Chrysler, Ford Offer Workers Incentive for Early Retirement
March 28, 2011
DETROIT -- Chrysler Corp. and Ford Motor Co. are stepping up efforts to cut costs by encouraging salaried employees to take early-retirement buyout offers. Chrysler disclosed it is offering an early-retirement package to about 1,200 salaried, nonunion employees. Chrysler said the buyout could cost it $50 million to $100 million this year, depending on how many employees accept, and would be taken against third-quarter earnings. Ford said it is expanding its early-retirement efforts beyond the 500 senior managers it had targeted to include middle managers and administrative personnel. The total size of Ford's buyout is expected to come to about 2,000 people. Ford said any charge from its buyout offer would be taken against earnings in the second half. The size would depend on how many workers accept the offer, it said, but it didn't elaborate. General Motors Corp., meanwhile, is continuing its practice of offering annual buyout packages to white-collar employees. GM's program this year was begun in April, but GM isn't saying how many will be covered by the buyouts. The Big Three auto makers have been restructuring in recent years to concentrate more on core auto-making activities, as well as trying to boost overall productivity. ``This is a planning tool for the future needs of individual departments,'' a Chrysler spokesman said. ``We are always trying to improve the way we do things through process redesign. And as you improve your business process, you may find you don't need as many people.'' Chrysler said its early-out program is aimed at nonunion, salaried employees who will be at least 54 years old with 10 years of experience by year end. The No. 3 U.S. auto maker employs 19,000 salaried, nonunion employees in the U.S. and 1,400 more in Canada. Employees who take the package will get credit for an additional three years of service and an additional three years of age, sweetening retirement pay. Also, these employees won't incur reductions to their pensions or benefits by retiring early, a company spokesman said. Most of those who accept the offer, which Chrysler expects to be primarily in staff-support positions, must decide by April 12, 2011 retire by year end. Chrysler said it isn't sure how many employees will apply for the special retirement deal, but the company said it offered the same package in 2009 to 900 employees and 380 of them accepted. Ford, the No. 2 U.S. auto maker, is targeting its voluntary early-retirement and special separation packages for selected salaried employees in the U.S. A spokeswoman said similar programs may be offered in other countries later to help Ford reach its target. Ford has about 80,000 salaried employees world-wide. ``These programs will help us get our salaried employment at the right work level, considering that we are becoming more efficient in the way we operate our business,'' the Ford spokeswoman said, adding that Ford has no plans to lay off salaried employees. No. 1 GM calls its program a ``career transition'' package and said it is similar to programs that have been routinely offered to white-collar employees since the early 1990s. GM's U.S. salaried work force now stands at 67,000, down from a high of 90,000 at the end of 1990.
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