Toyota Motor Corp. is planning to raise its pay scale in upcoming spring wage talks for the first time in six years on the back of its rapid recovery, company sources said Thursday.
The automaker, which is expected to log a record operating profit for the current business year to March, believes it is necessary to help Japan beat chronic deflation by spurring consumer spending through a wage hike, they said.
The company has also taken into consideration a call by Prime Minister Shinzo Abe to raise wages to mitigate the possible negative impact of a hike in the consumption tax to 8 percent in April from 5 percent.
The move by Toyota, the largest manufacturer in Japan and leading company in the wage talks, could affect decisions by other major companies.
The labor union at the company is demanding a pay-scale hike by 4,000 yen on average. Although management expressed caution at the first round of negotiations Wednesday, it will consider a hike by taking into account the last hike of 1,000 yen in 2008, according to the sources.
Management is meanwhile expected to agree in full to the union’s request for annual bonuses equivalent to 6.8 months of salary.