March 14, 2012 / 5:43 PM / 6 years ago

UPDATE 1-NEC to propose wage cuts to its labor union-Nikkei

March 15 (Reuters) - NEC Corp will propose drastic cost-cutting measures to its labor union, including a temporary wage cut, in an effort to turn around its business, the Nikkei reported.

In a labor-management meeting scheduled for Thursday, the company will likely propose paring the pay of union members by up to 5 percent for six months to a year, the Japanese daily said.

NEC has reduced executive compensation by 10 percent to 40 percent since February and will cut monthly salaries for managers by 5 percent to 7 percent starting next month, the daily said.

The company, which is bracing for a group net loss of 100 billion yen ($1.19 billion) in the fiscal year ending this month, will be able to reduce fixed costs by about 10 billion yen a year with its pay cuts for workers and managers, the business daily reported.

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