GS69

BloomBerg
Feb. 13 (Bloomberg) -- Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.'s labor unions in Japan asked for more pay as the automakers forecast higher earnings.

Toyota's union requested a bonus of 2.53 million yen ($24,000), down 50,000 yen from a year ago, the company said in a release today. It also asked for an increase of 1,500 yen in monthly pay. Honda's union asked for a bonus equivalent to 6.6- months of wages and an increase of 1,000 yen in monthly salary.

Toyota, Honda and Nissan, Japan's three biggest automakers, have forecast higher earnings for the full business year. The companies' management may be reluctant to meet demands for higher pay, as a stronger yen and a U.S. economic slowdown are expected to squeeze their profits.

`` I would expect a token increase will be given,'' said Edwin Merner, who oversees $2 billion as president of Atlantis Investment Research Corp. in Tokyo. ``But the mood now is not to increase wages much.''

Nissan's union asked for an annual increase of 7,000 yen and a bonus equivalent to 6.1 months of salary, Tokyo-based Nissan said in a statement.

Toyota fell 1.7 percent to 5,870 yen at the 3 p.m. close on the Tokyo Stock Exchange. Nissan rose 0.5 percent to 923 yen. Honda dropped 1 percent to 3,130 yen.

Union Members

Japan's auto industry employs 4.95 million people, or 7.8 percent of the country's total workforce, according to the Japan Automobile Manufacturers Association. The jobs vary from manufacturing to sales and maintenance.

``Considering the importance and competitiveness of the car industry, we are entitled to higher wages,'' said Yuji Kato, president of the Confederation of Japan Automobile Workers' Unions.

Toyota's Japan labor union has 57,849 members. Honda's union has 40,084 members and Nissan's union has 28,874.

Toyota and Honda forecast their fourth-quarter earnings to decline because of a stronger yen. Toyota based its estimates for fourth-quarter earnings on an exchange rate of 105 yen to the dollar, compared with 119 yen in the same period in 2007.

``Bonuses will total 150 billion yen and the amount is not easy to pay out'' Satoshi Ozawa, a senior managing director, said at a press conference at Toyota's headquarters in central Japan's Toyota City. The automaker on Feb. 5 reiterated its forecast for net income will rise 3.4 percent to 1.7 trillion yen in the year ending March 31.

``Because of rising oil prices and the subprime mortgage problem, we will respond cautiously,'' Nissan Senior Vice President Hitoshi Kawaguchi said at a press conference in Tokyo.

Last Year

Last year, Toyota agreed to raise base monthly salary by 1,000 yen after its labor union requested an increase of 1,500 yen. The automaker met the union's bonus request, plus an extra 10,000 yen.

Honda agreed to an increase of 900 yen in monthly wages after its union asked for 1,000 yen a month more and met the request for a bonus of 6.6 months salary. Nissan gave a bonus of six months pay instead of the union's request for 6.3 months. It raised wages by 6,700 yen a year instead of the 7,000 yen asked for.

In Japan, companies and union members typically negotiate in February and March to decide base salaries and bonuses. The bonuses and base salary increases only affect domestic workers.

Japanese household sentiment slid in December to the lowest level since June 2003 as wages fell at the fastest pace in three years and food and gasoline prices surged.

``This may be the last chance for workers to get an increase in base wages for a few years, as the automakers' earnings may be worsening,'' said Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net ; Tetsuya Komatsu in Tokyo at tekomatsu@bloomberg.net

mmarshall

Give it to them.

One of any auto company's most critical resources is its employees. It cannot sell ANY cars, or have any customer-satisfaction, if the factory employees don't do their jobs and do it well. And assembling/building cars is not flipping hamburgers at a fast-food place or loading groceries at a supermarket. It is often difficult, highly skilled work......and the pay should reflect the work and skill level.

IMO there is simply too much emphasis today on cost-cutting in the auto industry. As long as it is reasonable, I'd rather pay a couple of bucks more and have a well-assembled car with quality materials and contented employees at the factory than penny-pinch and have to put up with tinniness and poor-quality materials in the design. That is why I am not impressed with the new 2009 Forester or several new Toyotas....they fell prey to cheapening on their new designs. GM, on the other hand, has major improvements in the new Chevy Malibu and the Cadillac CTS.

PhilipMSPT

iTrader: (5)

I would increase pay for their engineers more than anyone else.

If you engineer a better car that costs less, then you don't have to worry too much about the rising costs of labor and production.

mmarshall

True, but engineers, in most cases, only design and (of course) engineer. They don't actually assemble or build the cars. It's the people in the plants that are the company's bread-and-butter.....they do the real productivity.
And there's an old saying.....don't bite the hand that feeds you.