Toyota Unions Say Rift With Management Remains on Wages

Toyota Motor Corp. (7203), its parts makers and dealers continue to push back on union proposals to increase wages for workers in Japan, a top labor official said.

Some management for the companies have said they can’t meet requests because higher wages would increase costs and that employment should be prioritized, said Masamoto Azuma, chairman of the Federation of All Toyota Workers’ Unions, which is comprised of 312 unions that represent about 329,000 members.

“The management’s thinking is very distant from our requests, the rift has remained,” Azuma said yesterday in Toyota City, Japan. “This kind of management is just too selfish. They only speak from their own standpoint.”

The comments underscore tough negotiations between unions and companies pressured by Prime Minister Shinzo Abe to raise wages and bring an end to Japan’s deflation. Abe has urged pay increases as his economic policies have weakened the yen and boosted earnings from exports and overseas sales, driving Toyota’s forecast for a record 1.9 trillion yen ($18.5 billion) profit this fiscal year.

“Toyota’s decision is a sign for judging whether Prime Minister Abe’s growth strategy will work or not,” said Takeshi Miyao, a Tokyo-based auto analyst at Carnorama Japan. “Toyota has concerns because the domestic market will probably slow down after the increase in the consumption tax, and uncertainties remain in a lot of overseas markets.”

Photographer: Kiyoshi Ota/Bloomberg

Employees make a final inspection of Toyota Motor Corp. Lexus ES sedans on the production line of Toyota Motor Kyushu Inc.'s Miyata plant in Miyawaka City, Fukuoka Prefecture. Close

Employees make a final inspection of Toyota Motor Corp. Lexus ES sedans on the... Read More

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Photographer: Kiyoshi Ota/Bloomberg

Employees make a final inspection of Toyota Motor Corp. Lexus ES sedans on the production line of Toyota Motor Kyushu Inc.'s Miyata plant in Miyawaka City, Fukuoka Prefecture.

Wage Demands

The union representing more than 50,000 workers for the world’s largest automaker 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 proposal includes an average 7,300 yen increase in pay that workers receive based on seniority or promotions, which Toyota has agreed to in previous years.

“I feel they tried to get off with just praising union members’ contribution or efforts,” Azuma said of management’s position. “Will the union members trust the companies and work hard just because they paid the lip service? The members are not that trusting. Honestly speaking, I even feel angry.”

Toyota spokesman Brian Lyons didn’t immediately respond to an e-mail request for comment sent yesterday outside normal business hours.

The compensation being requested is “surprisingly high,” Senior Managing Officer Naoki Miyazaki told reporters Feb. 19 in Toyota City, where the company is based. Toyota Motor Workers’ Union head Mitsuyuki Tsuruoka, who represents the main union at the automaker, on March 4 cited a “big gap” with management after two rounds of negotiations.

The result of talks between Toyota and its union are scheduled to be released March 12. Azuma said he hasn’t given up hope that companies will fully meet their demands.

To contact the reporters on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net; Craig Trudell in Tokyo at ctrudell1@bloomberg.net; Ma Jie in Tokyo at jma124@bloomberg.net

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

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