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Allison wants fifth of hourly workforce to retire

December 23, 2008
Allison Transmission is urging 19 percent of its 2,200-strong hourly workforce to retire early by offering cash bonuses: $42,500 for production employees and $60,000 for people in skilled trades.

The company, a former division of General Motors Corp., announced the early retirement offer last week but declined to say how much of a reduction it needed. IBJ obtained some details of the plan from a flier circulated to members of United Auto Workers Local 933. The flier is a periodic report from Tim Snyder, chairman of the UAW's Speedway bargaining unit.

According to the flier, Allison will offer the buyout to as many as 257 production workers and 167 skilled trades people. To qualify, workers must have 30 years of service under their belts or their age plus years of service must total 85 or more.

A former division of General Motors Corp., Allison makes transmissions for trucks, buses, and military vehicles. It has its headquarters and three production plants on West 10th Street in Speedway.

With economic forecasts calling for a deep and prolonged recession, the company appears to be trying to prevent the need for layoffs. According to the UAW flier, the company originally hoped to reduce manpower through a normal rate of attrition. "However, sales forecasts for 2009 have been experiencing further deterioration and, therefore, attrition levels cannot be expected to keep pace."

General Motors sold the local division to private equity companies Onex Corp. and The Carlyle Group in August 2007 for $5.58 billion.

Toronto-based Onex reports on its Web site that Allison had revenue of $2 billion in 2007.
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