Toyota Motor Corp. is considering carrying out its first pay scale hike in six years this spring, sources said Friday.
The move comes as Prime Minister Shinzo Abe asks corporate managers to improve pay scales in order to help speed up economic recovery. A decision by Japan’s leading company is likely to influence many other firms, which are currently immersed in “shunto” spring wage bargaining.
Toyota Motor Workers’ Union demands a pay scale rise of ¥4,000 in terms of monthly salaries, and annual bonuses equivalent to 6.8 months’ pay.
The focus is on how much pay increase the labor union can win. The biggest amount achieved so far under the current negotiation system is ¥1,000.
Toyota fell into a consolidated operating loss in the year ending March 2009 due to the global financial crisis. The automaker’s profitability was also weighed on by massive automobile recalls in the United States between 2009 and 2010 and the March 2011 earthquake and tsunami in Japan.
These led the labor union to refrain from requesting a pay scale increase for four years in a row, until last year.
But now, Toyota forecasts a record operating profit of ¥2.4 trillion for the current year ending in March, thanks to the weakened yen’s positive effects on export performance.