Japan's Big Three Reject Higher Pay for Workers
By Michelle Krebs March 18, 2009Toyota, Nissan and Honda rejected their unions' requests for higher wages and heftier bonuses for workers.
In Japan, salaries and bonuses are usually negotiated in the winter, in advance of the start of the new fiscal year on April 1. Typically, the companies grant whatever is requested for base pay and bonuses, but this year is different.
Japanese automakers have eliminated jobs, slashed production and scaled back profit forecasts, in some cases expected losses, as the global recession deepens and is hitting Japan particularly hard. Japan's gross domestic product is shrinking at a pace not seen since 1974 as exports plummet forcing cutbacks in vehicle production and wage declines.
Toyota expects to report its first operating loss since the Great Depression when the fiscal year ends March 31. Likewise, Nissan expects its first loss in nine years. Honda predicts a profit on the strength of its motorcycle business but one that is about 87 percent less than in the last fiscal year.
Toyota confirmed workers wanted to increase base wages by the equivalent of $41 a month. One Toyota executive told reporters the increased pay request "was far from reality, given the current economic situation and our business environment."
The three companies also refused the level of bonuses for workers that had been requested by the unions.
For the first time in a decade, Toyota is not going along with the bonus amount requested by the union. Honda has set the bonus for 5.5 months of pay from the asked-for five months. Nissan will give a bonus of 4.2 months of pay versus the requested 5.2 months.
In addition, Nissan has cut managers' bonuses by 35 percent and board members' bonuses by at least 50 percent for the next fiscal year beginning April 1. Nissan is also considering work-sharing arrangement cutting hours versus eliminating jobs. Toyota also cut manager bonuses.
Mazda and Fuji Heavy Industries, which makes Subaru cars, also refused increases in base wages for workers. Mazda is paying its lowest bonus ever of 4.06 months versus the asked-for 5 months. Fuji is giving 4.2 months in bonus instead of the requested 5 months.
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