Toyota Motor Corp., the nation’s largest manufacturer and employer, says the wage increases labor unions have demanded going into annual negotiations this year are “surprisingly high.”
The carmaker will wait until the negotiations are finished before saying whether it will agree to the requests, Senior Managing Officer Naoki Miyazaki told reporters Wednesday in Toyota, Aichi Prefecture. He said improvement in the economy and the need to boost personal spending will be considered in the talks.
Toyota reported this month that profit quintupled last quarter and raised its forecast for the year ending March 31 to an unprecedented ¥1.9 trillion, as economic policies under Prime Minister Shinzo Abe weakened the yen and boosted earnings from cars exported out of Japan.
Abe has urged firms to hike pay faster than gains in the cost of living, as rising consumer prices risk undermining his public support.
Toyota’s labor union, representing more than 50,000 workers, is negotiating for a net ¥4,000 average increase in monthly wages and annual bonuses valued at 6.8 months’ salary, or about ¥2.44 million. Toyota will announce a final plan in March.
Toyota Motor Workers’ Union said in a statement that its proposed demands take into account workers’ efforts, the improving economy and the consumption tax increase in April.
Toyota agreed last year to a union proposal for a 2013 average bonus of about ¥2.05 million, the biggest in five years. It paid a ¥2.51 million bonus in 2008.
A ¥1 salary rise costs the carmaker more than ¥2, Miyazaki said. That’s because higher base pay raises the firm’s costs for benefits, including insurance, he said.