• Kyodo

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Many major Japanese firms were reluctant to offer base pay hikes during annual wage talks held Wednesday, with Toyota Motor Corp. forgoing its uniform monthly pay-scale increase for the first time since 2013 as coronavirus jitters pervade.

The decisions over wages could further hurt household spending and the nation’s economy, which is already on the edge of a recession after it shrank in the October-December quarter after private consumption was dented by a consumption tax hike on Oct. 1.

Toyota, a benchmark in wage talks, offered a raise of an average ¥8,600 a month per employee but did not include base pay hikes in the figure for the first time in seven years.

Its union had demanded a raise of ¥10,100 on average, including hikes in regular wages based on a worker’s age or length of employment as well as base pay. Meanwhile, Toyota offered bonuses worth 6.5 months of pay, in line with the labor group’s request.

Nissan Motor Co. offered a monthly average increase of ¥7,000 per employee, less than the ¥9,000 demanded by its labor union. It did not disclose base pay figures.

In addition to the long-running U.S.-China trade dispute and the consumption tax hike from 8 percent to 10 percent, the global spread of the new coronavirus has dealt a blow to automakers, disrupting supply chains and forcing some factories in China to suspend operations.

Nippon Steel Corp., JFE Steel Corp. and Kobe Steel Ltd. also decided against awarding base pay hikes for the first time in seven years as the steel industry struggles with falling demand from the shrinking domestic market.

In the electronics sector, Panasonic Corp. offered a total raise of ¥1,000 per employee, including rises in base pay and pension-related benefits, while Mitsubishi Electric Corp. and Fujitsu Ltd. each offered a ¥1,000 increase in base pay.

The electronics makers did not give a uniform response to labor unions after the Japanese Electrical, Electronic & Information Union, for the first time, decided to accept different responses depending on the state of each company’s business and other factors, while requesting a base pay rise of ¥1,000 or more.

Daikin Industries Ltd., a maker of air conditioners, has suspended wage negotiations as the coronavirus outbreak has clouded its business outlook. The operation of the company’s production bases in China has been affected by the epidemic, its officials said.

The reduced focus on lifting base pay uniformly comes as Keidanren, the country’s most powerful lobby, has called for a review of the nation’s wage system that grants automatic pay increases on the basis of employees’ age or length of service, rather than on performance.

In recent years, monthly base pay hikes have picked up in some industries following Prime Minister Shinzo Abe’s repeated calls for wage increases to spur private consumption and fight chronic deflation.

Last year, major companies boosted wages by an average 2.43 percent, or ¥8,200 a month, following the spring wage negotiations, topping 2 percent for the sixth straight year.

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