The Canadian Auto Workers union expects more than 35% of its eligible members to take advantage of the voluntary retirement incentive offered by DaimlerChrysler Canada.

About 2,800 DCC workers face layoffs because of cuts outlined in DaimlerChrysler Corp.'s “turnaround” strategy. But CAW President Buzz Hargrove is buoyed by features of the incentive plan, the product of negotiations between company and union officials.

Mr. Hargrove is so optimistic, he says nearly half of the 2,000 workers eligible to take advantage of the plan, might choose do so. “We're certainly hoping for that,” he says.

This would reduce to about 800 the number of layoffs necessary to meet the company's target of a 20% workforce reduction.

The plan, worth up to C$90 million, offers eligible workers a one-time lump-sum payment of C$26,000, C$16,000 to be used toward the purchase of a selected Chrysler Group vehicle and an additional lump sum of C$10,500 to offset tax charges incurred from the vehicle purchase.

Eligible are workers who meet any of the following:

  • age 60 with 10 years of pension-credited service,

  • have 30 or more years of pension-credited service,

  • between 55 and 60 and who have a combined age and years of service totaling 85 or more.

Members of the United Auto Workers must meet the same criteria to qualify for their plan, details of which were revealed two days before the CAW plan was finalized. The UAW plan's pre-tax worth is $35,000 per worker — half of which must be used to purchase a Chrysler Group vehicle. The other half is a one-time cash payment.

Contrasted, the U.S. package is about $1,000 richer after factoring in taxes and currency exchange.

The UAW has no projections for how many of its workers might accept the offer.

Mr. Hargrove says the CAW deal also should send a signal to Ford Motor Co. and General Motors Corp. if they were to intiate layoffs. As with contract talks, Mr. Hargrove says DCC has set the pattern.