- Agreement sets benchmark for Japanese automotive industry
- Honda agrees with the union to raise wages by 5%
- Japan battles highest inflation in 40 years
TOKYO, Feb 22 (Reuters) – Toyota Motor Corp (7203.T), the world’s biggest automaker, said on Wednesday it would accept a union demand for the biggest base pay rise in 20 years and a raise bonuses as Japan moves forward. calls on companies to raise wages.
As one of Japan’s largest employers, Toyota has long been a bellwether for spring labor negotiations, which are in full swing at major corporations. Many are expected to conclude quickly as the government seeks anti-inflationary wage hikes to ease the burden on consumers.
The automaker’s new chairman, Koji Sato, said the decision to accept the union’s demands in full in the first round of talks was not just for Toyota, but “also for the industry as a whole.” , and in the hope that it will lead to frank discussions between the workforce and the management of each company.”
Hours after Toyota’s announcement, rival Honda Motor Co Ltd (7267.T) said it had accepted union demands for a 5% pay rise. The average monthly base salary increase of 12,500 yen ($92.70) at Honda is the largest since at least 1990.
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Toyota and the union federation representing 357,000 Toyota Group workers said the basic wage increase was the biggest in two decades, although they both declined to provide the percentage increase.
With inflation around 4% – the highest level in 40 years after decades of deflation – Japan is under more pressure than ever to raise wages in order to revive consumption.
But with the struggling economy – it avoided recession in the fourth quarter but grew far less than expected – analysts say wage increases will remain limited to big companies, such as Toyota.
Small and medium-sized businesses, which employ most Japanese workers, will struggle to afford wage increases, they say.
Toyota said its wage increase would also apply to part-timers and senior contract workers and that it had agreed to the union’s demand for one-off bonuses worth 6.7 months’ pay.
Takaaki Sakagami, deputy general secretary of the Toyota All Workers’ Federation of Trade Unions, said the union was pleased that they were able to quickly reach an agreement with the company.
The pay deal comes as Prime Minister Fumio Kishida has stepped up calls for business leaders to speed up pay rises, warning of a return to stagflation if wage increases are not enough to keep up with rapidly rising wages. price.
“We will stimulate consumption and expand domestic demand by encouraging efforts for structural wage increases,” Kishida told a session of the lower house budget committee on Wednesday.
Fast Retailing Co Ltd (9983.T), owner of clothing giant Uniqlo, said last month it would raise wages by up to 40%, fueling expectations that big manufacturers would offer more in annual wage talks with the unions this spring.
Video game maker Nintendo Co Ltd (7974.T) said earlier this month that it planned to raise workers’ base pay by 10%, despite lowering its profit forecast for the year whole.
($1 = 134.8500 yen)
Reporting by Maki Shiraki and Eimi Yamamitsu; Editing by Chang-Ran Kim, Bradley Perrett and Jamie Freed
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