It's been nearly 25 years since Toyota began operations at its first U.S. plant, in Georgetown. And since 25 years of service also marks the time when employees can receive full retirement medical benefits, the automaker is expecting many of its most veteran employees to retire in the next two years.
In hopes of managing that attrition, the company announced Thursday a retirement incentive program that will offer about a year's pay for eligible employees if they agree to retire in intervals determined by the company.
"When we were hiring at the start, we had to hire in high volumes to get up and running, so we knew one day we would be faced with the potential situation of many of those people exiting our company around the same time," said Toyota spokesman Rick Hesterberg. "That day is upon us. We've come up with a unique program to help us manage what we think will be escalating attrition rates because we don't want to have our ranks depleted.
"It makes it easier to manage when we can bring people in, have them trained and have them ready to go in a more orderly fashion."
Called the Next Step Program, the retirement incentive is open to nearly 2,000 Toyota employees in North America with at least 22 years of service as of March 31, 2013. Around 1,600 of those are in Georgetown, and many of the remainder are employees who started in Georgetown and have since moved to other plants.
Those enrolling in the program will receive a one-time cash payment equal to two weeks of pay for every year of service (capped at 25 years), plus an additional eight weeks of pay. For the most senior employees, it would equal 58 weeks of pay.
The employees retiring would leave the company in staggered intervals beginning in February 2013 and then also in May, August and December 2013, as well as January 2014.
Hesterberg said the company intends to fill all the positions that will be opened. Georgetown will hire for its full-time openings from its group of temporary workers and then bring on more employees for that pool, he said.