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Honda cuts managers' pay to cope with slow sales

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TOKYO: Honda Motor Co. said on Monday managers' salaries would be slashed 5% starting next month to cope with sliding sales. The cut comes on top of

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the 10% pay reduction for directors announced last month.

The move affects about 4,800 managers at Honda group companies in Japan, including those stationed abroad, but not those hired by Honda's overseas units, the company said in a statement. The reduction continues through May, and what happens after that is still undecided, it said.

Japan's No. 2 automaker has been battered by the plunge in demand in major auto markets like the US. The rising yen also hurts Honda and other Japanese exporters by reducing their overseas earnings.

Last week, Honda slashed its profit forecast for the fiscal year through March by 57%, to 80 billion yen ($888.9 million) from an earlier 185 billion yen. The latest projection marks an 87% slide from the 600 billion yen earned the previous year.

Honda, which makes the Accord sedan and Odyssey minivan, also lowered its sales target by 3% to 10.1 trillion yen, the first time in nine years Honda will mark an on-year sales drop.

Still, Honda's troubles may be smaller than its rivals. General Motors Corp. and Chrysler have received massive bailouts from the US government to stay in business. Toyota Motor Corp, the world's biggest automaker, is projecting its first operating loss in 70 years.

Toyota, Honda and Nissan Motor Co. have laid off thousands of temporary plant workers to adjust production.

TOI.

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