WITH worldwide demand for cars slumping and the strong Japanese yen eating into its profits, Japanese automaker Toyota is cutting costs aggressively.
This month, some 5,000 managerial staff at Toyota took home winter bonuses that were 10 per recent smaller than last year.
The car maker is also reportedly considering slashing the directors' bonuses – perhaps even to zero - that are to be handed out next summer.
Those bonuses reflect Toyota’s sagging performance for the current fiscal year ending March 2009.
Toyota’s move appears to be aimed at setting the tone for even more drastic cost-cutting in the future.
At the same time, it is no doubt to pre-empt expected demands by Toyota’s union for a pay hike during the traditional wage negotiations in the spring.
As Toyota is the largest car maker in Japan, what it does is carefully watched by other companies and likely to trigger off similar moves in other companies.
With the current economic doom and gloom, Japan Airlines (JAL) president Haruka Nishimatsu has suddenly found himself in the spotlight after CNN showcased him last month as Japan’s frugal CEO par excellence.
Mr Nishimatsu commutes to work by bus – though some Japanese reports say he takes the train - eschewing the comforts of a chauffeured company limousine.
He also pays himself only 9.6 million yen a year, a sum lower than what many Japanese executives in their 40s and 50s receive as annual packages.
Many overseas viewers of CNN’s report apparently saw Mr Nishimatsu as setting a fine example for CEOs the world over in these troubled economic times.
But to set the record straight, Mr Nishimatsu’s frugality is not a direct response to the present global economic crisis, which was sparked by the financial turmoil in the United States.
Mr Nishimatsu took over as the airline’s CEO in 2006 when the company was already struggling, and he had decided at the time to take a pay cut since all JAL employees had to put up with a 10 per cent reduction in their salaries.
Certainly, the Japanese media has not made a fuss over Mr Nishimatsu, no doubt seeing his actions as something to be expected giving JAL’s troubles.
Why, in order to show that JAL has been reborn, Mr Nishimatsu has even revived the practice of personally going to Narita Airport (which is a good hour’s drive away from Tokyo) on weekends to greet important corporate clients flying back on JAL flights.
The practice had been abandoned by his two immediate predecessors.
Sharing the pain together in hard times seems typical of quintessentially Japanese companies like Toyota and JAL.
However, Sony, which has long been regarded has less Japanese than other Japanese companies, has taken a different tack.
The global electronics firm, headed by Welsh businessman and naturalized US citizen Howard Stringer since June 2005 has decided to fire 16,000 of its staff, half of them regular employees.
And that may only just be the beginning.
Sony is reportedly putting the improvement of corporate performance and answering to its shareholders above job preservation - an example of what can happen when a Japanese company becomes too international in its outlook.
Meanwhile, businesses are not the only ones biting the bullet.
Many local governments faced with insufficient tax revenues have also trimmed bonuses and salaries. But none can match the case of the mayor of Futaba-machi in Fukushima prefecture, northern Japan.
Citing the town’s financial difficulties, Mayor Katsutaka Idogawa has decided to pay himself just 56,000 yen (S$923) per month from January to March next year.
In fact, since his election in Jan 2006, the mayor has been paying himself just 383,000 yen (S$6,311) a month - half of the stipulated salary for his post.
There may be a lesson here for the rest of us.