Honda cuts managers' pay to cope with slow sales

[February 02, 2009]  TOKYO (AP) -- Honda Motor Co. said Monday managers' salaries would be slashed 5 percent starting next month to cope with sliding sales. The cut comes on top of the 10 percent 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 U.S. 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 percent, to 80 billion yen ($888.9 million) from an earlier 185 billion yen. The latest projection marks an 87 percent 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 percent 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 U.S. 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.

[Associated Press; By YURI KAGEYAMA]

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