Toyota is slashing bonus pay for managers as the Japanese automaker tackles a massive recall in the US and deep losses for the second straight fiscal year.
Toyota Motor Corp said yesterday winter bonus payments for 8,700 managers in Japan would be cut by 20 percent.
Japanese workers at major companies such as Toyota get twice-a-year bonus pay in addition to their monthly salaries that reflects the company’s performance.
Toyota announced in the US on Wednesday a massive recall affecting 4 million vehicles to replace the gas pedals that can get stuck in the floor mats and cause sudden acceleration.
The recall, Toyota’s biggest ever in the US, comes at a time when the maker of the Prius hybrid and Lexus luxury car is trying to reverse losses caused by a global slump and strengthening yen.
Earlier this month, Toyota lowered its loss forecast for the fiscal year through next March to ¥200 billion (US$2.2 billion) from its initial projection for a ¥450 billion.
Toyota’s top executives and board have already given up their bonus pay.
The cuts for managers follow a 60 percent year-on-year decline for their summer bonus this year, and a 10 percent cut for their winter bonus last year.
The bonuses for union workers have also been cut. Their winter bonus will average ¥930,000 this year, down 18 percent from the previous year, Toyota said.
The cost of the US recall is expected to be significant because of the sheer number of vehicles.
The Nikkei, Japan’s biggest business newspaper, said the recall cost, although reaching tens of billions of yen, won’t change Toyota’s annual earnings forecast because the company earmarks money for such measures.
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