Toyota Motor Corp. and Honda Motor Co., Japan’s two largest carmakers, rejected union requests for higher pay, as falling car sales and a stronger yen hurt earnings.
Toyota turned down the union’s demand for a base wage increase of 4,000 yen ($41) a month, it said in a statement today. Union wage requests to Nissan Motor Co., Japan’s third- largest carmaker, were also rejected. The three companies also rebuffed bonus amounts requested by the unions.
Japanese automakers have slashed jobs, production and profit forecasts as the deepening recession pushes demand for new vehicles to their lowest in almost three decades. Toyota, the world’s biggest carmaker, is trying to hold down costs after forecasting its first loss in 59 years amid the worst economic crisis since the Great Depression.
The request for higher pay “was far from the reality, given the current economic situation and our business environment,” Toyota Senior Managing Director Satoshi Ozawa told reporters in Toyota City in central Japan today.
Toyota will offer 1.86 million yen as an annual bonus, failing to meet the request from its union for the first time in 10 years. Its union last month requested annual bonus of 1.96 million yen on average.
Tokyo-based Honda offered an annual bonus equivalent to five months of pay. The carmaker’s union asked for 5.5 months of salary.
Manager Bonuses Cut
Nissan, which expects its first loss in nine years, offered workers 6,000 yen a month instead of the 10,000 yen the union requested, it said in a statement today. It will give a bonus of 4.2 months, compared with its union’s request of 5.2 months. The union represents Nissan 28,081 workers in Japan.
Tokyo-based Nissan will cut managers’ bonuses by 35 percent and board members’ bonuses by at least 50 percent next fiscal year beginning in April, Senior Vice President Hitoshi Kawaguchi told reporters in Tokyo today. The company is also considering work-sharing arrangements, involving fewer working hours to avoid job cuts, Kawaguchi said.
Toyota next fiscal year will also cut manager-level bonuses in line with workers’ pay, Ozawa said.
Economy
Japan’s gross domestic product contracted at the fastest pace since 1974 last quarter as exports and output collapsed. Wage declines have accelerated for three months as companies including Toyota and Honda pare production and overtime.
The auto industry employs 5.01 million people, or 7.9 percent of total workforce in Japan, according to the Japan Automobile Manufacturers Association. Employers include vehicle makers, parts suppliers, gasoline stand operators and repair shops.
The wage talks only affect domestic, full-time workers. Toyota’s labor union has 58,662 members. The union at Honda represents 40,451 employees and Nissan’s union has 28,081 members.
In Japan, companies and union members typically negotiate in February and March to decide base salaries and bonuses.
Mazda Motor Corp., an affiliate of Ford Motor Co., and Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, turned down union demands for a base wage increase of 4,000 yen. Mazda will grant a bonus of 4.06 months pay, the lowest ever, the company said today. The union had requested 5 months pay.
Fuji Heavy will give 4.2 months pay as bonus, compared with a request for 5 months pay.
Source: Bloomberg
Toyota turned down the union’s demand for a base wage increase of 4,000 yen ($41) a month, it said in a statement today. Union wage requests to Nissan Motor Co., Japan’s third- largest carmaker, were also rejected. The three companies also rebuffed bonus amounts requested by the unions.
Japanese automakers have slashed jobs, production and profit forecasts as the deepening recession pushes demand for new vehicles to their lowest in almost three decades. Toyota, the world’s biggest carmaker, is trying to hold down costs after forecasting its first loss in 59 years amid the worst economic crisis since the Great Depression.
The request for higher pay “was far from the reality, given the current economic situation and our business environment,” Toyota Senior Managing Director Satoshi Ozawa told reporters in Toyota City in central Japan today.
Toyota will offer 1.86 million yen as an annual bonus, failing to meet the request from its union for the first time in 10 years. Its union last month requested annual bonus of 1.96 million yen on average.
Tokyo-based Honda offered an annual bonus equivalent to five months of pay. The carmaker’s union asked for 5.5 months of salary.
Manager Bonuses Cut
Nissan, which expects its first loss in nine years, offered workers 6,000 yen a month instead of the 10,000 yen the union requested, it said in a statement today. It will give a bonus of 4.2 months, compared with its union’s request of 5.2 months. The union represents Nissan 28,081 workers in Japan.
Tokyo-based Nissan will cut managers’ bonuses by 35 percent and board members’ bonuses by at least 50 percent next fiscal year beginning in April, Senior Vice President Hitoshi Kawaguchi told reporters in Tokyo today. The company is also considering work-sharing arrangements, involving fewer working hours to avoid job cuts, Kawaguchi said.
Toyota next fiscal year will also cut manager-level bonuses in line with workers’ pay, Ozawa said.
Economy
Japan’s gross domestic product contracted at the fastest pace since 1974 last quarter as exports and output collapsed. Wage declines have accelerated for three months as companies including Toyota and Honda pare production and overtime.
The auto industry employs 5.01 million people, or 7.9 percent of total workforce in Japan, according to the Japan Automobile Manufacturers Association. Employers include vehicle makers, parts suppliers, gasoline stand operators and repair shops.
The wage talks only affect domestic, full-time workers. Toyota’s labor union has 58,662 members. The union at Honda represents 40,451 employees and Nissan’s union has 28,081 members.
In Japan, companies and union members typically negotiate in February and March to decide base salaries and bonuses.
Mazda Motor Corp., an affiliate of Ford Motor Co., and Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, turned down union demands for a base wage increase of 4,000 yen. Mazda will grant a bonus of 4.06 months pay, the lowest ever, the company said today. The union had requested 5 months pay.
Fuji Heavy will give 4.2 months pay as bonus, compared with a request for 5 months pay.
Source: Bloomberg
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