Toyota paying highest bonus since 2008 in Japan

TOYOTA has raised bonuses for its employees in Japan to their highest level since 2008, less than a year after 350 Australian workers were controversially axed from its Australian factory in the Melbourne suburb of Altona.

Following an agreement with unions, Toyota will pay employees an average bonus of ¥2.05 million ($A20,563) for 2013 compared with ¥1.77m last year, a boost of almost 16 per cent.

In Japan most companies guarantee to pay twice-yearly bonuses as part of overall employee remuneration packages, making it easier to adjust staff costs than by raising or cutting salaries.

Toyota reportedly paid a ¥2.51m bonus in 2008 before the effects of the global financial crisis took hold and then compounded by the 2011 earthquake and tsunami in Japan and the effects of floods in Thailand that lasted well into 2012.

Strong post-disaster recovery and a weakening Japanese currency has contributed to Toyota’s rebounding profits.

In announcing its third-quarter financial results on February 5, Toyota increased its full-year net income forecast by 10 per cent per cent to ¥860 billion – triple the 2012 figure and the highest since the fiscal year ended March 2008.

Toyota Motor Corporation senior managing officer Takahiko Ijichi attributed the optimism to “increased vehicle sales mostly in North America, progress in our company wide profit improvement activities and the slight weakening of the yen”.

With sales of 9.7 million vehicles last year, Toyota regained the title of largest car manufacturer by volume from General Motors, which slipped to second place above Volkswagen Group.

Other Japanese companies, including car-makers Honda and Nissan have also agreed to increase bonuses.

Japanese Prime Minister Shinzo Abe, whose election promise was an end to deflation, encouraged recovering and growing companies to help achieve his two per cent inflation target by increasing the income of their employees.

According to The Financial Times, Toyota’s boosted bonus increases average annual employee income by 5.5 per cent.

Toyota managing officer Naoki Miyazaki was quoted as saying, “I believe this is in line with the Abe government’s request”.