It looks like the push to EV is using the philosophy of “out with the old and in with the new” when it comes to company workforce as well. A new report reveals that 2 000 employees at Honda have applied for an early retirement package as the company restructures to make more electric vehicles.
As detailed by Nikkei Asia, this move from Honda is the latest among automakers to move away from the production and sales of internal combustion engines. The 2 000 employees account for around five per cent of Honda’s full-time staff in Japan. The early retirement program is open to those aged between 55 and 63 and offers a package of up to three years’ wages on top of retirement pay.
It’s understood that the Japanese manufacturer opened the program for its employees in April and completed it in July and has reported the application status to its labour union. Although Honda had not set a target, the number of applications has exceeded its initial estimate of 1 000. This is the first time in roughly 10 years that Honda has offered an early retirement package. Just about half of the applicants this time are under 60 and some have already retired at the end of July.
The brand’s move forms part of its plan to reduce reliance on older staff members as it speeds up the development of electrification and autonomous driving. In the longer term, the early retirement program will reduce fixed costs and improve profitability as its expenses in research and development increase due to the shift to EVs.
It’s understood that Honda has been carrying out structural reforms in recent years, such as closing plants in Japan and select international locations. At the end of March this year, Honda and its subsidiaries had 40 000 employees in Japan, excluding temporary workers and part-time workers.
It is expected to open its early retirement program over the next few years, with the ceiling age set at 59.