Toyota Union Cites ‘Big Gap’ With Carmaker in Wage Talks

Toyota Motor Corp. (7203), the world’s largest automaker, faces a “big gap” in negotiations with its workers’ union in Japan, the labor group’s chairman said today.

“Our negotiation with the company is like a parallel line,” Mitsuyuki Tsuruoka, the head of the Toyota Motor Workers’ Union, said today at an event near the company’s headquarters in Toyota City, Japan. “We have had two rounds of negotiations so far, but there remains a big gap between us.”

The comments reflect potential challenges to Prime Minister Shinzo Abe’s push for companies to raise wages. Economic policies under Abe have weakened the yen and boosted earnings from exports and overseas sales, bolstering Toyota’s forecast that profit in the fiscal year ending this month will climb to a record 1.9 trillion yen ($18.7 billion).

Toyota’s labor union, representing more than 50,000 workers, has proposed a net 4,000 yen average increase in monthly wages and annual bonuses valued at 6.8 months’ salary, or about 2.44 million yen. The compensation being requested is “surprisingly high,” Senior Managing Officer Naoki Miyazaki told reporters Feb. 19 in Toyota City.

“At the third round of negotiation tomorrow, we will reiterate our standpoint on base salary and bonuses, and we will emphasize the efforts and hard work of union members,” Tsuruoka said today. The result of talks between the union and company are scheduled to be released next week.

Japan Hiring

Toyota plans to hire 1,350 employees in Japan for the fiscal year beginning April 1, the company said today in a statement. President Akio Toyoda has reiterated the carmaker will maintain production of at least 3 million vehicles per year at home as Nissan Motor Co. and Honda Motor Co. have scaled back reliance on Japan more aggressively.

More than 900 auto-industry unions have requested or are expected to ask for increases in base salaries, the most since 2008, according to Tamayo Tomita, a Japan Confederation of Automobile Workers’ Unions official. The average salary increase sought is about 1.3 percent, or 3,087 yen a month, while the average bonus request is 4.73 months’ worth of salary, according to a statement from the confederation yesterday.

Base pay excluding bonuses and overtime in January rose 0.1 percent from a year earlier, the first gain in 22 months, Japan’s labor ministry said today. Overall pay fell 0.2 percent, the first drop in three months. Abe needs sustained wage gains to help households cope with higher taxes and rising inflation.

Base Wages

This year is the first time in more than a decade that labor unions at all Japan’s carmakers are seeking an increase in base wages, which exclude overtime and bonus payments. They are all asking for yearly bonuses exceeding five months’ of salary, the first time in 15 years that unions have asked for the amount, Yasunobu Aihara, president of the Confederation of Japan Automobile Workers’ Unions, said last month.

Abe’s economic program, known as Abenomics, spurred a 51 percent advance in the Topix index of shares last year, and an 18 percent plunge in the yen versus the dollar.

In an interview in December, Abe said he wanted wages to rise more than prices. He said Feb. 17 it would be best if pay were to increase by 2 percent or 3 percent.

To contact the reporters on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net; Craig Trudell in Tokyo at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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