Major Japan firms offer large pay hikes in spring negotiations
TOKYO (Kyodo) -- Many major Japanese companies, including Toyota Motor Corp., on Wednesday fully met their labor unions' demands for wage hikes in annual negotiations, despite the expected increase in costs from higher crude oil prices.
Unions, however, at smaller companies could struggle to win similar wage hikes. Such firms tend to find it harder to pass on higher costs to their customers, especially with the rise in oil and other material prices caused by the crisis in the Middle East.
Seen as a trendsetter at the annual "shunto" wage talks, Toyota, the world's largest carmaker by volume, fully met its labor union's pay hike and bonus payment demands for the sixth consecutive year.
The automaker is proposing pay increases of up to 21,580 yen ($135) per month while accepting its union's request for an annual bonus equivalent to 7.3 months' pay, down 0.3 month from last year's record-high payment.
Honda Motor Co., which expects its first full-year net loss in the year ending March 31 since its listing nearly 70 years ago, accepted an 18,500 yen pay hike request, while Suzuki Motor Corp. offered a pay increase of 20,500 yen, exceeding its union's demand.
Struggling Nissan Motor Co. has consented to a monthly pay hike of 10,000 yen as requested by its union, aiming to increase employee morale during its restructuring efforts.
Hitachi Ltd., NEC Corp. and Mitsubishi Electric Corp. each agreed to a monthly base pay increase of 18,000 yen, as sought by their unions.
Major heavy machinery manufacturers Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and IHI Corp. also agreed to their labor unions' demands for a 16,000 yen pay increase.
Other companies including Mazda Motor Corp. and Japan Airlines Co. have already met their labor unions' demands although the annual wage talks at major firms typically run from mid-February to mid-March.
Meanwhile, pay hike proposals by Nippon Steel Corp., Kobe Steel Ltd. and JFE Steel Corp. fell short of their unions' demands. The steel industry has been hit by worsening market conditions amid an influx of cheaper Chinese products.
With inflation persisting, major companies mostly offered wage hikes of around 5 percent to 7 percent. "We are seeing solid progress that could lead to a virtuous cycle of growth and wealth distribution across the society," said Yoshinobu Tsutsui, chairman of the Japan Business Federation, also known as Keidanren.
Chief Cabinet Secretary Minoru Kihara said at a press conference that the government "hopes that strong (pay hike) momentum will steadily spread to every corner of the country, small and medium-sized enterprises and nonregular employees," emphasizing the importance of achieving wage increases that outpace inflation.
The Bank of Japan, which raised its benchmark interest rate last December to its highest level since 1995, is also closely monitoring the outcome of the wage talks as it sees rises in both wages and prices as key factors for its future policy.
In its basic policy for the 2026 wage negotiations, the Japanese Trade Union Confederation, the country's largest umbrella organization for labor unions known as Rengo, has set an overall wage hike target of 5 percent or more for the third straight year.
Rengo has set a higher goal of 6 percent or more for unions representing small and medium-sized enterprises, which employ about 70 percent of the country's workforce, aiming to narrow the pay gap with larger companies.
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