Toyota has an enviable reputation among automakers for both its sales success and financial health. But like any large manufacturer with a sizeable and aging workforce, it is facing the rising costs associated with older workers. To help strengthen its financial footing, the company is offering an early retirement package to approximately 10 percent of its 20,000-strong U.S. workforce. The majority of the employees eligible for the offer are in manufacturing.
Approximately 1600 employees of Toyota’s Georgetown, Kentucky plant, the company’s largest in North America, are eligible, representing just under one-quarter of the total workers, are eligible. Employees that have worked for 25 years for Toyota are eligible for retirement with full medical benefits, pension and/or 401(k) pay. The early retirement offer is being extended to employees with more than 22 years with the company, with the option of purchasing the remaining years to qualify for full retirement benefits. The Georgetown plant builds the Camry, Avalon and Venza crossover.
Employees that take the offer will receive a lump-sum payment equal to two weeks pay for every year of service, plus eight additional weeks of pay. In return, employees must agree to leave by a date determined by the company. Senior line workers earn as much as $26 an hour, with new hires getting $16. Since the closing of the joint-venture NUMMI plant in California, Toyota’s manufacturing workforce in the U.S. is completely non-union, but workers receive comparable pay and benefits to UAW workers at other companies.