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> A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by Oct. 1 Why do companies offer

> A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by Oct. 1 Why do companies offer early retirement incentives? Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money. Ford in particular would probably get some negative PR. And since the most expensive employees are older, they might try to sue you for age discrimination. Is it just risk mitigation, or does Ford actually benefit from the incentive? 10% might be too large of a change to do all at once, especially at Ford's size; so buying them off lets them get rid of people gradually without surprising people. I can understand why executives have to be bought off: They usually negotiate an accelerated stock vesting if they get fired without cause. What about anyone below that?

EliRivers 9y ago
I know that in the old days, the long long ago, companies would sometimes act in ways that benefitted their employees out of little more than just not wanting to screw them over completely. Basically just out of niceness and decency. Maybe the people at Ford are like these old-timers who tell me about such things. Also, I know that Ford certainly used to have a solid union. I wouldn't be surprised if they have workers who can't simply be instantly fired without cause and with cancellation of all benefits. Like some kind of worker's paradise.
sebleon 9y ago
What you described is a short term savings scheme that would destroy the company's long term reputation. Who would want to work for a management team that screwed employees like that? It's hard to imagine that the cost-savings justifying the long-term consequences of losing of the best employees + candidates to competitors.
badlucklottery 9y ago
>Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? That's a trick you can pull once. And after you do all of the skilled employees are going to be eyeing the door.
legitster 9y ago
Simple answer: Unions. They can't just layoff people without repercussions. Complex answer: Businesses that have been around this long have learned to survive by not making enemies. A tenant of this brand of capitalism is that it is cheaper to make mutually beneficial deals than to 'win'. Also, because the brand is so tied up in American identify, and many of their workers are their own consumers, they don't want to muddy the waters, especially if they expect to hire back some of the same workers again later.
- ph0rd 9y ago
  >Simple answer: Unions. They can't just layoff people without repercussions. salaried employees at ford aren't unionized, for the most part. The rest of this is correct.
Broken_Hippo 9y ago
Why do companies offer early retirement incentives? Because it is easier to reduce your workforce when folks choose to leave rather than if they go unwillingly. If you get enough reduction from this method, folks aren't as worried about their jobs. And i'm guessing in the long term, there are fewer disgruntled ex-employees. Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money. Possibly upfront, but not in the long run. The nearly retired folks are more likely to earn more money and will likely be retiring at some point anyway so a fair amount of the costs will be happening nevertheless. From what I've seen, usually there is a decent one-time bonus and possibly earlier earning on retirement. With regular firing, unions generally require the lowest seniority folks go first. Over time, this is actually more expensive with day to day operations because these folks tend to earn the least. Plus all the hits to the employee morale.
4c2383f5c88e911 9y ago
I like how open you are about doing class warfare, but destroying the small layer of ethics carefully woven on top of your business policy isn't a good plan in the long run.
CydeWeys 9y ago
I really hope that, for your and everyone else's sake, that you are not ever in a position of management at any company, seeing as this is the way you think about running a business and treating employees.
- MichaelBurge 9y ago
  You're reading too much into the comment. I'm just looking for a list of the drawbacks. Two of the ones mentioned(unions, and long-lived stable companies depend on their reputation more than usual) hadn't occurred to me.
DanHulton 9y ago
This is potentially the most sociopathic comment I've read on this site. Here's a reason: because it's an awful thing to do.
gozur88 9y ago
It's PR, but it's also protection from legal trouble. Typically when you give some kind of severance package you require the recipient to sign away any right to sue. Also, with large companies even during layoffs they're hiring for particular skilled positions. You don't want to get the reputation as an employer which mistreats its people.

EliRivers 9y ago

I know that in the old days, the long long ago, companies would sometimes act in ways that benefitted their employees out of little more than just not wanting to screw them over completely. Basically just out of niceness and decency. Maybe the people at Ford are like these old-timers who tell me about such things. Also, I know that Ford certainly used to have a solid union. I wouldn't be surprised if they have workers who can't simply be instantly fired without cause and with cancellation of all benefits. Like some kind of worker's paradise.

sebleon 9y ago

What you described is a short term savings scheme that would destroy the company's long term reputation. Who would want to work for a management team that screwed employees like that? It's hard to imagine that the cost-savings justifying the long-term consequences of losing of the best employees + candidates to competitors.

badlucklottery 9y ago

>Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? That's a trick you can pull once. And after you do all of the skilled employees are going to be eyeing the door.

legitster 9y ago

Simple answer: Unions. They can't just layoff people without repercussions. Complex answer: Businesses that have been around this long have learned to survive by not making enemies. A tenant of this brand of capitalism is that it is cheaper to make mutually beneficial deals than to 'win'. Also, because the brand is so tied up in American identify, and many of their workers are their own consumers, they don't want to muddy the waters, especially if they expect to hire back some of the same workers again later.

ph0rd 9y ago
>Simple answer: Unions. They can't just layoff people without repercussions. salaried employees at ford aren't unionized, for the most part. The rest of this is correct.

Broken_Hippo 9y ago

Why do companies offer early retirement incentives? Because it is easier to reduce your workforce when folks choose to leave rather than if they go unwillingly. If you get enough reduction from this method, folks aren't as worried about their jobs. And i'm guessing in the long term, there are fewer disgruntled ex-employees. Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money. Possibly upfront, but not in the long run. The nearly retired folks are more likely to earn more money and will likely be retiring at some point anyway so a fair amount of the costs will be happening nevertheless. From what I've seen, usually there is a decent one-time bonus and possibly earlier earning on retirement. With regular firing, unions generally require the lowest seniority folks go first. Over time, this is actually more expensive with day to day operations because these folks tend to earn the least. Plus all the hits to the employee morale.

4c2383f5c88e911 9y ago

I like how open you are about doing class warfare, but destroying the small layer of ethics carefully woven on top of your business policy isn't a good plan in the long run.

CydeWeys 9y ago

I really hope that, for your and everyone else's sake, that you are not ever in a position of management at any company, seeing as this is the way you think about running a business and treating employees.

MichaelBurge 9y ago
You're reading too much into the comment. I'm just looking for a list of the drawbacks. Two of the ones mentioned(unions, and long-lived stable companies depend on their reputation more than usual) hadn't occurred to me.

DanHulton 9y ago

This is potentially the most sociopathic comment I've read on this site. Here's a reason: because it's an awful thing to do.

gozur88 9y ago

It's PR, but it's also protection from legal trouble. Typically when you give some kind of severance package you require the recipient to sign away any right to sue. Also, with large companies even during layoffs they're hiring for particular skilled positions. You don't want to get the reputation as an employer which mistreats its people.