• Jiji, Reuters

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Labor unions representing staff at major Japanese automakers submitted their demands Wednesday for this year's shuntō spring wage talks, dialing down their requests as the novel coronavirus pandemic continues to hit the industry hard.

Labor unions at Honda Motor Co., Mazda Motor Corp. and Mitsubishi Motors Corp. did not seek pay-scale increases.

Toyota Motor Corp.'s labor union decreased its wage hike demand to an average of ¥9,200 per month, from the previous year's request for an increase of ¥10,100.

Nissan Motor Co.'s labor union also reduced its demand, calling for an average raise of ¥7,000 per month for regular employees.

The labor unions are scheduled to receive a response from management on March 17.

Many of the unions also reduced their demands for annual bonuses.

Toyota's labor union called for a bonus equivalent to six months' pay, a decrease of half a month from the previous year's request. Honda's union demanded a bonus equivalent to 5.3 months of pay, down 0.7 month.

At a news conference Wednesday, Akira Takakura, president of the confederation, said that labor representatives will continue to underline the need for investment in workers, including through wage hikes.

"Investment in workers is the foundation of competitiveness needed for overcoming difficulties," Takakura said, stressing the importance of realizing wage hikes despite the pandemic.

Although the auto industry has been hit hard by the spread of COVID-19, demand started recovering in summer last year mainly in China and the United States.

Since the beginning of this year, however, the industry has been facing a new challenge amid shortages of semiconductors used for electronic parts. In addition, a powerful earthquake that mainly affected the Tohoku region on Saturday has impacted the supply of some auto parts.

Automakers are also waging a fierce battle with information technology giants in the development of self-driving and other advanced technologies.

Nevertheless, Takakura indicated his determination to continue fighting for pay hikes, noting that "the pace of wage increases in Japan has been slow compared with other countries."

According to a recent Reuters poll, however, nearly three quarters of Japanese firms have no plan to offer blanket base pay hikes at this year's labor talks, with two-thirds keeping wages flat or cutting them as the pandemic hits earnings hard.

Three in five firms will keep the number of employees flat in the coming financial year, while a quarter intend to raise head counts and 17% plan to cut them, the Corporate Survey showed.

Many firms dismissed uniform base pay hikes as out of the question in the Feb. 2-12 poll due to slumping profits and future uncertainty amid the pandemic. Those who offer pay rises will do so to retain young and skilled workers.

"We won't raise base pay, to avoid increasing cost factors at a time when we can't even foresee the future," a manager at a steel-maker wrote in the survey.

A manager at a paper and pulp manufacturer manager wrote: "We'll do it to secure new employees and keep young workers from changing jobs."

The prospects for tough labor negotiations will likely prompt labor unions to prioritize job security over wage hikes, weakening momentum towards boosting the private consumption that makes up more than half of the economy.

The Corporate Survey, conducted for Reuters by Nikkei Research, canvassed 482 large and medium non-financial Japanese corporations on condition of anonymity to allow them to express their views more freely. Managers from roughly 220 firms responded.

Government data out last week showed wages fell 1.2% in 2020, with overtime pay tumbling 12%, as a state of emergency over COVID-19 and curbs on economic activity forced bars and restaurants to shut or cut hours to prevent the spread of the virus that causes the disease.

Keidanren, Japan's biggest business lobby, has shrugged off labor demands for blanket pay rises as "unrealistic" for pandemic-hit companies, while labor groups led by Rengo, an umbrella union confederation, have called for uniform base pay hikes of 2%.

Major firms offered pay hikes of 2% or more each spring for seven straight years through last year as the government pressured businesses to boost pay in order to quell deflation that has dogged Japan for two decades.

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