OSAKA -- Matsushita Electric Industrial Co. and its labor union are at an impasse regarding next year's bonuses, with the company hoping to slash payouts below a threshold equal to four months' pay due to a sharp decline in earnings.
"This year's spring wage talks are being conducted under circumstances we have never seen," Matsushita Vice President Atsushi Murayama said Friday. "We don't have the flexibility that we had in other years."
The bleak situation might also force Matsushita to alter its system of mandatory pay raises.
As for the bonuses, Murayama said negotiations with the company's labor union are focusing on whether the company can make payments worth four months of salary.
Under Matsushita's bonus system, the size of the firm's operating profit decides the amount of the following year's bonus. An annual bonus worth four months of salary is guaranteed, and the company adds to that figure based on operating profit.
However, as the consumer electronics maker's sales have dropped drastically, the annual payment for the year "falls below four months of salary, based on calculations made in line with the payment framework," Murayama said. "The labor union insists that a minimum of four months must be paid, and it shows no readiness to compromise."
Last year, the bonus was worth more than five months' salary.
Matsushita is expected to incur a group operating loss of 160 billion yen for the business year to March 31.
When the company introduced the current bonus system in 2000, management and labor agreed that it could be scrapped in special cases, Murayama said.