By Makiko Yamazaki and Kentaro Sugiyama
TOKYO (Reuters) -Japan’s top automobile industry union group has no plans to scale back its wage demands at labour talks next year despite a heavy drag on the sector’s earnings from U.S. tariffs, its chief told Reuters on Friday.
The comment from Akihiro Kaneko, president of the Confederation of Japan Automobile Workers’ Unions (JAW), underscores the determination of Japan’s most influential industrial umbrella union to keep wage momentum going into a fourth year.
“With inflation persisting and real wages still lagging, there’s simply no option to go into next year’s wage talks with a weaker stance than last year,” Kaneko said in an interview.
“We do recognise that the auto industry is in a critical situation, with the severe hit to automakers’ earnings from U.S. tariffs,” Kaneko said, as the industry braces for a profit plunge of about 30% this year.
“But to keep the positive cycle turning, with higher wages driving consumption, consumption fuelling growth, we need measures that push demand, and wage hikes are a key part of that,” he said.
“This year is about making that cycle sustainable, so lowering the vector is out of the question.”
In this year’s labour talks, JAW’s member unions secured an average monthly wage increase of 4.94%.
JAW has 12 unions under its umbrella, representing a total of 784,000 workers, including those of Toyota Motor, Honda Motor, and parts makers.
Japan’s automobile industry, broadly responsible for the employment of more than 5 million people, typically sets the tone for the country’s wage negotiations that swing into full gear in the first few months of the year.
The outlook for next year’s wage negotiations has become a key factor in the timing of the Bank of Japan’s next interest rate hike.
Governor Kazuo Ueda said last month the central bank wants to gather “a bit more data” to confirm whether companies will keep raising pay despite the drag from higher U.S. tariffs.
He added that the BOJ will closely monitor manufacturers, with particular attention on the auto sector, where tariffs have already hit earnings.
In the interview, Kaneko said the group is preparing to propose cooperating in efforts to improve profitability to help management secure sources for wage hikes, including measures to ensure fair pricing practices to allow suppliers to raise wages.
Washington formalised a trade agreement with Tokyo in September, implementing a baseline 15% tariff on nearly all Japanese imports, down from the initial 27.5% on autos and a 25% duty threatened for most other goods.
(Reporting by Makiko Yamazaki and Kentaro Sugiyama)
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