Eastman told the Times-News last Wednesday the company would offer voluntary separation to employees amid short-term challenges the company was facing due to slow global economic growth.
Two years ago, Eastman and Tennessee Gov. Bill Haslam announced Project Inspire with the centerpiece being a new global corporate business center, which is close to being completed on Wilcox Drive.
As part of the project, Eastman pledged to invest $1.6 billion in its Kingsport site and add 300 new jobs to its 6,000-plus workforce in Northeast Tennessee.
The comprehensive effort would enable the company to invest in, among other things, new growth opportunities, safety and environmental projects, increased warehouse capacity, building renovations and expansion of its corporate campus, according to Eastman.
The state agreed to provide funding to support the corporate campus expansion, road infrastructure improvements for the project, and money to meet advanced manufacturing training needs for the company through the Regional Center for Advanced Manufacturing located in downtown Kingsport.
In total, the state signed off on $30 million in economic incentives toward the project.
“This multi-year project will culminate in Eastman’s 100th anniversary in 2020,” former Eastman Chairman and CEO Jim Rogers said in 2013. “I can think of no better way to honor our long-term commitment to this site and surrounding community than through this very significant investment in our future.”
Of those incentives, $20 million was in the form of a grant contract made between the Kingsport Economic Development Board and the state to assist Eastman.
“Eastman is fully in compliance with their grant (contract),” said Clint Brewer, spokesman for the Tennessee Department of Economic and Community Development. “They have a number of years to complete the job creation, and they are well within the grant period to make up the jobs.”
Eastman Chairman and CEO Mark Costa told employees during a global town hall-style meeting last Tuesday that the company expects to reduce non-operations labor by up to 5 percent worldwide — which is about 300-350 employees. The company’s worldwide workforce is about 15,000.
“We expect to manage this primarily with a targeted voluntary separation program, not filling some open positions, and by leveraging normal attrition and performance management,” Eastman spokeswoman Tracy Kilgore said in an email the following day.
Kilgore, in a follow-up email, said the near-term challenges faced by Eastman are not a reflection of the strength of its growth strategy.
“We will continue to invest in growth even as we navigate through these challenges,” she promised. “This means that we will continue hiring, driving innovation, investing in our sites and supporting our communities. We will continue to meet the multi-year commitments we made through Project Inspire, including new job creation. The actions that we are taking do not impact this. As we have grown the company and acquired new businesses, we need additional new skills and expertise. We will continue to hire for these new roles, and as the company’s headquarters, you can expect that many of those jobs will be in Kingsport.”
Eastman hasn’t said publicly what the voluntary separation plan would be like for its workers, but Kilgore noted cost measures will be implemented globally, not just in Kingsport.
According to lawyers.com, buyouts and early retirement packages are structured in a similar manner, but there are important differences.
“Buyouts are typically offered to younger workers who will be seeking another job,” lawyers.com said. “Early retirement packages are typically offered to older workers who are nearing retirement age and might be willing to retire early. Under an early retirement package, for example, the employer may simply agree to start paying pension payments early. ... A buyout or early retirement package may include a lump sum payment or periodic payments for a set period of time. It may include your accumulated vacation pay and sick pay. A lump sum payment is more likely in a buyout than an early retirement plan. It may include health insurance for a limited period of time. It may also include employer stock or stock options. An early retirement package may offer to lower the minimum period of service required to be eligible for pension benefits — from 25 years to 22 years, for example.”
Eastman, meanwhile, continues to look for new hires in Kingsport and for its other locations. About 60 open positions are listed on the Careers portion of its website, www.eastman.com.
The company says employees can expect to know more in the next several weeks regarding the voluntary separation program.