Executive Vice President Tetsuo Iwamura said the Japanese automaker will set pay based on reaching profitability targets, rather than government directives on how fast to increase compensation.
The announcement came as Prime Minister Shinzo Abe has called four meetings since September with union and business leaders to persuade them to build a consensus on the need for higher wages to end 15 years of deflation in Japan. Toyota is among the auto industry manufacturers that have said they’ll comply with that request.
“We respect his request,” Iwamura said in an interview. “Our first priority is to improve profitability. Then we will consider the reward for our stakeholders and our associates.”
In March the carmaker already boosted annual bonuses for workers to the equivalent of 5.9 months of pay from 5 months a year earlier. A further increase in compensation next year is “likely,” Iwamura also said.
Honda will probably earn 828 billion yen in operating profit, according to the average of 23 analyst estimates, exceeding Honda’s forecast for the year ending in March.