NAGOYA – Toyota Motor Corp. will likely agree to a base-wage hike that will top last year’s raise of ¥2,700 per month, sources close to the matter said, as the carmaker began annual pay talks with its labor unions.
The unions, along with those of other Japanese automakers, have requested a ¥6,000 monthly pay-scale hike, which Toyota has said is “impossible.”
Toyota, which is expecting another record profit for the business year through March, is likely to accept the labor unions’ call for a bonus equivalent to 6.8 months’ salary in the talks, amid pressure from the government of Prime Minister Shinzo Abe on Japanese firms to agree to pay hikes and help boost the economy.
Moves by the world’s biggest carmaker could affect other companies in the nation’s “spring offensive” wage talks, which will last through mid-March. Toyota will respond on March 18.
Last year the Toyota unions demanded a ¥4,000 pay-scale hike, only to get ¥2,700. Still, that was Toyota’s first base-wage hike in six years. It also agreed then to a 6.8-month bonus.
The unions’ request this year also includes a ¥7,300 rise based on seniority, bringing the total monthly pay increase to ¥13,300.
“I have to say that it is absolutely impossible to accept” the request, Tatsuro Ueda, Toyota’s managing officer charged with general administration and human resources, told reporters after Wednesday’s talks with the labor unions.
The monthly pay hike, if Toyota accepts a ¥6,000 base-wage increase, would add about ¥9 billion to its annual costs. Meanwhile, the bonus would add about ¥2.3 billion, Toyota said.
Abe’s repeated calls for pay hikes appears to reflect the government’s desire to spur a virtuous cycle in which higher salaries encourage consumers to spend more, stimulating growth at a time when private consumption has slumped following a sales tax hike in April last year.