Chrysler’s union worker buyout
Last week Chrysler announced information on their plan to reduce 13,000 workers between now and 2009. The first part of the plan was to entice 1,000 of their 2,000 salaried employees to leave by June 30.
Chrysler came up with two deals for the 2,000 salaried employees; the first is for the workers between the ages of 53-61, and the second is for the workers who are 62 and older. Both groups have to have a minimum of ten years working with the Chrysler Company. For those who are eligible will receive 100% of their healthcare plan medical credits. The workers who are of the age 62 and older, and meet all the requirements can receive the Special Early Retirement package. This package comes with a 3 months salary, and either a $20,000 tax deducted car voucher, or a $20,000 contribution to their retirement health account. For the salaried workers of a younger age Chrysler created Separation Incentive Program, which gives the option of an early retirement that waves any retirement benefit reduction.
Today Chrysler and the UAW (Union Auto Workers) revealed the second part of their plan that will help them buyout the other 11,000 employees.
The Chrysler Group and UAW agreed to two programs that will provide a retirement and separation incentive for the 11,000 hourly employees. The first program is called the IPR (Incentive Program for Retirement). This program allows hourly employees with 30 or more years with the company, to retire and receive a lump sum payment of $70,000. The second program, VTEP (Enhanced Voluntary Termination of Employee Program), is for any employee who has worked at least a year with the company. They can collect a lump sum payment of $100,000 for leaving the Chrysler Group.
If any of the employees were eligible for any of the programs they were notified via letter. These programs will “hopefully” persuade the 13,000 workers to leave the Chrysler Company voluntarily.