Davis Polk & Wardwell LLP advised Ford Motor Company on modification of its payment obligations for retiree health benefits in connection with Ford’s ongoing efforts to improve its capital structure. Pursuant to a 2008 class action settlement agreement with International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), Ford agreed to fund a voluntary employees’ beneficiary association (VEBA) that will assume responsibility for providing retiree health care benefits to Ford retirees and their spouses and dependents on December 31, 2009. In light of economic conditions, Ford and the UAW agreed to amend the 2008 settlement agreement by smoothing out Ford’s payment obligations and providing Ford the option to use its common stock to satisfy roughly half of its future payment obligations to VEBA. The amended settlement agreement is subject to final approval in the class action and other conditions.

Headquartered in Dearborn, Michigan, Ford is one of the world’s largest producers of cars and trucks. Ford and its subsidiaries also engage in other businesses, including financing vehicles.

The Davis Polk team includes partners Donald S. Bernstein, Michael Kaplan and Mark M. Mendez and associates Yan Zhang and Marcel Fausten. All members of the Davis Polk team are based in the New York office.