While the overall health of the automobile industry has markedly improved in the last three years, with several manufacturers showing record U.S. sales, the companies are all looking to contain their mounting future costs and deal with an aging workforce.
With that in mind, Toyota Motor Corp. announced last week that it would be offering early retirement incentives to about 2,000 of its employees at its U.S.-based plants, where many of its cars and SUVs are assembled for the American market.
According to Reuters, the company says the retirement program has been created to begin to address the risks of the eventual depletion of an aging workforce. And, not coincidentally, to allow the company to circulate more new hires at lower wage rates.
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In the company's Georgetown, Ky. plant, where the Japanese automaker assembles the Avalon, Camry and Venza, about 1,600 employees will be eligible – approximately 25 percent of the current workforce. That plant opened in 1988.
"We're trying to spread out the impact of attrition over some time as opposed to the risk of them all walking away at the same time," said Toyota spokesperson Mike Goss.
Offers will also be given to many of the 20,000 workers employed at other American facilities.
Long-term Toyota employees can earn up to $26 per hour; new hires begin at rates about $16 per hour.
The deal would give employees the option to receive a lump-sum payment equivalent to two weeks' pay for each year of service, up to 25 years, plus an additional eight weeks of pay.
Twenty-five year Toyota veterans already qualify for retirement with a pension, full medical benefits and additional 401(k) benefits. The new offer is also being made to workers who have been with Toyota at least 22 years.
U.S. carmakers General Motors and Ford have also experimented with cost-saving changes to their retirement programs, offering one-time, lump-sum cash buyout offers to many retired and pre-retired white-collar workers.
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