Toyota Motor Corp. said that the wage increases being demanded by labor unions as they enter into annual talks this year were "surprisingly high." According to Senior Managing Officer Naoki Miyazaki, Toyota will wait until the negotiations are over before disclosing whether it will agree to the unions’ requests.
He noted that improvement in Japan's economy as well as the need to hike personal spending will be considered in the negotiations. The Japanese carmaker is expecting JPY1.9 trillion in profits for the fiscal year ending March 31, 2014, thanks to the economic policies implemented under Prime Minister Shinzo Abe that weakened the yen and improved earnings from exported units.
Abe has urged Japanese firms to raise wages faster than gains in the cost of living, since increasing prices risk undermining his public support. Toyota's labor union, which represents over 50,000 workers, is negotiating for a net JPY4,000 ($39) average increase in monthly wages and annual bonuses valued at 6.8 months' salary, or around JPY2.44 million ($23,909).
Toyota will disclose the final plan in March. In 2013, Toyota agreed to a union proposal for a 2013 average bonus of about JPY2.05 million. According to Miyazaki, a JPY1 increase in salary costs the carmaker more than JPY2 because a higher base pay hikes the carmaker’s costs for benefits including insurance.
This will be the first time in 12 years that labor unions at all Japan's carmakers are pressing for a hike in base wages, which exclude overtime and bonus payments. The unions are seeking annual bonuses exceeding five months of salary, Yasunobu Aihara, president of the Confederation of Japan Automobile Workers' Unions, said.
In the fiscal year ended March 31, 2013, Toyota’s consolidated vehicle unit sales in Japan and overseas jumped 20.7 percent to (plus 1,519,000 units) to 8,871,000 vehicles. Total vehicle unit sales (retail) -- including those of the Daihatsu and Hino brands – leaped 16.3 percent (or 1,358,000) to 9,692,000 units.
Net revenues in the fiscal year under review jumped for both the automotive operations (plus JPY3.42 trillion, or 20.2 percent to JPY20.42 trillion) and the financial service operations (plus JPY70.3 billion or 6.4 percent to JPY1.17trillion). These figures allowed the automotive operations and financial service operations to post higher operating incomes to JPY944.7 billion (plus JPY923 billion) and JPY315.8 billion (plus JPY9.3 billion).
Overall, Toyota posted a 271.4-percent surge in operating income in the fiscal year ended March 31, 2013 to JPY1.32 billion. Net income attributable to Toyota Motor Corp jumped 239.3 percent to JPY962.1 billion.