Toyota`s Mgmt-Labor Relations Still Bright After 53 Years

Japan Toyota`s union members recently engaged in discussions over wage plans for the new year held last December. They have to wait however for next March to see the final figures, but they have high expectations about the new wage plan with good export figures to the U.S.

Executives at the company however, decided to present an unexpected deal to the company, which stipulated that their basic salaries freeze instead of taking their regular raise. There has been some tough criticism concerning the deal, but the union will most likely come to an agreement this February after a series of discussions.

Toyota, the producer of Lexus, a popular car in the Korean automobile market, renewed high profit in the past three years coming in at 1.414 trillion yen (some 1.4 trillion won) in current surplus this March. Another record was also set with historic earnings since its foundation. The union was able to obtain some 6500 yen in regular raises and a 200,000 yen special bonus increase.

Employment over wages

The city of Toyota where the headquarters of Toyota is located completely reflects the company. “We made that decision after considering all the factors around the automobile market including Toyota’s situation, rival trends and future prospects,” said Toyota’s labor union planning director.

“The reason why we were able to turn out such a profit last year was due to solid exports to the U.S. along with low yen values. This is a real start. We decided to maintain employment rather than raise our salaries by focusing on reviving the company.”

Strikes without any setbacks

The no-strike record of the Toyota labor union has been celebrating its 53rd anniversary. Management and labor unions still remember the huge effects of the long-term general strike in 1950. The 50-day-long strike caused 1500 (25 percent) of the employees lose their jobs with a large number of executives retiring. This experience planted deep in their hearts that excessive conflict between management and labor unions only caused disaster in the long-term.

The management team of Toyota is currently concentrating its energy on developing environmentally friendly automobile models such as a fuel-battery car and a hybrid car, as part of its ambition to rank in as the best in the global automobile industry within the next decade.

Union members agreed on the logic of the management team who asked the union to put less of a burden on labor costs to increase investment for new projects.

“If our situation gets worse, we may have to cut salaries, but I would never dismiss anyone,” said Toyota Chairman Okuda Hiroshi, guaranteeing most employees job security until retirement.

Toyota’s labor union also held a spring demonstration to demand a bonus increase back in March. However, the strike went on only during lunchtime and after-work so as not to damage the company’s normal operations.

parkwj@donga.com