Merry Christmas! Isuzu cut your salary!

December 24, 2008
By Ken Worsley

With Toyota cutting 750 billion yen from its fiscal 2008 profit projections, and seeing its output drop for the fourth straight month in November, it’s no longer any surprise that Japanese automakers are cutting back on just about any and all expense.

But Isuzu takes the cake, leaking to the Nikkei on Christmas Eve that it plans to cut salaries for all employees by about 8,000 yen. Of course, this is better than staging mass layoffs - if they can be held off, and we do find some solace in the fact that executive compensation will be cut by about 30%. Still, the average unionized Isuzu employee makes only about 300,000 yen per month, and previous pay cuts in 2002 only generated greater profits for the firm, which makes one wonder about the competence of union leaders - Isuzu’s operating profit hit an all-time high in FY2007, after increasing for five consecutive years.

In November, Isuzu decided to eliminate every contract worker - all 1,400 of them. Pressure from workers, however, has led the firm to not terminate work contracts for contract workers before they expire.

Filed Under Automotive, Business