Auto unions make same pay hike demand as last year

The Yomiuri Shimbun

Minoru Yamagishi, right, head of Fuji Heavy Industries Ltd.’s labor union, hands the 2017 shunto pay raise demand to President Yasuyuki Yoshinaga in Tokyo on Wednesday.

The Yomiuri Shimbun This year’s shunto spring labor negotiations got fully under way on Wednesday as the labor unions at major automakers submitted demands for a basic pay raise of ¥3,000 per month — the same amount requested a year ago.

However, management has become even more cautious in the face of diminishing profits compared to last year and the uncertain future of the U.S. market. The two sides are thus likely to engage in tough negotiations through March 15, when management will respond to the unions’ demands for pay hikes and other improvements to working conditions.

On Wednesday morning, Minoru Yamagishi, head of Fuji Heavy Industries Ltd.’s labor union, handed a request for a monthly base pay raise of ¥3,000 to President Yasuyuki Yoshinaga at the company’s head office in Shibuya Ward, Tokyo. The labor unions of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. demanded the same amount on the day.

The government and the Bank of Japan consider pay hikes to be the key to pulling the nation out of deflation. The automobile industry attracts particular attention in shunto negotiations because it involves a wide range of businesses — including companies making finished cars, parts manufacturers and dealers. As a result, the outcome of its negotiations have a considerable impact on those of other industries.

In the 2016 shunto negotiations, labor unions at major automakers halved their pay hike demand from the previous year to ¥3,000, but eventually achieved differing results — the Nissan union’s demand was fully accepted, while Toyota’s union agreed to a basic pay raise of ¥1,500 and Honda’s to a raise of ¥1,100.

For this year’s spring negotiations, the labor unions demanded the same pay raise amounts, as they argue the basic pay hike is indispensable to increasing private consumption and getting the nation out of deflation.

Automakers, however, are facing increasingly uncertain conditions.

The net profits during last year’s April-December period fell for Toyota, Nissan and two other companies, mainly because of the stronger yen. For the nation’s automobile industry, forecasting trends in the huge U.S. market has also become increasingly difficult.

U.S. President Donald Trump has criticized Japan for being “unfair” in its automobile trade with the United States. Depending on the U.S. administration’s future moves, Japanese automobile companies could suffer damage to their North American businesses.

“It’s all up to the U.S. market whether we can improve our performance,” said an executive at a major automaker.Speech

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