Toyota Motor Corp (7203.T) said on Friday it is offering retirement incentives to about 2,000 U.S. workers, or 10 percent of its employees in the country, in an effort to manage attrition of its aging work force.
About 1,600 workers at the Japanese automaker's Georgetown, Kentucky plant, or about a quarter of the work force there, are eligible, Toyota spokesman Mike Goss said.
The rest of the eligible employees work at plants and offices throughout the United States, he said.
"We're trying to spread out the impact of the attrition over some time as opposed to the risk of them all walking away at the same time," Goss said.
Toyota began hiring people in Kentucky 25 years ago and the plant opened in 1988. The factory builds the Camry sedan, Venza crossover vehicle and Avalon large sedan.
The automaker employs about 20,000 people in the United States, including about 6,600 at the Georgetown plant that began production in 1988 and has an annual production capacity of 500,000 vehicles. Goss said they expect about 20 percent to 25 percent of those eligible to take the offer.
Employees who work 25 years at Toyota qualify for retirement with full medical benefits, pension and 401k pay, he said. The offer is also being made, however, to those who have worked at the company 22 years or more, and includes the ability for employees to purchase the years needed to qualify for full retirement. Goss declined to say what it costs for employees to purchase those years.
Under the offer, each worker will get a lump-sum payment equal to two weeks pay for every year of service, up to 25 years, plus eight additional weeks of pay, Goss said. In return, the workers would agree to leave on a schedule set by the company.
Toyota's plant employees are not unionized, but receive similar pay and benefits as those represented at General Motors Co(GM.N), Ford Motor Co(F.N) and Chrysler Group LLC by the United Auto Workers. Chrysler is controlled by Italy's FiatFIA.MI.
The retirement offer also will allow Toyota to reduce manufacturing labor costs as veteran workers typically earn about $26 an hour, compared with starting pay of around $16 an hour.
The retirement incentive offer was originally reported by the Wall Street Journal.