American Honda offers voluntary buyouts to senior employees
LOS ANGELES -- American Honda Motor Co. is offering voluntary severance packages to senior employees across its U.S. sales operation.
Employees who are 59 and older and have worked 15 years at the company are eligible for the Voluntary Retirement Program, Honda said in an internal memo dated March 9. Workers can apply until April 23, although Honda has the right to close the program at its discretion.
Honda spokesman Jeffrey Smith confirmed the offer today. A “relatively small” number of the 5,600 employees in Honda’s sales arm qualify to accept it, he said.
"Occasionally, we provide special acknowledgement of our tenured and dedicated associates by giving them the opportunity to retire early with some enhancements to their retirement plan," Smith said in an e-mail today.
Honda is rebuilding sales and production in North America as it recovers from the supply-chain disruptions created by last year’s earthquake in Japan and floods in Thailand.
The parent company’s fiscal third-quarter profits skidded 41 percent to $624 million, and the automaker has forecast a sharp drop in earnings for the full fiscal year that ends March 31. The strong yen is cutting into Honda's overseas profits.
One year's salary
Employees who take the buyout will receive one year’s base salary, a premium for each year of service, retiree medical coverage and COBRA dental and vision benefits, as well as other retiree benefits. The memo said Honda reserves the right to reject early-retirement applicants.
The memo also said the program is “entirely voluntary,” adding that Honda “has no plans to offer this program or any other similar program in the foreseeable future.”
Honda made a similar offer in April 2009, during the global economic collapse, to salaried and hourly manufacturing workers in North America. Eligible employees then had to be at least 55 years old andhave 10 years of service.
The automaker is counting on new models such as the CR-V crossover and Civic compact to boost earnings and lift global unit sales to more than four million vehicles in the next fiscal year. That would mark an increase of at least 27 percent from the 3.15 million unit sales it is projecting for the fiscal year that ends this month.
American Honda is counting on its Honda and Acura divisions to increase their U.S. sales by 25 percent this calendar year.
Mazda North American Operations last week offered voluntary buyouts to its 701 U.S. non-manufacturing workers as it tries to cut costs. Mazda, whose Japanese parent hasn’t made a profit in four years, said employees may be dismissed if the number of workers who take buyouts falls short of goals.
Arlena Sawyers contributed to this report.
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