Japan Auto Giants to Give Workers a Bonus Boost

Japan Auto Giants to Give Workers a Bonus Boost

Prime Minister Shinzo Abe has asked Japanese firms to lift their employee pay as a way to boost disposable income and reverse years of deflation, which has crimped private spending and business investment.

TOKYO — Japan's top automakers are set to give tens of thousands of employees an annual bonus bump as a weaker yen helped their bottom line, while Tokyo presses firms to hike staff pay to lift the economy.

Toyota (IW 1000/8), Japan's biggest car firm, said Wednesday it would accept union demands for a richer bonus with the Camry-maker agreeing to inflate the annual payment by about 10% to an average 2.05 million yen (US $21,000).

The bonus, which is in addition to workers' regular salaries, would be made to both factory employees and while-collar staff, said Toyota, which is also the world's largest vehicle producer.

It would reportedly be Toyota's biggest bonus in five years.

Japan's No. 2 automaker Nissan (IW 1000/26) will bump its bonus by about 2.3% to 2.04 million yen, reports said, while No. 3 producer Honda (IW 1000/30) also said it would offer a bonus boost, without disclosing details.

In January, the country's top three automakers posted record sales for 2012 as the trio put Japan's damaging quake-tsunami disaster in their rear-view mirror, while a weakening yen helped their bottom line.

The unit, which hit a record high around 75 on the dollar in late 2011, hurt Japan's auto industry by making their vehicles less competitive overseas and shrinking foreign-earned income converted back to yen.

The unit's decline in recent months -- it traded above 95 on the dollar Wednesday -- has come on the back of a new government in Japan vowing to fix the world's third-largest economy with a mix of big spending and aggressive monetary easing.

Prime Minister Shinzo Abe has also asked Japanese firms to lift their employee pay as a way to boost disposable income and reverse years of deflation, which has crimped private spending and business investment.

Other major firms, including Hitachi (IW 1000/24) and Fuji Heavy Industries (IW 1000/215), have decided to offer employees a pay rise, Japanese media reported.

Seven & i Holdings, which operates 7-Eleven convenience stores across Japan, has said it would hike salaries for some 53,000 employees while rival operators Lawson and FamilyMart announced bonus increases for staff.

Copyright Agence France-Presse, 2013

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