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Lexington, KY - Toyota Motor Manufacturing Kentucky (TMMK) employees who have been with the automaker since the late 80s are being offered a voluntary exit incentive. With increased attrition among these employees anticipated over the next two years, the company has announced a “Next Step Program” designed to manage the turnover.
Nearly 2,000 Toyota employees in the U.S. who will have at least 22 years of service by March 31, 2013 qualify for the program. Of those eligible, 1,600 of them are based in Kentucky, established in 1986 and is the carmaker’s largest North American operation.
Rick Hesterberg, TMMK’s Manager of External Affairs/Community Relations, said the company anticipates that between 20 and 30 percent of eligible employees will accept a package that includes 2 weeks of pay for every year of service, (capped at 25 years of service) plus an additional 8 weeks of pay. Employees with at least 25 years of service qualify for 100-percent of company provided medical benefits. All who choose to leave will be replaced, he said.
“I don’t want anyone thinking we’re downsizing or shrinking the workforce, we’re not, we’re going to replace these people. We see a spike in the levels of attrition heading our way these next two years and we’ve come up with this program to help us manage through that and kind of maybe spread out the departures we anticipate seeing over the next couple of years,” he told Business Lexington.
Hesterberg said plans call for using the company’s existing staffing systems to replace those who leave. “For example, the transfer system will support internal movement of team members and we have variable workforce that we can convert to TMMK Team Members to backfill resulting open positions. Over the years, we have hired hundreds of full time team members from our Variable Workforce Program,” he said.
“We don’t want these people to level, but common sense tells you when you have a workforce that is getting to the 25-year mark, some of these people are going to start saying ‘I’m done, I’m ready to go.' It’s just reality. We’re not trying to buy them out. We’re trying to manage for what we think is inevitable, and that’s the loss of some of our veteran team members that have helped us become so successful over the years,” he said.
Those eligible will have to inform Toyota of their interest in the program by early January and then will have the option of leaving on set dates starting in February and others hitting seasonally through the beginning of 2014.