Automaker Toyota (TM) has acquiesced to union demands and agreed to implement the biggest base salary increase in the past 20 years.
The world’s largest vehicle manufacturer has also agreed to raise bonus pay going forward.
Toyota’s new incoming president Koji Sato said the decision to accept the union's demands during the first round of contract negotiations was meant to spur “frank discussions” between labour and management.
Toyota and the union representing 357,000 workers each said the base pay raise is the biggest in two decades, though they declined to specify the percentage increase.
With inflation running at 4% in Japan, a 40 year high, Japanese companies are under pressure to raise wages and revive consumer consumption.
Toyota said in a news release that its wage increase will also apply to part-time and contract workers, and that it agreed to union demands for one-time bonus payments equivalent to six months of wages.
Toyota’s stock is down 25% over the past year and trading at $139.18 U.S. per share.
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