News Column

M'bishi Motors eyes pay-scale hike as it recovers from slump

February 18, 2014

TOKYO, Feb. 18 -- (Kyodo) _ The president of Mitsubishi Motors Corp. says the automaker is considering raising the pay scale for its employees and resuming dividend payments for the first time in over 16 years in fiscal 2013, reflecting its recovery from a decade of slumping sales.

Asked about the possibility of a wage-scale hike in a recent interview with several news agencies, President Osamu Masuko said the company "should certainly do so" and that it should do whatever it can to help lift Japan out of chronic deflation.

"If we do not take a small step so as to lift Japan's economy, automobile demand could shrink," he said.

Following a sales slump caused by the revelation in 2000 of vehicle defect coverups, the company is expecting to post a record consolidated net profit of 100 billion yen for the current business year through March, supported by the yen's slide.

The labor union at Mitsubishi Motors is demanding a pay-scale hike of 3,500 yen at this spring's wage talks. The move comes after Prime Minister Shinzo Abe urged companies to raise wages to mitigate any adverse impact from the sales tax hike to 8 percent in April from the current 5 percent.

Under the leadership of Masuko, who became president in 2005, the automaker has made progress in improving its financial standing after conducting a public stock offering in January to buy back preferred shares held by four group companies.

Earlier this month, the company announced Masuko will be replaced by Managing Director Tetsuro Aikawa in June, becoming chief executive officer and chairman. Masuko said in the interview that he will be assuming the new posts as investors have requested continuity in management.

He suggested he will remain involved in the company's management at least until the end of fiscal 2016, the final year of the company's three-year medium-term business plan, saying, "I will keep fulfilling my responsibility" during the period of the plan.

In the plan, the automaker is aiming to sell 1.43 million vehicles globally in fiscal 2016, up some 30 percent from the outlook in fiscal 2013, by introducing strategic models such as the Pajero Sport and RVR.

Masuko meanwhile denied that the firm, which places importance on emerging markets such as Thailand and Indonesia where its brand has a strong presence, will withdraw from North America where it is expected to incur an operating loss of 4 billion yen for fiscal 2013.

"We want to somehow make a turnaround in North America," he said, adding, "For the turnaround there, we are expecting the plug-in hybrid vehicles to be one of the strong advantages."

He added the company plans to increase the production ratio of plug-in hybrid electric vehicles and electric vehicles to 5 percent in fiscal 2015 and then eventually to 20 percent in fiscal 2020.

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Source: Japan Economic Newswire

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