Toyota offering early retirement packages for 2,000 US workers

Article by Anita Panait, on December 4, 2012

Toyota Motor Corp. is offering retirement incentives to around 2,000 workers in the U.S. as part of its efforts to manage the wear-and-tear of its aging workforce. According to Toyota spokesman Mike Goss, around 1,600 workers at Toyota’s plant in Georgetown, Kentucky – representing a quarter of the workforce in the site -- are eligible for the retirement incentives.

The remaining eligible workers are situated at plants and offices across the country, Goss revealed. The carmaker’s spokesman said that they are trying to spread out the impact of the attrition over some time, instead of having the affected employees walk away at the same time.

Toyota started hiring employees for the plant 25 years ago, with the factory opening in 1988. The Kentucky plant builds the Camry sedan, Venza crossover vehicle and Avalon large sedan.

Toyota currently employs around 20,000 workers in the US, including 6,600 employees in the concerned plant. Toyota has an annual production capacity of 500,000 vehicles.

According to Goss, Toyota expects around 20 percent to 25 percent of eligible employees to accept the retirement offer. Goss said that workers who have been with Toyota for at least 25 years qualify for retirement with full medical benefits, pension and a $401,000 pay.

The Japanese carmaker is also making the offer to employees who have been with the carmaker for 22 years or more. This offer includes giving employees the chance to purchase the years needed to qualify for full retirement.

Goss, however, did not say how much a qualified employee has to shell out to purchase those years. Under the offer, each employee will receive a lump-sum payment equal to two weeks pay for every year of service, up to 25 years, plus eight additional weeks of pay. In exchange, the employees would leave on a schedule set by Toyota.

Considered as one of the largest carmakers not only in Japan, but also in the world, Toyota Motor Corp. had its start in 1933 as a auto manufacturing division of Toyoda Automatic Loom Works. It was established by Kiichiro Toyoda as part of a company founded by his father, Sakichi Toyoda. Its creation was upon the egging of the Japanese government for Toyoda Automatic Loom Works to commence automobile production, since domestic vehicle manufacturing was badly required on the onset of the war with China.

In 1929, Toyoda went to Europe and the US to study automobile production. In 1934, Kiichiro’s department created its first product, the Type A engine. In 1936, the division built its first passenger car, the Toyota AA. In August 1937, the division was spun off from Toyoda Automatic Loom Works as an independent company – Toyota Motor Corp.

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