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Mitsubishi Motors workers in line for raise

by Megumi Iizuka

Kyodo

Mitsubishi Motors Corp. President Osamu Masuko says the automaker is considering raising employees’ pay and also resuming dividend payments for the first time in over 16 years in fiscal 2013, reflecting its recovery from a decade of slumping sales.

Asked during a recent interview with several news agencies about the possibility of pay raises, Masuko said the company “should certainly do so,” and that it should do whatever it can to help lift Japan out of chronic deflation.

“If we do not take a small step so as to lift Japan’s economy, automobile demand could shrink,” he said.

After a sales slump caused by the revelation in 2000 of vehicle defect coverups, MMC is expecting to post a record consolidated net profit of ¥100 billion for the current business year through March, aided by the yen’s slide.

Mitsubishi Motors’ labor union is demanding a wage hike of ¥3,500 at this spring’s wage talks. The move comes after Prime Minister Shinzo Abe urged companies to raise salaries to mitigate any adverse impact from the sales tax hike to 8 percent in April from the current 5 percent.

Under the leadership of Masuko, who has been president since 2005, the automaker has made progress in improving its financial standing after conducting a public stock offering in January to buy back preferred shares held by four group companies.

Earlier this month, the company announced Masuko will be replaced by Managing Director Tetsuro Aikawa in June, becoming chief executive officer and chairman. Masuko said in the interview that he will be assuming the new posts as investors have requested continuity in management.

He suggested he will remain involved in the company’s management at least until the end of fiscal 2016, the final year of the company’s three-year midterm business plan, saying, “I will keep fulfilling my responsibility” during the period of the plan.

In the plan, the automaker is aiming to sell over 1.4 million vehicles globally in fiscal 2016, up some 30 percent from the outlook in fiscal 2013, by introducing strategic models such as the Pajero Sport and RVR.

Masuko, meanwhile, denied that the firm, which places importance on emerging markets such as Thailand and Indonesia, where its brand has a strong presence, will withdraw from North America, where it is expected to incur an operating loss of ¥4 billion for fiscal 2013.

“We want to somehow make a turnaround in North America,” he said, adding, “For the turnaround there, we are expecting the plug-in hybrid vehicles to be one of the strong advantages.”

He said MMC plans to up the output ratio of plug-in hybrid electric vehicles and electric vehicles to 5 percent in fiscal 2015.