Japan steel makers consider pay hike of ¥2,500 a month

JIJI

Major Japanese steel makers are considering putting forward a pay hike of ¥2,500 per month for fiscal 2016 as the shunto wage negotiations enter their final stage, it was learned Thursday.

The envisaged figure is higher than the ¥2,000 agreed for fiscal 2014 in previous negotiations with labor unions, but lower than the ¥4,000 a month being sought by unions for the coming two fiscal years.

While the unions are aiming to win a larger amount for the coming two years, companies are cautious, citing a severe business environment.

The two sides are seen continuing tough negotiations toward Wednesday when steel makers, including Nippon Steel & Sumitomo Metal Corp. and JFE Holdings Inc., are scheduled to submit their pay proposals to the unions.

The shunto talks in the steel industry cover two years, instead of one year in many other industries.

Concerned that the gaps in wage levels between their own industry and other sectors, such as automakers and electronics makers, could expand, steel maker unions are demanding a monthly pay hike of ¥4,000 for each of fiscal 2016 and fiscal 2017.

But the business climate surrounding the steel industry is increasingly tough as global steel prices are on a downtrend due to overproduction by Chinese steel makers.

At Nippon Steel & Sumitomo Metal, Japan’s largest steel maker, consolidated net profit in fiscal 2015, which ends this month, is projected to slump 34.7 percent from the previous year to ¥140 billion.