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Early Retirement Program
NTN Corp. (Japan) quickly received almost 800 applicants for a voluntary early-retirement program capped at 700 applicants.
The program was announced in early February, giving employees more than a month to evaluate their options before the one-week application period.
NTN described the program's background:
Since April 2002, NTN Corporation has been implementing NEW Plan 21 with the objectives of transforming our business structure and increasing corporate strength. As part of our personnel cost reforms, we have decided to offer an early retirement option to employees who would like to select employment outside NTN. Meanwhile, we are currently reviewing and analyzing the work content of all regular employees to encourage a shirt toward high added value in their work.
NEW Plan 21 is the acronym for NTN Evolution for Worldwide Plan 21, a two-year plan which aims to, "achieve profitability independent of scale through drastic cost-cutting measures and by concentrating managerial resources in high value-added fields." The four areas of NEW Plan 21 are: Strengthening Business Development Capabilities, Strengthening Profitability, Restructuring Production, and Enhancing Product and Equipment Development Capabilities.
• NTN's NEW Plan 21 (requires PDF reader)
The desired number of applications during the week-long application period was 700: 100 management positions and 600 "ordinary" positions.
To qualify, you had to be a regular NTN employee, between the ages of 40 and 50, with at least 10 years on the payroll. Their retirement date will be May 15, 2003.
NTN offered generous financial incentives to spur interest in the plan, on top of the standard outplacement assistance and ordinary retirement benefits. As the sweetener, early retirees under the program are entitled to up to 43 months' salary as an extra allowance.
NTN estimates the retirement pay and incentive package will cost ¥ 11 billion, applied as a one-time charge to its fiscal year just ended March 31, 2003.