Honda Motors Rolls Out Retirement Scheme For Indian Employees; Offers Rs 5 Lakh To Quit Company
The challenges brought by the pandemic last year were so severe that even the big players ruling their respective sectors are still recovering from the losses. Honda Motor Co, one of the second largest manufacturers of two wheelers in India, is no exception.
Where a lot of companies are firing their employees for coping up with the losses, Honda has taken an interesting approach. The company is offering voluntary retirement to employees.
Is Honda Going Through A Rough Patch?
According to industry data, in the first eight months of the current fiscal year i.e from April to November 2020, Honda Motors sold 2.4 million units and experienced a fall of 32% in sales. Since the company manufactures 6.4 million automobiles yearly.
The losses have driven the company to shut one of its manufacturing plants in India. A drop of 25% in overall sales and constant pressure from rivals is not improving the situation for the Japanese manufacturer.
For Which Employees Is The Scheme Applicable?
The voluntary retirement scheme is offered to permanent employees who have worked for at least 10 years with the company. The offer is also applicable for employees aged above 40 years as of 31 January 2021.
A letter released by Honda said, “The Indian auto industry is going through an exceptionally challenging phase considering the prolonged demand slowdown and economic fallout from the coronavirus crisis,”
“In these uncertain times, we are aligning our production strategy for improved overall operational efficiency with the objective of long term business sustainability,” it added.
What Will These Employees Get?
According to the letter, a high end employee like a senior manager or vice president accepting the offer will get a payout of upto ? 7.2 million that is $98,488.
The company has also planned to give additional Rs 5 Lakh for the first 400 employees who will opt for the scheme. Currently, Honda has four plants with 7,000 employees working in India. The exact number of employees who can avail the scheme is unknown at present.
This initiative is another instance where Honda has showcased its amazing HR policies.