Wednesday, March 13, 2013
DJ: Nissan Agrees To Union's Bonus Demands
TOKYO--Nissan Motor Co. (7201) on Wednesday said it will meet its labor union's bonus demands, joining fellow domestic auto makers in agreeing to pay out higher compensation this year.
Nissan's union of 21,311 members requested the same bonus amount as last year, but emerged from this year's annual spring wage negotiations with greater success. Japan's second-largest auto maker by volume said it will pay a seasonal bonus worth about 5.5 months of wages, amounting to an average Y2.041 million ($21,260), a 2.3% increase from the previous fiscal year when Nissan agreed only to pay a bonus equivalent to 5.3 months of wages.
Nissan said its decision was based on its hope to maintain and improve motivation among its workers as it seeks to continue growth in the upcoming fiscal year starting April 1.
While Nissan's move mirrors those made by other auto makers such as Honda Motor Co. (7267), its business performance has not met expectations. Nissan was the lone auto maker among the domestic top three to report a drop in net profit in the latest fiscal quarter, hurt by disappointing sales in the U.S. and China, its single biggest market globally. Its full-year outlook of Y320 billion is also lower than its two main Japanese rivals.
Even as the recent weakening of the yen has eased pressure on Japan's auto makers, Nissan Chief Executive Carlos Ghosn has said it needs to weaken further. Mr. Ghosn has repeatedly warned that the currency is still far from reaching the levels needed to turn around the industry's overall outlook.
Yet the auto maker's decision to match its labor union's demands in full follows the industry trend to increase compensation amid the improving exchange rate and an unusual call from the prime minister to Japan's big businesses to raise wages to snap the country out of its prolonged deflationary state.