the obligation for pensions, retiree health and retiree life
benefits for such employee, and the financial arrangements shall be the reverse
of those described above.

If the reimbursements for retiree health and life benefits exceeds $10 million
per year, the Party with the obligation shall have the option to pay $10 million
in the first year,

                                       5

<PAGE>   19
and shall pay the balance in succeeding years in annual installments of at least
$5 million until the obligation is satisfied, together with interest on the
obligation at the 90 day Treasury Bill rate as quoted in the Wall Street Journal
for the relevant period.

                                       6<PAGE>   1
                                                                    EXHIBIT 10.7

                          EMPLOYEE TRANSITION AGREEMENT

         This Employee Transition Agreement relating to certain employment
matters and employee benefit plans (this "Agreement") dated as of April 1, 2000
is made and entered into by and among Ford Motor Company, a Delaware corporation
("Ford") and Visteon Corporation, a Delaware corporation and a wholly owned
subsidiary of Ford, ("Visteon"). Ford and Visteon are referred to herein
individually as a "Party" and collectively as the "Parties".

                                    RECITALS

1.   Ford has determined that it would be appropriate and beneficial to separate
     the activities now being conducted under the name of "Visteon Automotive
     Systems, an enterprise of Ford Motor Company," including those activities
     conducted by any entity in which Ford, directly or indirectly, owns or
     controls 50% or more of its stock or other equity interests (a
     "Subsidiary") and by any entity in which Ford, directly or indirectly, owns
     or controls less than 50% but more than 20% of its stock or other equity
     interests (an "Affiliate") which is aligned with such enterprise, which
     presently includes the Chassis Systems, Climate Control Systems, Interior
     and Exterior Systems, Energy Transformation Systems, Glass Division, and
     the Visteon Technology Office (collectively, with historic operations,
     including the former Automotive Products Operations, Automotive Components
     Division, Electronics, Plastics and Trim, Climate Control, Chassis,
     Electrical and Fuel Handling, and Glass Divisions, the "Business");

2.   Ford has concluded that the separation of the Business from its automaking
     business would (i) alleviate competitive barriers to expanding the Business
     beyond sales to Ford, Ford Subsidiaries and Ford Affiliates, (ii) allow
     Ford to overcome competitive barriers to making purchases from third-party
     automotive suppliers, and (iii) enhance the Business' ability to attract
     employees and permit the Business to offer employee incentives more
     directly tied to the performance of the Business;

3.   Ford has caused Visteon to be formed for the purpose of carrying on and
     conducting the Business;

4.   Ford and Visteon have entered into various agreements, including a Master
     Transfer Agreement dated as of even date herewith, to effect the separation
     of the Business; and

5.   The parties desire that Ford transfer to Visteon certain employees who are
     presently engaged in doing work for the Business and to provide for the
     orderly transition of employee benefit plans.

<PAGE>   2

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

1.01 "BENEFIT TRANSITION DATE" shall mean the first day of the month coincident
with or preceding the Distribution Date except with respect to the Ford Flexible
Benefits Plan shall mean June 1, 2000.

1.02 "CODE" shall mean the Internal Revenue Code of 1986, as amended.

1.03 "DISTRIBUTION DATE" shall mean the date Ford will distribute to Ford
shareholders all of the shares of Visteon common stock then owned by Ford.

1.04 "DOL"  shall mean the U.S. Department of Labor.

1.05 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

1.06 "FORD BUSINESS EMPLOYEES" shall mean

     (i)  Persons who are enrolled on the Ford salaried payroll (U.S. or
          non-U.S) or enrolled on the Ford hourly payroll in non-U.S
          jurisdictions and who are actively at work at the Business the day
          prior to the Transfer Date including those on paid time off (i.e. Jury
          Duty Pay, Bereavement Pay, Short Term Military Pay, Vacation and Paid
          Holiday) and those on reduced or alternate work schedules, but
          excluding Ford employees who are on temporary assignment to the
          Business ("Active Ford Business Employees"); and

     (ii) Persons who are absent from such salaried or hourly employment as of
          the day prior to the Transfer Date on account of short term or long
          term disability leave or other approved leaves of absence, or layoff
          ("Inactive Ford Business Employees").

                                       2
<PAGE>   3

1.07 "FORD RETIREE" shall mean a former Ford Business Employee, or a surviving
spouse or beneficiary of a former Ford Business Employee, who had terminated
service with Ford or Visteon and is receiving retirement benefits under a Ford
sponsored retirement plan as of the Benefit Transition Date or who terminated
employment with Ford or Visteon on or before the Benefit Transition Date and is
eligible on the Benefit Transition Date to receive immediate or future
retirement benefits (including deferred vested benefits) under the Ford
sponsored retirement plan.

1.08 "GENERAL RETIREMENT PLAN" OR "GRP" shall mean the General Retirement Plan
of Ford Motor Company and its participating subsidiaries.

1.09 "GLOBAL FORD BUSINESS EMPLOYEES" shall mean all employees of Ford or its
Subsidiaries or Affiliates who are engaged in the conduct of the Business prior
to the Transfer Date, including but not limited to

     (i)  Ford Business Employees; and

     (ii) Persons who are enrolled on the payroll of a Subsidiary or Affiliate
          of Ford engaged in the Business as of the Transfer Date, or persons
          who are no longer active but who had been employed by a Subsidiary or
          Affiliate engaged in the Business at any time prior to the Transfer
          Date ("Subsidiary Employees").

1.10 "GLOBAL VISTEON EMPLOYEES" shall mean all employees of Visteon or its
subsidiaries or affiliates who are engaged in the conduct of the Business after
the Transfer Date, including but not limited to

     (i)  Visteon Employees; and

     (ii) Subsidiary Employees who as a result of the transfer of Ford's
          interest in the Subsidiary or Affiliate to Visteon as of the Transfer
          Date, became employed by, or became the responsibility of, a
          subsidiary or affiliate of Visteon on the Transfer Date.

For purposes of this Agreement, Global Visteon Employees shall not include any
employees hired directly by Visteon or its subsidiaries or affiliates after the
Transfer Date.

1.11 "GROUP I EMPLOYEE" shall mean a U.S. Visteon Employee who as of the Benefit
Transition Date is eligible for immediate normal or regular early retirement
under the provisions of the GRP as in effect on the Benefit Transition Date.

                                       3
<PAGE>   4
1.10 "GROUP II EMPLOYEE" shall mean a U.S. Visteon Employee who

     (i)   is not a Group I Employee;

     (ii)  has as of the Benefit Transition Date a combination of age and
           continuous service that equals or exceeds sixty (60) points (partial
           months disregarded); and

     (iii) could become eligible for normal or regular early retirement under
           the provisions of the GRP as in effect on the Benefit Transition Date
           within the period after the Benefit Transition Date equal to the
           employee's Ford service as of the Benefit Transition Date.

1.12 "GROUP III EMPLOYEE" shall mean any U.S. Visteon Employee who participates
in the GRP other than a Group I or II Employee.

1.13 "IRS" means the U.S. Internal Revenue Service.

1.14 "OSHA" shall mean the Occupational Safety and Health Act of 1970, as
amended.

1.15 "PBGC" shall mean the Pension Benefit Guaranty Corporation.

1.16 "SFAS NO. 87" shall mean the Statement of Financial Accounting Standards
No. 87.

1.17 "SFAS NO. 106" shall mean the Statement of Financial Accounting Standards
No. 106.

1.18 "TRANSFER DATE" shall mean the date specified in the Master Transfer
Agreement with respect to each entity or interest to be transferred pursuant
thereto.

1.19 "VISTEON BALANCE SHEET" shall mean the balance sheet for Visteon Automotive
Systems as of March 31, 2000, as prepared by Ford.

1.20 "VISTEON EMPLOYEES" shall mean

     (i)  Active Ford Business Employees who are transferred to Visteon pursuant
          to the terms hereof and who are at work on the Transfer Date including
          those on paid time off (i.e., Jury Duty Pay, Bereavement Pay, Short
          Term Military Pay, Vacation Pay and Paid Holiday) and those on reduced
          or alternate work schedules; and

     (ii) Inactive Ford Business Employees or Ford Retirees on a disability
          retirement who are transferred to Visteon pursuant to the terms hereof
          on the Reinstatement Date or Disability Retiree Reinstatement Date.

                                       4
<PAGE>   5

         For purposes of this Agreement, Visteon Employees shall not include any
employees hired directly by Visteon after the Transfer Date, except for those
specified in (ii) above.

1.21 "VISTEON RETIREE" shall mean a former Ford Business Employee, or a
surviving spouse or beneficiary of a former Ford Business Employee, who became a
Visteon Employee and who terminated service with Visteon after the Benefit
Transition Date and is receiving retirement benefits under a Ford sponsored
retirement plan and a Visteon sponsored retirement plan.

                                   ARTICLE II

                            EMPLOYMENT RESPONSIBILITY

2.01 EMPLOYEE CENSUS.

     On the Transfer Date, Ford shall provide Visteon a preliminary employee
census ("Employee Census") containing the following information:

     (i)   a list of all Active Ford Business Employees by location;

     (ii)  a list of all Inactive Ford Business Employees by location;

     (iii) the job classification of each Ford Business Employee;

     (iv)  the Ford Service Date of each Ford Business Employee;

     (v)   the base monthly salary of each Ford Business Employee;

     (vi)  the reason for any absence of any Ford Inactive Business Employee and
           the date any leave expires.

Ford shall finalize the Employee Census no later than thirty (30) days after the
Transfer Date, subject to Visteon review. Ford shall not be responsible for
providing Visteon an Employee Census of the Global Ford Business Employees.

2.02 EMPLOYMENT TRANSFER.

     Unless otherwise agreed, Ford shall transfer the employment of the Active
Ford Business Employees to Visteon effective on the Transfer Date and the Active
Ford Business Employees shall become Visteon Employees effective on the Transfer
Date. Ford shall transfer to Visteon the employment of an Inactive Ford Business
Employee who is recalled from layoff or other inactive status or requests
reinstatement on or before the date such employee's leave of absence expires or
as of the date such employee's medical disability ceases and such employee is
released by their personal physician to return to their former position of
employment or a comparable position consistent with any medical restrictions, as
applicable (the "Reinstatement Date"). In addition, Ford shall transfer to
Visteon employment responsibility for a Ford Retiree on

                                       5
<PAGE>   6

a disability retirement ("Disability Retiree") on the date the medical
disability ceases, such employee is released by their personal physician to
return to their former position of employment or a comparable position
consistent with any medical restrictions, and the retirement committee approves
the return to work ("Disability Retiree Reinstatement Date"). The Transfer Date,
the Reinstatement Date and the Disability Retiree Reinstatement Date shall be
known as the "Employment Date". Notwithstanding the above, Visteon shall remain
financially responsible for any costs incurred by Ford or its benefit plans and
programs related to the Inactive Ford Business Employees between the Transfer
Date and the Employment Date, and Visteon shall reimburse Ford for any such
costs under a method to be mutually agreed by the Parties. A Ford Business
Employee who is on an international service assignment to a non-Business
activity as of the Distribution Date shall remain in such assignment until
scheduled to return and shall return to the originating activity. A Ford
employee who is on international service assignment to a Business activity as of
the Distribution Date shall remain in such assignment until scheduled to return
and shall return to the originating activity. Visteon or Ford, as applicable,
shall reimburse the other for the costs of such employees after the Distribution
Date under a method to be mutually agreed by the Parties.

2.03 RECOGNITION OF SERVICE.

     Visteon shall recognize, or shall cause its subsidiaries or affiliates to
recognize, the Ford Service Date or Subsidiary Service Date, as applicable, of
each Global Visteon Employee in determining years of service under the employee
benefit plans and other compensation and benefit practices and polices of
Visteon or its subsidiaries or affiliates both prior to the Benefit Transition
Date and thereafter, except as otherwise provided in this Agreement.

2.04 COMPENSATION AND BENEFIT PLANS.

     Visteon shall pay each Global Visteon Employee at the same base salary rate
or hourly rate as was applicable to them as a Global Ford Business Employee, and
shall implement any merit, promotional or other increases that were scheduled to
go into effect as of the Transfer Date. Effective on the Transfer Date, and
except as otherwise provided in this Agreement, Visteon shall adopt the same
benefit plans and programs for Visteon Employees as are in effect for Ford
Business Employees as of the Transfer Date, and shall participate in the Ford
employee benefit plans and programs as a participating subsidiary or its
equivalent until the Benefit Transition Date. Visteon shall reimburse Ford for
any such cost and expense consistent with the methods presently in effect for
charging such expenses to participating subsidiaries or their equivalents using
methodology consistent with U.S. GAAP and acceptable to both Parties. In
addition, Visteon shall reimburse Ford for any costs and expense incurred prior
to the Benefit Transition Date and that relate to Ford Retirees under an
incentivized separation program. Effective on the Benefit Transition Date, and
except as otherwise provided herein, Visteon shall adopt, or shall cause its
subsidiaries or affiliates to maintain or adopt, benefit plans and programs for
the U.S. Global Visteon Employees

                                       6
<PAGE>   7

that are substantially comparable in the aggregate to those that were in effect
on the day immediately preceding the Benefit Transition Date and shall continue
such programs substantially in effect for at least four (4) years after the
Distribution Date, provided, however, if Ford makes changes in the benefit plans
and programs applicable to Ford employees during the four (4) year period,
Visteon or its subsidiaries or affiliates, as applicable, shall be permitted,
but shall not be required, to make a comparable change. The comparability period
shall not be effective with respect to U.S. employees of Visteon who were hired
as new hires by Visteon after the Transfer Date or with respect to non-U.S.
Global Visteon Employees. Except as otherwise provided in this Agreement, Ford
shall take such action as is necessary to eliminate Global Visteon Employees
from Ford sponsored benefit plans and programs as of the Benefit Transition Date
unless otherwise agreed by the Parties, and thereafter Global Visteon Employees
shall have no rights under any such plans or programs.

2.05 PAID TIME OFF.

     Effective as of the Employment Date, each Global Visteon Employee shall
retain the same paid time off eligibility they had under Ford's paid time off
policy, or the policy of Ford's Subsidiaries or Affiliates. Any paid time off
used by a Global Ford Business Employee in 2000 prior to the Employment Date
shall be counted against such employee's entitlement as a Global Visteon
Employee after the Distribution Date until December 31, 2000.

2.06 COLLECTIVE BARGAINING AGREEMENTS.

     Certain of the Ford Business Employees are covered under the terms of the
collective bargaining agreements listed on Attachment A. Effective as of the
Transfer Date, Visteon shall assume the obligation of Ford under the collective
bargaining agreements applicable to such employees, and Ford shall be relieved
of any further obligations under such agreements with respect to such employees.
The Agreement Governing the Separation of the Ford Visteon Organization dated
January 25, 2000 between Ford and the Ford European Works Council, attached
hereto as Attachment B, shall apply to the Ford Business Employees represented
by the Ford European Works Council, and Visteon agrees to abide by its terms.

2.07 REEMPLOYMENT RESTRICTION.

     Except with the consent of Visteon, Ford shall not hire any Global Visteon
Employee during the period commencing as of the Distribution Date and
terminating twelve months thereafter, unless otherwise required by law.

                                       7
<PAGE>   8

                                   ARTICLE III

                             EMPLOYEE BENEFIT PLANS

3.01 U.S. QUALIFIED DEFINED BENEFIT RETIREMENT PLANS.

     a.   GRP Participating Subsidiary. U.S. Ford Business Employees participate
          in the GRP as employees of Ford. Effective as of the Transfer Date,
          Visteon shall take such corporate action as is necessary to
          participate in the GRP as a "Participating Subsidiary" as defined in
          the GRP with respect to the Visteon Employees until the Benefit
          Transition Date. Ford hereby consents to such participation by
          Visteon. Visteon shall reimburse Ford for the cost of any early
          separation incentive programs applicable to U.S. Ford Business
          Employees prior to the Benefit Transition Date.

     b.   Visteon Mirror GRP.

           (i)    Establishment of Plan. Effective on the Benefit Transition
                  Date, or such later date as the Parties may mutually agree,
                  Visteon shall establish its own defined benefit pension plan
                  that with respect to Group III Employees contains provisions
                  that duplicate the benefit provisions of the GRP as it
                  pertains to service prior to the Benefit Transition Date and
                  with respect to Group I and II Employees, contains
                  substantially comparable benefit provisions with respect to
                  service after the Benefit Transition Date ("Visteon Mirror
                  GRP"). The Visteon Mirror GRP shall be responsible for
                  providing retirement benefits for Group I and Group II
                  Employees for service on or after the Benefit Transition Date
                  and, subject to receipt of the asset transfer described below,
                  for Group III Employees for service recognized under the GRP
                  prior to the Benefit Transition Date and for service with
                  Visteon after the Benefit Transition Date. The Visteon Mirror
                  GRP shall recognize credited service of Visteon Employees
                  under the GRP through the Benefit Transition Date for purposes
                  of eligibility to participate and eligibility for benefits to
                  the same extent as such credited service (or ERISA service)
                  was counted under the GRP. Notwithstanding the above, for
                  purposes of calculating the Part B Contributory Benefit, only
                  a total of thirty five (35) years of combined Ford and Visteon
                  service may be used.

           (ii)   Asset Transfer Valuation. Ford shall cause to be transferred
                  from the GRP assets in cash or cash equivalents, or marketable
                  securities reasonably acceptable to Visteon, that shall equal
                  the projected benefit obligation, as defined in SFAS No. 87,
                  of the liabilities related to the Group III Employees as of
                  the Benefit Transition Date ("GRP PBO Value") determined by an
                  independent actuary appointed by Ford ("Ford Actuary") in
                  accordance with the principles stated below:

                                       8
<PAGE>   9

                  (A)  The present value of liabilities will be determined under
                       SFAS No. 87 as the projected benefit obligation, using
                       the actuarial assumptions and methods that are published
                       in the most recent actuarial valuation for accounting
                       purposes for the GRP prepared by Buck Consultants.

                  (B)  A discount rate as of the Benefit Transition Date
                       determined by Ford using its normal methods for
                       developing a SFAS No. 87 discount rate but based on
                       market interest rates as of the Benefit Transition Date.

          In no event shall the GRP PBO Value as calculated on the basis
          described above result in an asset transfer less than the amount
          necessary to reflect the requirements of the provisions of Code
          Section 411(d) and 414(l) and the Treasury Regulations issued
          thereunder and the actuarial methods and assumptions established by
          the PBGC with respect to spin-offs of pension plans where liabilities,
          for purposes of Code Section 411(d) and 414(l), are calculated using a
          discount rate equal to the applicable rate or rates published by the
          PBGC and in effect for plans terminating on the Benefit Transition
          Date. The determination of the GRP PBO Value by the Ford Actuary shall
          be submitted to an independent actuary appointed by Visteon (the
          "Visteon Actuary") for verification but such verification shall relate
          only to the calculation of the GRP PBO Value on the basis set forth
          above. If the Visteon Actuary and the Ford Actuary are unable to agree
          on a verification, they shall jointly designate a third independent
          actuary whose verification shall be final and binding. Ford and
          Visteon shall each pay one-half of the costs of such third actuary.

           (iii)   Transfer to Qualified Plan. Within ninety (90) days of the
                   Transfer Date (but in no event later than the Benefit
                   Transition Date), Visteon shall provide Ford with the plan
                   document for the Visteon Mirror GRP, together with either (A)
                   an opinion letter of counsel reasonably acceptable to Ford
                   that the Visteon Mirror GRP satisfies the requirements for
                   qualification under Section 401(a) of the Code as of its
                   effective date or will be amended to meet the qualification
                   requirements in the event the IRS requires retroactive
                   amendments to the Visteon Mirror Plan as part of the
                   determination letter process and that the transfer of assets
                   provided in (iv) below shall not affect the qualification of
                   such plan, or (B) a favorable determination letter issued by
                   the IRS that the Visteon Mirror GRP satisfies the
                   requirements for qualification under Section 401(a) of the
                   Code as of its effective date.

                                       9

<PAGE>   10

               (iv) Asset Transfer. As soon as practicable after the latest of
                    (A) the date on which the GRP PBO Value is determined and
                    verified pursuant to (ii) above, (B) the expiration of
                    thirty days following the filing of Forms 5310 with the IRS
                    and PBGC in respect of the GRP and the Visteon Mirror GRP or
                    (C) the receipt by Ford of the opinion or determination
                    letters described in (iii) above and determination by Ford
                    that the Visteon Mirror GRP satisfies the terms of this
                    Agreement (the "Asset Transfer Date"), Ford shall cause the
                    trustee of the GRP to transfer assets and respective
                    liability therefor to the Visteon Mirror Pension Plan in
                    such amount and in such form as provided in (ii) above,
                    together with interest from the Benefit Transition Date to
                    the first of the month immediately preceding the Asset
                    Transfer Date, at the Ford Master Trust rate of return, and
                    thereafter until the Asset Transfer Date, interest at the
                    90-day Treasury Bill rate on a bond equivalent yield in
                    effect on the last business day of the month immediately
                    preceding or coincident with the Asset Transfer Date as
                    quoted in the Wall Street Journal.

               (v)  No Further Liability. Upon receipt of the transferred assets
                    from the GRP, neither Ford nor the GRP shall have any
                    further liability to the Group III Employees for benefits
                    for service under the GRP with respect to which liabilities
                    and assets have been transferred. Ford and Visteon shall use
                    their respective best efforts to make amendments to their
                    respective plans and trusts as may be necessary or
                    appropriate to effect the transfers contemplated by these
                    provisions.

               (vi) Pension Security. The assets of the Visteon Mirror GRP that
                    are transferred from the GRP trust as provided in section
                    (iv) above, and any earnings thereon, shall be held in a
                    separate trust for a period equal to five years commencing
                    as of the Benefit Transition Date. Such assets shall be
                    available only for the purposes of providing pension
                    benefits for plan participants and their beneficiaries for
                    service under the Ford GRP through the Benefit Transition
                    Date ("Visteon Past Service Trust"). In the event the assets
                    in the Visteon Past Service Trust are insufficient to pay
                    the liability for accrued benefits measured on a plan
                    termination basis, determined as of each year end, using
                    PBGC assumptions, including the PBGC discount rates,
                    mortality tables and expected retirement ages unless Ford
                    agrees to such other rates, tables and assumptions certified
                    to by the Visteon Actuary as appropriate for measuring
                    liabilities on a plan termination basis, while such

                                       10
<PAGE>   11

                    Visteon Past Service Trust is maintained, Visteon shall
                    contribute sufficient cash within thirty days of the date
                    the year-end calculation is complete to restore the assets
                    in the Visteon Past Service Trust to be at least equal to
                    such termination liability. Notwithstanding the above,
                    Visteon need not contribute in any year an amount greater
                    than the maximum tax deductible contribution allowed for
                    such year, and provided further, that if the contribution
                    required would exceed $10 million in any year, Visteon shall
                    have the option to pay $10 million the first year, and shall
                    pay the balance in succeeding years in annual installments
                    of at least $5 million until the obligation is satisfied,
                    together with interest on the obligation at the 90 day
                    Treasury Bill rate as quoted in the Wall Street Journal for
                    the relevant period (the "Financial Burden Formula").
                    Visteon shall not terminate the Visteon Mirror GRP and
                    revert assets to Visteon for a period of five years after
                    the Benefit Transition Date. Visteon shall not invest any
                    assets of the Visteon Past Service Trust in an employer
                    security as defined in Section 407(d)(1) of ERISA for a
                    period of five years after the Benefit Transition Date.

          c.   Ford GRP Pension Liability.

               (i)  Ford Retirees. The GRP shall retain liability for retirement
                    benefits for all Ford Retirees, and shall retain all GRP
                    assets with respect thereto. The benefits payable shall be
                    based on the benefit provisions applicable under the GRP as
                    of the date of retirement, and as may be subsequently
                    amended. To the extent that such benefit is based on final
                    average salary under the GRP, the GRP will take into account
                    any base salary paid at Visteon while an employee as of the
                    December 31 prior to the Benefit Transition Date. Ford shall
                    amend the GRP to provide that Ford Retirees may be employed
                    at Visteon after the Distribution Date and remain eligible
                    to receive benefits under the GRP.

               (ii) Group I and Group II Employees For Pre-Benefit Transition
                    Date Service. The GRP shall retain liability for retirement
                    benefits of Group I and Group II Employees, but only for
                    service through the Benefit Transition Date. The GRP shall
                    recognize credited service (or ERISA service) of U.S.
                    Visteon Employees under the Visteon Mirror GRP for purposes
                    of eligibility to participate and eligibility for benefits
                    to the same extent as if such credited service (or ERISA
                    service) was earned under the GRP, but not for purposes of
                    benefit calculation. The retirement benefits paid to Group I
                    and Group II Employees from the GRP shall be based on the
                    benefits in effect as of the retirement date using the final
                    average salary of the

                                       11
<PAGE>   12

                    Group I or Group II Employee at retirement from Visteon,
                    giving effect to Visteon base salary increases after the
                    Benefit Transition Date. Visteon shall reimburse Ford for
                    the following additional costs: (A) the cost of benefit
                    increases under the GRP that occur after the Benefit
                    Transition Date and relate to service prior to the Benefit
                    Transition Date; (B) for the effect on the PBO related to
                    Group I and Group II Employees for any Visteon average merit
                    salary increase which exceeds the average Ford merit
                    increase by one-half percent in any given year, provided
                    Visteon shall receive credit if the Visteon average merit
                    salary increase is less than the average Ford merit increase
                    by one-half percent in any given year; and (C) for the
                    effect on the PBO related to Group I and Group II Employees
                    as a result of Visteon's implementation of any early
                    separation incentive programs, provided however that Visteon
                    shall receive credit if the effect of such programs reduces
                    the PBO. The method of computing the reimbursements shall be
                    as described on Schedules X, Y and Z. The amount of
                    reimbursement shall be determined by Ford's Actuary and
                    shall be subject to verification by Visteon's Actuary. If
                    the Visteon Actuary and the Ford Actuary are unable to agree
                    on a verification, they shall jointly designate a third
                    independent actuary whose verification shall be final and
                    binding. Ford and Visteon shall each pay one-half of the
                    cost of such third actuary. The reimbursements shall be done
                    annually within thirty days after the annual actuarial
                    valuation of the GRP is completed by the Ford Actuary and
                    verified by Visteon's Actuary. If the reimbursements for
                    either Party exceeds in the aggregate $10 million per year
                    (relating to costs under (A), (B) and (C ) above and under
                    (A), (B) and (C) of Section 3.02c(ii) incurred in that year,
                    but not including costs under (A), (B), and (C ) above or
                    under (A), (B) and (C) of Section 3.02c(ii) incurred in
                    prior years) the Party with the obligation shall have the
                    option to pay the obligation according to the Financial
                    Burden Formula. Group I and Group II Employees who retire
                    under the GRP will be eligible for the same Ford
                    postretirement benefits, such as health care and life
                    insurance and certain other Ford sponsored programs on the
                    same basis as other Ford employees retiring at the same
                    time.

          d.  Prorated GRP Supplements.

               (i)  Early Retirement Supplement. To the extent that any Early
                    Retirement Supplement is payable under the GRP to a Group I
                    or Group II Employee, the amount of the total monthly
                    benefit used for determining the Early Retirement Supplement
                    shall be determined as follows: The amount of the total
                    monthly benefit that would otherwise be used for determining
                    the Early Retirement

                                     12

<PAGE>   13

                    Supplement under the GRP at the time the Group I or Group II
                    Employee retires shall be multiplied by a fraction, the
                    numerator of which is the number of years of credited
                    service, including fractions of a year, under the GRP not to
                    exceed thirty years, and the denominator of which is thirty.
                    To the extent that any Early Retirement Supplement is
                    payable under the Visteon Mirror GRP to a Group I or Group
                    II Employee, the amount of the total monthly benefit that
                    would otherwise be used for determining the Early Retirement
                    Supplement under the Visteon Mirror GRP at the time the
                    Group I or Group II Employee retires shall be multiplied by
                    a fraction, the numerator of which is thirty less the number
                    of years (not to exceed thirty) of credited service,
                    including fractions of a year, under the GRP to the Benefit
                    Transition Date and the denominator of which is thirty. In
                    the event the Group I or Group II Employee has credited
                    service under the GRP of thirty or more years as of the
                    Benefit Transition Date, no Visteon Mirror Supplement shall
                    be payable.

               (ii) Interim Supplement or Temporary Benefit. To the extent that
                    any Interim Supplement or Temporary Benefit is payable under
                    the GRP to a Group I or Group II Employee, the amount of the
                    Interim Supplement or Temporary Benefit as applicable, shall
                    be determined by multiplying the number of years of credited
                    service (not to exceed 30), including fractions of a year,
                    under the GRP as of the Benefit Transition Date by the
                    monthly Interim Supplement Rate, or Temporary Benefit Rate,
                    as applicable, in effect at the time of retirement. To the
                    extent that any Interim or Temporary Benefit is payable
                    under the Visteon Mirror GRP to a Group I or Group II
                    Employee, the amount of the benefit shall be shall be
                    determined by multiplying the number of years of credited
                    service (except if the combined Ford and Visteon service
                    exceeds thirty, then the Visteon benefit shall be determined
                    by subtracting from thirty years the years of Ford credited
                    service), including fractions of a year, under the Visteon
                    Mirror GRP by the monthly Interim Supplement Rate, or
                    Temporary Benefit Rate, as applicable, in effect at the time
                    of retirement. In the event a Group I or Group II Employee
                    has credited service under the GRP of thirty or more years
                    as of the Benefit Transition Date, no Visteon Mirror Interim
                    Supplement or Temporary Benefit shall be payable.

          e.   Group II Employees Who Fail Grow-in. Except as otherwise provided
               by law, for those Group II Employees who do not continue to
               be employed by Visteon or a successor to Visteon until such time
               as their age and combined service with Ford through the Benefit
               Transition Date and with Visteon or its successor after the
               Benefit Transition Date would be

                                       13
<PAGE>   14

               sufficient to result in eligibility for retirement under the GRP,
               any benefit payable for years of service prior to the Benefit
               Transition Date shall be based on the benefit rate and final
               average salary, if applicable, in effect under the GRP on the
               date such employee breaks service under the Visteon Mirror GRP.
               In such event, such employee shall be treated as a "deferred
               vestee" under the GRP, if otherwise eligible based on combined
               service. Benefits for service at Visteon after the Benefit
               Transition Date shall be payable by Visteon.

          f.   U.S. Master Trust. After the Transfer Date, the defined benefit
               plans of Ford Electronics and Refrigeration, LLC. ("FE&R") may
               continue to participate in the U.S. Ford Master Trust until the
               Benefit Transition Date. Visteon shall establish a U.S. Visteon
               Master Trust no later than the Benefit Transition Date and Ford
               shall cause the Trustee of the U.S. Ford Master Trust to transfer
               the assets in such U.S. Ford Master Trust allocable to FE&R's
               defined benefit plans to the trustee of the U.S. Visteon Master
               Trust. Assets shall be valued at the end of the month coincident
               with or following the Distribution Date ("Valuation Date") and
               cash or cash equivalents, or marketable securities acceptable to
               Visteon, shall be transferred within thirty (30) days thereafter,
               together with interest from the Valuation Date to the asset
               transfer date at the 90-day Treasury Bill rate on a bond
               equivalent yield in effect on the last business day of the month
               immediately preceding the asset transfer date as quoted in the
               Wall Street Journal. Assets attributable to such plans that are
               held outside the Ford Master Trust also shall be transferred to
               Visteon on or before the asset transfer date, in such form as
               such assets are presently held. Nothing herein contained shall be
               construed as to prohibit Ford from causing Visteon to transfer
               assets and liabilities from FE&R sponsored salaried defined
               benefit plans to Ford sponsored defined benefit plans prior to
               the Benefit Transition Date for the purpose of aligning
               appropriate liabilities with respect to the Business, provided
               such transfers comply with applicable law and result in each such
               FE&R salaried defined benefit plan having assets with a fair
               market value as of January 1, 2000 equal to the projected benefit
               obligation, as defined in SFAS No. 87, of the liabilities related
               to non-transferred participants in each such plan as of January
               1, 2000. Visteon shall cooperate with Ford in effectuating such
               transfers in the period between the Transfer Date and the Benefit
               Transition Date.

3.02     U.S. NON-QUALIFIED RETIREMENT PLANS.

          a.   Participating Subsidiary. Ford maintains the following U.S.
               non-qualified retirement plans in which certain U.S. Ford
               Business Employees who are eligible under the terms of the plans
               participate: The Benefit Equalization Plan ("BEP"), the
               Supplemental Executive Retirement Plan ("SERP") and

                                       14
<PAGE>   15

               the Executive Separation Allowance Plan ("ESAP") and the Select
               Retirement Plan ("SRP"). As of the Transfer Date, Visteon shall
               take such corporate action as is necessary to become a
               Participating Subsidiary under the SERP, ESAP and SRP and Ford
               hereby consents to such participation.

          b.   Visteon Mirror NQPs. Effective on the Benefit Transition Date,
               Visteon shall establish for the benefit of the U.S. Visteon
               Employees who are otherwise eligible as of the Benefit Transition
               Date for a BEP, SERP or ESAP benefit, its own non-qualified
               retirement plans that with respect to eligible Group III
               Employees contain provisions that duplicate the benefit
               provisions of the BEP, SERP and ESAP as it pertains to service
               prior to the Benefit Transition Date and with respect to eligible
               Group I and Group II Employees, contains substantially comparable
               benefit provisions with respect to service after the Benefit
               Transition Date ("Visteon Mirror NQPs"). For eligible Group I and
               Group II Employees, Visteon shall be responsible for paying a
               benefit for service after the Benefit Transition Date under the
               Visteon Mirror NQPs. For eligible Group III Employees, the
               liability for any service prior to the Benefit Transition Date
               under the BEP, SERP and ESAP shall be transferred to the
               respective Visteon Mirror NQPs, and Visteon shall be responsible
               for paying a benefit based on combined service at Ford and
               Visteon. Visteon's Mirror NQPs shall recognize service at Ford
               for purposes of determining any minimum years of service to
               achieve eligibility for benefits under such plans.

          c.   Ford Liability.

               (i)  Ford Retirees. Ford shall retain the liability for eligible
                    Ford Retirees. The benefit payable under the BEP, SERP, ESAP
                    and SRP shall be based on the benefit provisions applicable
                    under such plans as of the date of retirement, and as may be
                    subsequently amended. To the extent such benefit is based on
                    final average salary or final salary, the applicable plan
                    will take into account any base salary paid at Visteon prior
                    to the Benefit Transition Date. Ford Retirees may be
                    employed at Visteon after the Distribution Date and remain
                    eligible to receive benefits under the BEP, SERP, ESAP and
                    SRP.

               (ii) Group I and Group II Employees for Pre-Benefit Transition
                    Date Service. Ford shall retain the liability for benefits
                    for Group I or Group II Employees who have attained the
                    minimum Leadership Level required for such benefits as of
                    the Benefit Transition Date, but only for service through
                    the Benefit Transition Date. For example, a Group I or Group
                    II Employee who attains Leadership Level 1 or 2 on or after
                    the Benefit Transition Date shall have no

                                       15
<PAGE>   16

                    benefit payable under the Ford ESAP. As soon as practical
                    after the Benefit Transition Date, Visteon shall pay cash to
                    Ford in an amount equal to the BEP, SERP and ESAP projected
                    benefit obligation with respect to the eligible Group I or
                    Group II Employees determined by the Ford Actuary and
                    verified by the Visteon Actuary as of the Benefit Transition
                    Date. If the Visteon Actuary and the Ford Actuary are unable
                    to agree on a verification, they shall jointly designate a
                    third independent actuary whose verification shall be final
                    and binding. Ford and Visteon shall each pay one-half of the
                    costs of such third actuary. The benefits paid to an
                    eligible Group I and Group II Employee from the BEP, SERP
                    and ESAP shall be based on the accrued benefits and
                    eligibility, at rates in effect as of the retirement date
                    using the final average salary, or final salary as
                    applicable, of the eligible Group I or Group II Employee at
                    retirement, giving effect to Visteon salary increases after
                    the Benefit Transition Date. Visteon shall reimburse Ford
                    for the following additional costs: (A) the cost of benefit
                    increases under the BEP, SERP and ESAP that occur after the
                    Benefit Transition Date (including changes in the accrual
                    rate) and which relate to service prior to the Benefit
                    Transition Date, when such increases occur; (B) for the
                    effect on the PBO for any Visteon average merit salary
                    increase which exceeds the average Ford merit increase by
                    one-half percent in any given year provided that Visteon
                    shall receive credit if the Visteon average merit salary
                    increase is less than the average Ford merit increase by
                    one-half percent in any given year; and (C ) for the effect
                    of the PBO as a result of Visteon's implementation of any
                    early separation incentive programs, provided however that
                    Visteon shall receive credit if the effect of such programs
                    reduces the PBO. The method of computing the reimbursements
                    shall be as described on Schedules X, Y and Z. The amount of
                    reimbursement shall be determined by Ford's Actuary and
                    shall be subject to verification by Visteon's Actuary. If
                    the Visteon Actuary and the Ford Actuary are unable to agree
                    on a verification, they shall jointly designate a third
                    independent actuary whose verification shall be final and
                    binding. Ford and Visteon shall each pay one-half of the
                    costs of such third actuary. Such reimbursements shall be
                    done annually within thirty days after the annual actuarial
                    valuation of the BEP, SERP and ESAP is completed by the Ford
                    Actuary and verified by the Visteon Actuary. If the
                    reimbursements for either Party exceeds in the aggregate $10
                    million per year (relating to costs under (A), (B) and (C )
                    above or under (A), (B) or (C) under Section 3.01c(ii)
                    incurred in that year, but not including costs under (A),
                    (B) and (C ) above or under (A), (B) or (C) under Section
                    3.01c(ii) incurred in prior years), the Party with the
                    obligation shall have the option to pay the obligation
                    according to the Financial Burden Formula.

                                       16

<PAGE>   17

               (iii)  Group III Employees. After the Benefit Transition Date,
                      Ford shall have no liability for benefits payable to
                      eligible Group III Employees with respect to service prior
                      to the Benefit Transition Date.

3.03 RETIREE HEALTH CARE AND RETIREE LIFE INSURANCE.

     Visteon shall pay the cost of providing post-retirement health and life
benefits for Group I and Group II Employees under the Ford Health and Group Life
and Disability Insurance Plan (the "Plans") ("OPEB") beginning as of the Benefit
Transition Date as provided below.

     a.   Determination of Annual Cash OPEB Reimbursement. For the portion of
          2000 that follows the Benefit Transition Date and for each calendar
          year thereafter until the OPEB liability for the Group I and Group II
          Employees is extinguished, the annual cash OPEB reimbursement to the
          Plans for any given year shall be an amount equal to the sum of (i)
          and (ii) where

          (i)  is the estimated amount of OPEB claims paid during the period to
               the Group I and Group II Employees who retire after the Benefit
               Transition Date, together with their spouses or dependents,
               determined on the basis of average per contract claims costs for
               Ford salaried retirees; and

          (ii) is an allocable share of administration expenses based on ratio
               of OPEB Liability for Group I and II Employees to the total Ford
               salaried OPEB liability unless Ford and Visteon agree to another
               method.

          The Annual Cash OPEB Reimbursement shall be determined by the Ford
          Actuary; the Visteon Actuary will have the opportunity to verify the
          calculation.

     b.   Pre-Funding of SFAS 106 Liability. Visteon will establish and maintain
          a Voluntary Employees' Beneficiary Association, other tax-advantaged
          funded vehicle, such as a 401(h) medical account under a qualified
          pension plan, or a similar bankruptcy remote trust (collectively
          "VEBA") whose purpose is to reimburse the Plans in respect of the
          claims and administration costs described in Section 3.03a(ii) above.
          Visteon agrees that it will make a series of cash payments to the VEBA
          with the intent that by December 31, 2020 the assets in the VEBA will
          equal Visteon's balance sheet liability at the same date for OPEB
          benefits in respect of Group I and Group II Employees The cash payment
          to the VEBA shall commence no later than January 1, 2011 and shall be
          payable in advance

                                       17
<PAGE>   18

          in twelve equal monthly installments. The amount of cash paid to the
          VEBA in each year commencing no later than January 1, 2011 shall be an
          amount equal to the sum of (i), (ii) and (iii) where

          (i)  is the Visteon SFAS 106 expense for that year as computed by the
               Ford Actuary (and verified by the Visteon Actuary) and based on
               assumptions used by Ford for its salaried employees;

          (ii) is an allocable share of expenses as described in Section a (ii)
               above; and

          (iii)is the amount of Visteon's OPEB balance sheet liability in
               respect of Group I and Group II Employees at the beginning of
               each calendar year divided by the number of years remaining to
               December 31, 2020.

          Notwithstanding the above, Visteon may accelerate payments to the VEBA
          in its discretion. In the event tax law would not permit Visteon a
          current deduction for the level of funding described above, Visteon
          may make only such contributions to the VEBA that would be tax
          deductible, provided, however that the balance of the funding
          obligation which exceeds the permitted deduction is otherwise
          deposited into a separate trust. Visteon and Ford shall cooperate with
          each other to design, and Visteon agrees it will take necessary action
          to implement, an appropriate method approved by the Parties'
          respective auditors that would have the effect of eliminating Ford's
          FAS 106 OPEB balance sheet liability for Group I and Group II
          Employees beginning on the Benefit Transition Date. In the event that
          the tax benefits contemplated by the Parties as being available to
          Visteon with respect to prefunding of OPEB liabilities are not or
          cease to be available, Visteon and Ford agree to renegotiate the
          structure provided the new structure does not increase Ford's costs or
          jeopardize Ford's security. If Ford and Visteon cannot agree on a
          replacement structure, then Visteon will pay to Ford directly the
          payments it otherwise would have paid to the VEBA. Ford shall credit
          interest on such amount at the pretax rate of return on Ford's cash
          portfolio.

     c.   Recordkeeping. In connection with administering Section 3.03 (a)
          above, Ford may decide to retain a third party service to determine
          the correct amount of Visteon reimbursements according to the
          methodology set forth in this Section 3.03. If Ford decides to retain
          a third party service, Ford shall consult with Visteon prior to
          appointing a third party service, but Ford shall retain the right to
          appoint a third party service in its sole discretion. Ford shall pay
          the expense of such third party service and Visteon shall reimburse
          Ford for such expense.

                                       18
<PAGE>   19

          d.   Continuation of Arrangements. The terms set forth in this Section
               3.03 shall be in force until the last survivors and dependents of
               Group I and Group II Employees in service as of the Benefit
               Transition Date who are eligible for GRP retirement or OPEB
               benefits are deceased, or upon earlier termination agreed jointly
               by Ford and Visteon, including any VEBA or other arrangements or
               methods agreed in Section 3.03(b) (unless the Parties' respective
               auditors advise that joint agreement to terminate would
               jeopardize the expected accounting treatment of such arrangements
               or methods).

          e.   Ability to Substitute. The Parties may agree to substitute an
               alternative method of computing reimbursement under this Section
               3.03. The method substituted shall have as its objective to
               produce a fair estimate of the OPEB expense and other
               reimbursement charges set forth in this Section, and should
               preserve for each Party, to the extent possible, the economic
               benefits bargained under this Section.

          f.   Actuarial Verification. If the Ford Actuary and the Visteon
               Actuary are unable to agree on a verification, they shall jointly
               designate a third independent actuary whose verification shall be
               final and binding. Ford and Visteon shall each pay one-half of
               the cost of such third actuary.

3.04 U.S DEFINED CONTRIBUTION RETIREMENT PLANS.

          a.   Participating Subsidiary. Ford sponsors the Ford Motor Company
               Savings and Stock Investment Plan ("Ford SSIP") for the benefit
               of the employees of Ford and its participating subsidiaries and
               certain U.S. Ford Business Employees elect to participate in the
               SSIP. Effective on the Transfer Date, Visteon shall take such
               corporate action as is necessary to participate in the SSIP as a
               "Participating Subsidiary" as defined in the SSIP with respect to
               the U.S. Visteon Employees who participate in the SSIP until the
               Benefit Transition Date. Ford hereby consents to such
               participation by Visteon. Ford shall amend the SSIP to vest all
               U.S. Ford Business Employees who participate in the SSIP in the
               Ford matching contributions contained in their SSIP accounts as
               of the Benefit Transition Date.

          b.   Visteon SSIP. Effective on the Benefit Transition Date, Visteon
               shall establish its own defined contribution pension plan for the
               benefit of U.S. Visteon Employees that had participated in the
               SSIP that contains provisions substantially comparable to the
               SSIP, except that the number of investment elections may be
               reduced and the Ford Stock Fund election will be replaced with a
               Visteon Stock Fund election. The Visteon SSIP shall provide
               benefits related to contributions on or after the Benefit
               Transition Date. Within ninety days after the Benefit Transition
               Date, U.S.

                                       19
<PAGE>   20

          Visteon Employees who have accounts in the SSIP will be given a one
          time opportunity to transfer no less than the entire balance in such
          accounts to the Visteon SSIP. U.S. Visteon Employees who choose to
          continue to participate in the SSIP with respect to contributions made
          prior to the Benefit Transition Date shall be treated as terminated
          employees under the provisions of the SSIP. However, no distributions
          will be permitted until the U.S. Visteon Employee separates from
          Visteon employment or a successor employer. Plan loans will be
          permitted subject to the SSIP rules and U.S. Visteon Employees who
          have SSIP loans currently or who take new SSIP Loans after the Benefit
          Transition Date shall be issued coupon books for their loan
          repayments. Hardship withdrawals will not be permitted.

3.05 FLEXIBLE BENEFITS PLAN.

     Visteon shall establish a Flexible Benefits Plan for the benefit of U.S.
Visteon Employees who participated in the Ford Flexible Benefits Plan ("Ford
Flex Plan"), commencing on the Benefit Transition Date ("Visteon Flex Plan").
The Visteon Flex Plan shall include health care, life and accident insurance,
health care spending account, dependent care spending account, purchased
vacation, the legal plan, vision care and financial planning on terms identical
to those provided under the Ford Flex Plan for plan year 2000, and benefits
substantially comparable thereafter, and shall be designed to comply with the
requirements of Code Section 125 with respect to those benefits that are
eligible to be included in a Section 125 arrangement. For plan year 2000,
Visteon shall make available to U.S. Visteon Employees who participated in the
Ford Flex Plan at least the same amount of FCA dollars and Bonus Flex Dollars as
was made available under the Ford Flex Plan. For plan years commencing 2001
through 2003, Visteon shall make available to U.S. Visteon Employees who
participated in the Ford Flex Plan at least the same amount of FCA dollars as
was available under the Ford Flex Plan and the amount of Bonus Flex Dollars
shall be determined on the basis of the same formula as was applicable under the
Ford Flex Plan, but shall be based on Visteon's before tax return on sales.

3.06 SALARIED INCOME SECURITY PLAN.

     As of the Transfer Date, Visteon shall become a participating subsidiary
under the Ford Salaried Income Security Plan ("SISP"), and Ford hereby consents
to such participation. Effective on the Benefit Transition Date, Visteon shall
adopt its own severance plan with terms substantially comparable to those under
the Ford SISP. Ford's limit on liability under the SISP shall be reduced prorata
by the number of U.S. Global Visteon Employees. Effective as of the Transfer
Date, Visteon shall assume the liability for any U.S. Visteon Business Employee
who is receiving benefits under the Ford SISP. Ford shall retain the
responsibility for paying such benefit payments and continuing any applicable
insurance under the Ford SISP, and Visteon shall reimburse Ford annually for any
such cost.

                                      20
<PAGE>   21

3.07 ANNUAL INCENTIVE COMPENSATION PLAN.

     Global Visteon Employees who are otherwise eligible to participate in the
Ford Annual Incentive Compensation Plan ("FAICP") shall continue to be eligible
to participate under the same terms applicable to Ford employees after the
Distribution Date through December 31, 2000, with awards for 2000 payable in
March, 2001, provided that the pro forma award amounts, adjusted for Ford
performance, under the FAICP for such Global Visteon Employees shall equal 50%
of the adjusted target amounts. Adjustments for individual performance may be
made to the extent of 50% of the amount of the Extraordinary Contribution Fund
that would normally be allocated to the Visteon Employees. Visteon shall
reimburse Ford for any amounts paid to Global Visteon Employees for 2000 under
the FAICP. Visteon shall establish an interim bonus program for the remainder of
2000 following the Distribution Date for these Global Visteon Employees. If the
Distribution Date occurs prior to January 1, 2001, Visteon shall adopt a Visteon
Annual Incentive Compensation Plan ("VAICP"), subject to stockholder approval
effective January 1, 2001. The Global Visteon Employees who were otherwise
eligible to participate under the FAICP shall be eligible to participate under
the VAICP. If the Distribution Date occurs on or after January 1, 2001, the
Parties shall agree to alternate arrangements.

3.08 STOCK OPTION AND PERFORMANCE STOCK RIGHTS PROGRAMS.

     a.   Ford Stock Option and Performance Stock Rights Programs. Ford Business
          Employees who are eligible to participate in the Ford 1998 Long-Term
          Incentive Plan ("FLTIP") shall be eligible for grants of Ford stock
          options in March, 2000. In general, any options granted in March, 2000
          or in prior years under the FLTIP and the Ford 1990 Long-Term
          Incentive Plan to Ford Business Employees who become Visteon Employees
          continue and shall accrue until five years after the Distribution Date
          (provided that the Ford Business Employee had remained an employee of
          Ford or its Subsidiaries for at least three months after the date the
          option was granted) unless the option expires earlier or such
          employee's employment with Visteon terminates (other than due to
          disability, death or retirement with Visteon approval). Outstanding
          Ford Options designated as "incentive stock options" held by Visteon
          Employees will retain their tax attributes only if exercised within
          three months after the Distribution Date. Subject to approval of the
          Ford Compensation and Option Committee, Ford Retirees who received
          option grants in March, 2000 while employed by Ford but who retired
          from Ford prior to the date six months after the option grant date,
          shall be treated in accordance with the immediately preceding sentence
          with respect to

                                       21
<PAGE>   22

          those grants. Ford Business Employees who are eligible to participate
          under the FLTIP shall be eligible for grants of Ford Performance Stock
          Rights ("FPSRs") in the first quarter of 2000. Any grants of FPSRs to
          an eligible Ford Business Employee shall continue to be earned out and
          shall be paid out under the FLTIP as if such employee were still
          employed at Ford unless such employee's employment at Visteon
          terminates.

     b.   Visteon Stock Option and Performance Stock Rights Programs. Visteon
          shall adopt a Visteon Long-Term Incentive Plan ("VLTIP"), subject to
          stockholder approval and regulatory restrictions. The Visteon
          Employees who were otherwise eligible to participate under the FLTIP
          shall be eligible to participate under the VLTIP in those countries
          where it is practicable based on the number of employees and
          difficulty and cost to comply with regulatory requirements. Visteon
          shall make grants of Visteon stock options under the VLTIP to eligible
          Visteon Employees in March 2001, and shall make grants of Performance
          Stock Rights to eligible Visteon Employees in March, 2001.

3.09 U.S. PERFORMANCE BONUS PLAN.

     U.S. Global Visteon Employees who are otherwise eligible to participate
in the U.S. Ford Performance Bonus Plan ("FPBP") shall continue to be eligible
to participate under the same terms as applicable to Ford Employees after the
Distribution Date through December 31, 2000, with awards for 2000 payable in
March, 2001. Visteon shall reimburse Ford for any amounts paid to U.S. Global
Visteon Employees for 2000 under the FPBP. If the Distribution Date occurs prior
to January 1, 2001, Visteon shall adopt a Visteon Performance Bonus Plan
("VPBP") effective January 1, 2001. The U.S. Global Visteon Employees who were
otherwise eligible to participate under the FPBP shall be eligible to
participate under the VPBP. If the Distribution Date occurs on or after January
1, 2001 or later, the Parties shall agree to alternate arrangements.

3.10 U.S. DEFERRED COMPENSATION PLAN.

     Ford shall request the Ford Compensation and Option Committee to approve
effective as of the Transfer Date the participation of U.S. Visteon Employees in
the Ford Deferred Compensation Plan ("FDCP") and ability to make new deferral
elections under the FDCP until the pay ending immediately prior to the
Distribution Date. Visteon shall adopt a Visteon Deferred Compensation Plan
("VDCP") effective on the Distribution Date, and shall offer as an investment
option a Visteon Stock Fund. Any deferral of compensation on or after the
Distribution Date shall be made under the VDCP, even if the election to defer
was made prior to the Distribution Date, and unless the participant changes
his/her investment options for any such deferral, the VDCP shall honor any
investment elections that were in effect under the FDCP for such class year and
type of compensation to the extent the VDCP has the same investment choices. If
a U.S. Visteon Employee had made deferrals under the FDCP prior to the

                                       22
<PAGE>   23

Distribution Date, the book entry account balance of such employee's deferred
compensation account in the FDCP, valued as of 5:00 P.M. EST on the Distribution
Date, shall be transferred to the VDCP as of the Distribution Date ("Transferred
Accounts"). The Transferred Account balances may not be immediately available
for further transfer to VDCP investment options until account balances have been
properly verified by the plan administrators. Visteon shall cause the VDCP to
offer a Ford Stock Fund investment option for those Transferred Accounts that
had deferrals based on the FDCP Ford Stock Fund as of the Distribution Date, but
the VDCP Ford Stock Fund shall be a "sell" only fund, and would not be available
for any new deferrals or redesignations into such fund from other funds or for
credits based on dividend earnings. Visteon shall assume the liability with
respect to the Transferred Accounts and shall be responsible for making any
subsequent distributions in the form specified by the participant while employed
by Ford from the Transferred Accounts. If Visteon is unable to make
distributions from the Transferred Accounts at the end of any applicable
deferral period due to insolvency or otherwise, Ford shall make the appropriate
distributions. Ford shall have no responsibility with respect to any other VDCP
accounts.

3.11 NON-U.S. BENEFIT PLANS AND PROGRAMS.

     Unless provided otherwise in Schedule 3.11 attached hereto, Global Ford
Business Employees who participate in benefit plans and programs sponsored by
non-U.S. Subsidiaries or Affiliates of Ford, shall transition to the benefit
plans and programs of the non-U.S subsidiaries of Visteon as of the Benefit
Transition Date, except with respect to retirement liabilities as provided in
the next sentence. Ford shall retain liabilities for non-U.S. Ford Retirees as
of the Benefit Transition Date and Visteon shall assume liabilities for non-U.S.
Visteon Employees with appropriate asset transfers from funded plans. To the
extent there are any benefit plans or programs which are unfunded or
underfunded, Visteon shall assume the liability for the benefit payments in
respect of the non-U.S. Visteon Employees and Ford shall retain the liability
for non-U.S. Ford Retirees.

3.12 NON-EMBEDDED PLANS.

     Notwithstanding anything herein to the contrary, to the extent that Ford
has a Subsidiary or Affiliate that maintains pension, savings and or welfare
benefit plans separate and apart from the Ford plans, and such Subsidiary or
Affiliate becomes a subsidiary or affiliate of Visteon pursuant to the Master
Transfer Agreement, the plans of such Subsidiary or Affiliate shall remain the
responsibility of such Subsidiary or Affiliate, and no division or allocation of
such plans will occur as a result of such transfer on the Transfer Date. After
the Distribution Date, Ford shall have no responsibility attributable to a
parent corporation with respect to such plans, except as otherwise may be
required by law.

                                       23
<PAGE>   24
3.13 FUTURE BENEFIT CHANGES.

     Nothing contained herein shall be construed to prohibit Ford or its
Subsidiaries or Affiliates from amending, terminating or otherwise modifying the
terms of employee benefit plans or programs applicable to Global Visteon
Employees, Ford Retirees or Visteon Retirees, except as may otherwise be
provided by applicable law. Except as otherwise specifically provided herein or
by applicable law, no Global Visteon Employee, Ford Retiree or Visteon Retiree
shall have any vested right to any employee benefit plan or program sponsored by
Ford or its Subsidiaries or Affiliates. Except as provided in Sec. 3.01(b)(vi),
and as may be provided by applicable law, nothing in this Agreement shall
prohibit Visteon or its subsidiaries or affiliates from amending, modifying or
terminating benefit plans or programs applicable to Global Visteon Employees,
Visteon Retirees or any other Visteon retirees or employees.

                                   ARTICLE IV

                                VEHICLE PROGRAMS

4.01 U.S. LEASE AND EVALUATION PROGRAMS.

     Except as specifically provided herein, participation of the U.S.
Global Visteon Employees in Ford's U.S. Lease and Evaluation Vehicle Program
shall be terminated as of the Distribution Date. U.S. Global Visteon Employees
who participate in such programs shall be given a reasonable period of time
after the Benefit Transition Date not to exceed sixty (60) days or such other
time as the Parties mutually agree, to either purchase the vehicles leased or
assigned to them or to return them to Ford, or Ford's agents as provided below
("Vehicle Transition Period'). During the Vehicle Transition Period, Ford shall
offer for sale to each lessee and assignee of such vehicles as are presently
leased to such lessee or assignee under the terms of Ford's Used Vehicle
Purchase ("B") Plans, or to continue a lease under the terms of the Ford
Credit's Red Carpet Lease Plan, subject to credit evaluation and dealer
acceptance. In the event a lessee or assignee of a lease or evaluation vehicle
declines to purchase or continue to lease such vehicle within the Vehicle
Transition Period, the lessee or assignee shall return such vehicle to its
original servicing garage. Visteon shall collect, or shall cause its
subsidiaries or affiliates to collect, the applicable lease fee from the Global
U.S. Visteon Employees for such lease vehicles during the Vehicle Transition
Period. Visteon shall reimburse Ford in cash on a monthly basis, within ten days
of the last day of the month, an amount equal to (i) the aggregate amount on the
monthly lease fees for lease vehicles owed by U.S. Global Visteon Employees and
(ii) the aggregate amount of the monthly evaluation vehicle fees, determined on
the same basis as if the evaluation vehicles were lease vehicles, and paid by
Visteon. U.S. Ford Retirees shall continue to be eligible to participate in
Ford's U.S. Lease and Evaluation Vehicle Programs according to the terms of such
programs. Group I and Group II Employees

                                       24
<PAGE>   25

shall be eligible to participate in Ford's U.S. Lease and Evaluation Vehicle
Programs, if otherwise eligible under the terms of such Programs, on the same
terms as a Ford Retiree upon their retirement from Visteon or its subsidiaries
or affiliates.

4.02 NON-U.S. LEASE AND EVALUATION PROGRAMS.

     Participation of the Global Visteon Employees in Ford's Non-U.S. Lease and
Evaluation Programs shall terminate as of the Distribution Date, or such other
date as the Parties may agree. Ford shall cooperate with Visteon in providing
appropriate transition services comparable to those described in Section 4.01
with respect to the U.S. Lease and Evaluation Programs.

4.03 VEHICLE PURCHASE PLANS.

     U.S. Global Visteon Employees shall be permitted to participate in Ford's
Vehicle Purchase Plan consisting of the "A Plan" indefinitely. After the
Distribution Date, U.S. Global Visteon Employees shall not be eligible to
participate in Ford's "B Plan" (except as provided above in Section 4.01). After
the Distribution Date, U.S. Global Visteon Employees shall not be eligible to
nominate purchasers under the "X-Plan". Ford Retirees shall continue to be
eligible to participate in such plans after the Distribution Date according to
the terms of such plans.

4.04 U.S. SURVIVING SPOUSE CAR PROGRAMS.

     Visteon shall not be required to provide a benefit substantially comparable
to the U.S. Surviving Spouse Car Program after the Benefit Transition Date. Ford
shall have no responsibility to provide a benefit under the U.S. Surviving
Spouse Car Program to a spouse of any U.S. Global Visteon Employee who dies
after the Distribution Date.

                                    ARTICLE V

                            U.S. WORKERS COMPENSATION

     Visteon shall assume all liability for workers' compensation claims,
damages, expenses, liabilities or administrative expenses of any kind
whatsoever, related to U.S. Ford Business Employees regardless of when filed or
reported effective as of the Transfer Date. Visteon shall indemnify and hold
Ford harmless in respect of any such claims paid by Ford on Visteon's behalf
under any insured or self insured program operated by Ford. Effective on the
Distribution Date, and at such time as may be required thereafter, Visteon shall
transfer to Ford any reserves established in connection with claims which
applicable state workers' compensation laws require Ford to continue to pay on
behalf of Visteon. Effective on the Distribution Date, Ford shall transfer to
Visteon any reserves established in connection with claims for which Visteon
assumes payment responsibility to the extent allowed by state law and to the
extent

                                       25
<PAGE>   26

such reserves are not reflected on Visteon's balance sheet. Where transfer of
claim liability is prohibited by state law, Ford will continue to pay such
claims on Visteon's behalf and shall be reimbursed by Visteon as described
herein. Effective on 12:01 a.m. on the Distribution Date, Visteon shall cease to
be covered by any of the workers compensation liability insurance policies
sponsored by Ford or any self insurance program of Ford applicable to the U.S.
Ford Business Employees for injuries or occupational disablements occurring
subsequent to the Distribution Date. Visteon shall assume responsibility for its
allocable share of future retrospective premium adjustments for periods
preceding the Distribution Date. Visteon shall take all steps necessary under
applicable law to provide workers compensation coverage on or after the
Distribution Date, either through self-insurance where permissible under state
law or by the purchase of insurance. Visteon shall notify state and federal
regulatory agencies of the above. Visteon shall cooperate with Ford in obtaining
the return or release of all bonds, letters of credit, securities,
indemnifications, cash or other assets given by Ford to any state or federal
agency in connection with workers compensation self-insurance with respect to
U.S. Ford Business Employees, and to the extent required by any state or federal
agency, post its own bonds, letters of credit, indemnifications, securities,
cash or other assets in substitution therefor.

                                   ARTICLE VI

                              EMPLOYEE LIABILITIES

     Effective as of the Transfer Date, and except as otherwise provided under
the terms of this Agreement, Visteon will assume, and agrees to perform, the
debts, liabilities, guarantees, contingencies and obligations of Ford, whether
asserted or unasserted, fixed or contingent, accrued or unaccrued, known or
unknown, and howsoever arising, relating to the Global Visteon Employees. Ford
shall transfer any funded or unfunded reserves it may maintain with respect to
such liabilities, unless such reserves are reflected on the Visteon Balance
Sheet.

                                   ARTICLE VII

                                 INDEMNIFICATION

7.01 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,

                                       26
<PAGE>   27

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 a Global
Visteon Employee (or such employee's 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 or the employee benefit
plans or programs of a Visteon subsidiary or affiliate, whenever made,
including, without limitation, claims made to the PBGC, the DOL, or the IRS; or
(iii) employment claims of Global Visteon Employees whenever made based on
conditions or actions arising prior to or after the Transfer Date, except as
provided in Section 7.02 below (iii).

7.02 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 (i) arising out of breach of any agreement made by Ford hereunder; (ii)
any claim made by a Global Visteon Employee (or such employee's dependents or
beneficiaries) arising out of or in connection with the operation,
administration, funding or termination of any of the benefit plans or programs
sponsored by Ford (excluding any programs sponsored by Ford subsidiaries that
have been transferred to Visteon), whenever made, including, without limitation,
claims made to the PBGC, DOL or the IRS; or (iii) employment claims of Global
Visteon Employees that arise prior to or after the Transfer Date 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 or its subsidiaries or affiliates).

                                       27
<PAGE>   28

7.03 PROCEDURE FOR INDEMNITY.

     The procedure for indemnification under this Section 7 shall be the
same procedure as set forth in Section 7(C ) through (j) of the Master Transfer
Agreement and shall be incorporated herein by reference.

7.04 ASSUMPTION OF LIABILITY.

     As of the Transfer Date, Visteon will assume liability and
responsibility for all pending employment litigation by Global Ford Business
Employees transferred to Visteon pursuant to the terms hereof that relate to the
Business, provided, however that Visteon shall not assume any obligation or
liability and 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 cases
assumed, Visteon will have sole responsibility for deciding how to defend the
claims (e.g., whether to settle or litigate).

                                  ARTICLE VIII

                                  MISCELLANEOUS

8.01 DISPUTE RESOLUTION.

     If a dispute arises between the Parties relating to this Agreement, the
following procedure shall be implemented except that either Party may seek
injunctive relief from a court where appropriate in order to maintain the status
quo while this procedure is being followed:

     (a)  Initial Meeting. The Parties shall hold a meeting promptly, attended
          by persons with decision-making authority regarding the dispute, to
          attempt in good faith to negotiate a resolution of the dispute;
          provided, however, that no such meeting shall be deemed to vitiate or
          reduce the obligations and liabilities of the Parties or be deemed a
          waiver by a party hereto of any remedies to which such Party would
          otherwise be entitled.

     (b)  Mediation. If, within thirty (30) days after such meeting, the Parties
          have not succeeded in negotiating a resolution of the dispute, they
          agree to submit the dispute to mediation in accordance with the
          then-current Model Procedure for Mediation of Business Disputes of the
          Center for Public Resources and to bear equally the costs of the
          mediation. The Parties will jointly appoint a mutually acceptable
          mediator, seeking assistance in such regard from the Center for Public
          Resources if they have been unable to agree upon such

                                       28
<PAGE>   29

          appointment within twenty (20) days from the conclusion of the
          negotiation period.

     (c)  Arbitration. The Parties agree to participate in good faith in the
          mediation and negotiations related thereto for a period of thirty (30)
          days. If the Parties are not successful in resolving the dispute
          through the mediation, then the Parties agree to submit the matter to
          binding arbitration in accordance with the Center for Public Resources
          Rules for Non-Administered Arbitration, by a sole arbitrator.

     (d)  Procedure. Mediation or arbitration shall take place in the City of
          Dearborn, Michigan. Equitable remedies shall be available in any
          arbitration. Punitive or exemplary damages shall not be awarded. This
          clause is subject to the Federal Arbitration Act, 9 U.S.C.A. Section 1
          et seq., or comparable legislation in non-U.S. jurisdictions, and
          judgment upon the award rendered by the arbitrator, if any, may be
          entered by any court having jurisdiction thereof.

8.02 ASSIGNMENT.

     This Agreement has been executed in consideration of the Parties involved
and therefore may not be assigned or transferred to a third party without the
prior written consent of the other Party. This Agreement will be binding on the
agreed successors to or assignees of either Party. In no event will a Party be
released from their indemnity obligations without the prior written consent of
the other Party.

8.03 ENTIRE AGREEMENT, AMENDMENT, WAIVER.

     This Agreement embodies the entire agreement of the Parties and supersedes
any other agreements or understandings between them, whether oral or written,
relating to this subject matter. In the event of a conflict between this
Agreement and any other agreement between or among any of the Parties with
respect to the subject matter hereof, this Agreement shall control. No amendment
or modification or waiver of a breach of any term or condition of this Agreement
shall be valid unless in a writing signed by each of the Parties. The failure of
either Party to enforce, or the delay by either of them in enforcing, any of its
respective rights under this Agreement will not be deemed a continuing waiver or
a modification of any rights hereunder and either Party may, within the time
provided by applicable law and consistent with the provisions of this Agreement,
commence appropriate legal proceedings to enforce any or all of its rights.

8.04 NOTICES.

     Any notice or other communication hereunder must be given in writing
and either (a) delivered in person, (b) transmitted by facsimile transmission or
other

                                       29
<PAGE>   30

telecommunications mechanism, (c) sent by a nationally recognized overnight
courier service (delivery charges prepaid) or (d) sent by registered or
certified mail (postage prepaid, return receipt requested) as follows:

         If to Ford:
                           Ford Motor Company
                           Henry Ford II World Center
                           The American Road
                           Dearborn, Michigan 48121-1899
                                 Attention: Secretary
                                 Fax: (313) 248-7036

         If to Visteon:

                           Visteon Corporation
                           5500 Auto Club Drive
                           Dearborn, Michigan  48126
                                 Attention:  General Counsel
                                 Fax: (313) 390-2718

     All notices personally delivered shall be deemed received on the date of
     delivery. Any notice sent via facsimile transmission shall be deemed
     received on date shown on the confirmation advice. Any notice by registered
     or certified mail shall be deemed to have been given on the date of receipt
     or refusal thereof. The date of any notice by overnight courier service
     shall be the date the airbill is signed by the recipient. Any Party may
     change its address for the receipt of notices by giving Notice thereof to
     the other.

8.05 PARTIAL INVALIDITY.

     Any provision of this Agreement which is found to be invalid or
unenforceable by any court in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, and the
invalidity or unenforceability of such provision will not affect the validity or
enforceability of the remaining provisions hereof.

8.06 TITLE AND HEADINGS.

     Titles and headings of Sections and Subsections of this Agreement are for
convenience only and will not affect the construction of any provision of this
Agreement.

8.07 NEGOTIATED TERMS.

     The Parties agree that the terms and conditions of this Agreement are
the result of negotiations between the Parties and that this Agreement will not
be construed in

                                       30
<PAGE>   31

favor of or against any Party by reason of the extent to which any Party or its
professional advisors participated in the preparation of this Agreement.

8.08 COUNTERPARTS.

     This Agreement may be executed in counterparts, each of which will be
deemed an original, but all of which taken together will constitute one and the
same instrument.

8.09 GOVERNING LAWS.

     This Agreement is governed by the internal laws of the State of
Michigan.

8.10 THIRD PARTY BENEFICIARIES.

     This Agreement is for the sole benefit of the Parties hereto and no
third party may claim any right, or enforce any obligation of the Parties,
hereunder.

8.11 RELATIONSHIP.

     Nothing contained in this Agreement will be construed to make any of the
Parties partners, principals, agents or employees of the other, except as
explicitly provided. None of the Parties will have any right, power or
authority, express or implied, to bind any of the other Parties. For purposes of
this Agreement, Affiliate means any individual, partnership, corporation,
limited liability company, trust, or other entity directly or indirectly,
through one or more intermediaries, controlling, controlled by or, under common
control with a Party.

8.12 GOOD FAITH AND FAIR DEALING.

     In entering into this Agreement, the Parties each acknowledge and agree
that all aspects of the relationship among the Parties contemplated by this
Agreement, including the performance of all obligations under this Agreement,
will be governed by the fundamental principle of good faith and fair dealing.

8.13 CONSENTS, APPROVALS AND REQUESTS.

     Except as specifically set forth in this Agreement, all consents and
approvals to be given by any of the Parties or any of its respective Affiliates
under this Agreement will not be unreasonably withheld or delayed.

8.14 FURTHER ASSURANCES.

     The Parties will execute such further assurances and other documents and
instruments and do such further and other things as may be necessary to
implement and carry out the intent of this Agreement.

                                       31
<PAGE>   32

8.15. SALE OF VISTEON BUSINESS.

     If Visteon sells all or part of the assets comprising the Business after
the Distribution Date, and transfers Global Visteon Employees to a successor
employer in connection with the sale of such Business assets, Visteon shall
attempt to negotiate in good faith with the successor employer provisions with
respect to benefit comparability and pension security no less favorable than
those set forth in Section 2.04 and Section 3.01 b.(vi).

     IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as
of the day and year first above written.

FORD MOTOR COMPANY                  VISTEON CORPORATION

By:/s/ Malcolm Macdonald                By: /s/ Daniel R. Coulson
   ---------------------------------      ---------------------------------

Title: Vice President and Treasurer     Title: Executive Vice President and
      ------------------------------           ----------------------------
                                               Chief Financial Officer
                                               ----------------------------

                                       32

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