Ford Motor Co. recently announced plans to cut its white-collar work force by 10%, offering an early retirement option package.
Typically, these packages are offered to employees who are at least 55, with a certain number of years of service. The employee can accept or refuse the offer without any disrepute.
Many companies have offered these arrangements for years as a means of adjusting their work forces. So when Ford made its announcement, most of the media treated it as just another company going through yet another reduction. No big deal.
The Ford plan, however, as reported by the media, is different. Ford, this time, is offering the package only to people who are not promotable and people who have been stuck in the same job for a long time. It occurs to me that there could be a number of ramifications, unless Ford plans to handle it differently than has been reported.
In the first place it's repugnant, to say the least, for a company such as Ford that has proclaimed the importance of its employees, to publicly identify a person as a non-performer. Can you imagine how this person will feel when he has to explain to his family and friends that he got early retirement because he's a non-performer?
Most organizations have people now and then who don't perform well in a particular job, but often do a very good job in another. It happens all the time. It's like marriage - some don't work out and end in divorce. Later, the man and woman may marry someone else and things work out just fine.
How many times have you read that a CEO has been fired, only to be picked up by another company where he does an outstanding job? Lee Iacocca immediately comes to my mind, and I wouldn't have any problem naming a half-dozen more.
Or look at it another way: Let's say you get rid of all the non-performers and those who aren't promotable. All you have left are high achievers, all eager for promotion. But, there are only so many openings. To create more openings you must continually lower the retirement age. After awhile, all the vice-presidents will be 30-year-olds with master's degrees, but no experience.
I was in China when Ronald Reagan, then 68, was running for President. A Chinese minister asked if I thought Mr. Reagan was too young to be president of such a large country. So you see, age is in the mind of the beholder.
Anyone who has any knowledge of running a company will tell you that in any organization some people like what they're doing; they know their job; they're dedicated, hard-working and have no interest in being promoted.
All companies need these kinds of people. They provide stability, and you can depend on them for their knowledge and experience. You don't have to worry that they'll continually angle for a promotion and, if they don't get it, leave. Who would want an army where everybody wanted to be general and nobody wanted to be a foot soldier?
If you are wondering how this all came about, the answer is real simple: All of these early retirement programs at the automakers focus on people with 20 to 30 years' experience. These people take their early retirement, and many open their own shops or go to work for suppliers. Thus, a large part of the experience and knowledge that once existed in large corporations is now being transferred to suppliers.
People who are dedicated to their jobs and are not interested in being promoted provide the glue that holds an organization together. I attribute a large portion of my success to these hard-working folks, and I say three cheers for the average Joe and Jane.- Stephan Sharf is a former Chrysler Corp. executive vice president for manufacturing.
