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Toyota and Honda, two of the most prominent car companies in Japan, say they have agreed to give their Japanese workers the biggest pay raises in decades.
As prices go up, they are the latest companies in the world’s third-largest economy to raise wages.
According to official numbers, Japan’s inflation rate hit its highest level in more than 40 years last month.
Businesses and the government have had to help because people can only buy so much.
Most Japanese companies talk with unions about pay for a few weeks every year before deciding in the middle of March.
Why did this year’s news come out earlier than usual? The car companies have not said.
Wednesday, Toyota said it would meet union demands for pay and bonuses, with wages going up by the most in 20 years.
Koji Sato, who will become president of Toyota, said he hoped the change would be good for Japan’s auto industry and “lead to honest talks between labor and management at each company.”
When the BBC asked the company for more details, the company said no.
In the meantime, rival car company Honda told journalists that it had “fully answered” union requests for wage increases and bonuses.
The company said salaries would increase by 5%, more than Japan’s inflation rate and the most since 1990.
A Honda spokesperson said that the extra money would go to younger workers as starting salaries increase.
“Even though business is hard, management wants to make a place where everyone can get their work done quickly,” the spokesperson said.
At the beginning of this year, Japan’s prime minister, Fumio Kishida, asked companies to raise wages to help people deal with rising prices.
Fast Retailing, which owns the Uniqlo clothing store chain, said in January that it would raise the pay of its Japanese workers by up to 40%.
The company said that starting in March, all full-time employees at its Japan headquarters and company stores would have to follow the new pay policy.
Prices and wages in Japan mostly stayed the same for a long time.
Inflation has increased worldwide in the past few months because some countries have loosened their rules on pandemics, and the war in Ukraine has increased the price of energy.
Core consumer prices in Japan increased by 4% in December compared to the year before. This was twice the level the central bank had set as a goal and was the highest rate in 41 years.
Inside the £11.3 million deal Toyota signed with the government
In December, Toyota signed a deal worth £11.3 million to help it make a new line of hydrogen-powered pickup trucks.
The government says the deal could lead to up to 250 new jobs in the UK.
With the money, Toyota can set up a test line at its plant near Derby for making its Hilux FC model.
Trucks could be made at the company’s factory in Deeside, Wales if research is done there.
The Burnaston research project is getting £5.6 million from the Department for Business, Energy, and Industrial Strategy. A business group called the Advanced Propulsion Centre UK (APC) also gives £5.7 million. APC works to reduce carbon emissions from transportation.
Batteries are not used to store electricity in cars that run on hydrogen. Instead, electricity is made when hydrogen and oxygen mix chemically.
The government said hydrogen vehicles work best in remote places like farms and quarries, where pickup trucks are already used a lot, and that the infrastructure for charging electric vehicles could be more practical.
Business Secretary Grant Shapps said that the country’s future success would depend on how well it used the potential of new technologies and ensured that roads were cleaner, greener, and cheaper.
He also said that this multimillion-pound boost, made possible by the government working with businesses, will put companies in the best position to be the first to try these new ideas and stay at the top of the global race for decades.
The managing director of Toyota Manufacturing UK, Richard Kenworthy, said that this exciting project lets Toyota build a one-of-a-kind fuel cell commercial vehicle on the well-known Hilux platform in the UK. The skills of Toyota in the UK, the consortium partners, and the rest of the supply chain will change a lot because of this.
The APC is backing five deals worth a total of £73 million. One of these deals is with Toyota.
Electric motors with permanent magnets will be made differently in Bridgwater, Somerset. In addition, a hydrogen fuel cell-powered HGV cab and tractor unit will be made in Glasgow.
Read Also: Ford Motor Company UK to cuts 1,300 jobs
In Slough, a plan is being made to give the auto industry recycled aluminum alloys that are cheaper and have less carbon. In Basildon, Essex, there is money to make methane-powered heavy tractors that can go off-road.
