Wouldn’t offering them that much money just destroy the point of laying them off? I'm not that old so I don’t fully understand business. But that seems like it would be alot more then the workers actually made. I don't see how that is going to help them business wise. I'm not saying the workers don't deserve it but just how does it work business wise.
2007-02-27 14:41:02 · 7 answers · asked by Beaverscanttalk 4 in Business & Finance ➔ Corporations
No. A worker is a very, very expensive charge for any business. Think of pension contributions, benefits, bonuses, medical & child support expenses maybe, union fees, taxes, insurances -whether private or public, housing maybe, taxes, and a long list of etceteras.... it is not just the net (or the nominal) salary, but everything that comes with it, especially for a big company like Chrysler.
I understand their point of view, and people like us, who are employers, understand it better. An employee is just a charge in the present, and a possible liability in the future.
2007-02-27 14:48:18 · answer #1 · answered by zap 5 · 0⤊ 0⤋
In the long run they will save money.
Assume they leave for $100K. You may replace them with $50K new hires and in two years you break-even.
That's from a salary point of view. What about the new employee gets 2 weeks vacation and the long term ones had 6 weeks.
If they lay off people that means they have to take them back and cannot replace them with lower wage employees.
They are offering it to all employees but they probably have a 20% max that will accept it.
Also the ones that accept it means earlier retirement and therefor lower pension payout.
Trust me if it didn't make sense the company wouldn't do it.
2007-02-27 22:50:03 · answer #2 · answered by Johnny 5 · 0⤊ 0⤋
The reason that American auto companies are struggling is bcause they are paying most of thier profits out to retired workers in the form of pensions and health care. If they pay these workers to leave now, they save the hundreds of thousands it would take to insure them and give them retirement benefits. THis is a strategic long term business decision, that is also good for the workers, becaquse they can invest the money and still go elsewhere to work.
2007-02-27 22:48:35 · answer #3 · answered by Ron B 3 · 0⤊ 0⤋
For a company the size of Chrysler it will mean a short term pain as they pay this out, but they are looking at the future and the costs of reducing their working force by nearly 50,000 people, plus all the infrastructure that goes with it will definitely help them turn the corner, what they have to balance is ensuring that their sales continue at the current level to make the cost reductions effective.
One other thing, they will take this as a restructuring charge, hit the P&L once and move on.
Typical for the major corporations to do this,
2007-02-27 22:46:15 · answer #4 · answered by carlsberg72 3 · 0⤊ 1⤋
That is really stupid, considering the employers legaly do not have to offer the employees anything to lay them off. Maybe they are just being nice...You have to think though, these are not minimum mage jobs either these people are making $25-$120+ Per hour! It is not cheap labor...But ya $100,000 is a lot of money...I'd quit!!!!
2007-02-27 22:46:40 · answer #5 · answered by Jason 3 · 0⤊ 0⤋
My guess is that it will be in company stock. That way it wouldn't be as pricey to Chrysler. Plus the company is rumored to be in negotiations to be bought by GM. This way, Chrysler will be cheaper for GM to buy. I'll bet that GM suggested the buyout strategy as a condition of sale.
2007-02-27 22:45:23 · answer #6 · answered by pandjnewton 2 · 0⤊ 1⤋
they r looking long term. yeah its a bit of money now but it will pay off in the long term.
2007-02-27 22:43:55 · answer #7 · answered by bubba 4 · 0⤊ 0⤋