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Why Do We Regard the Nissan's Restructuring Problem as Vital for Us?
By Kanemichi Kumagai
Since Nissan Motor Corporation announced on October 18 1999 a "Revival Plan," we have carried forward the struggle with all our might to protect jobs and local economy, demanding a full reconsideration of the plan.
Below, I will explain the plan's outline, and the reason why we cannot accept it and why we give great importance to the struggle against it.
1. Outline of the Nissan Revival Plan (NRP)
1) To reduce the purchase cost by 20 percent in three years
For this, Nissan plans to reduce the number of the companies affiliated or having business connection with it with regard to the purchase of parts and material, from 1,145 to below 600. It also plans to diminish the companies it trades with in equipment and service, from 6,900 to below 3,400.
2) To decrease the productivity from 2.4 million cars to 1.65 million cars
To achieve this goal, the company is ready to close 3 assembly plants, namely, Nissan Murayama Plant, Aichi Kikai Minato Plant, and Nissan Shatai Kyoto Plant, along with two plants producing engine units in Kurihama, Kanagawa Prefecture and Kyushu. It also intends to reduce 24 platforms to 12.
3) To cut expenses for sales promotion and management
To this end, the company wants to reduce the number of the dealers under its direct management by 20 percent, and the business offices, by 10 percent.
4) To downsize the total workforce of the group companies that hold 40 percent or more stocks to 21,000 (14 percent).
While doing so, the company expects to hire 14,000 part-timers to cover the new recruitment, which represents a cut of 35,000 workers in active service.
Nissan Chief Operating Officer Carlos Ghosn says that these are moderate goals of reduction.
2. Problems of the "Revival Plan"
1) Nissan is planning to carry out workforce cut along with plant closure, reduction of affiliated companies by half, and abandonment of sales companies. With all these, the "Revival Plan" is not just a question of job securing for workers directly employed by Nissan. As an automaker sustained by a large number of subcontractors and affiliated companies, Nissan holds two million workers altogether under its umbrella. Thus the plan means nothing but a massive restructuring offensive, which will give a serious blow to all the workers and their families, and even to the local economy. What is more, Nissan unilaterally announced the "Revival Plan," with no prior consultation with the trade unions concerned, related companies and local governments.
Such a way of restructuring cannot be accepted in international community. It all goes against the "Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy" adopted by the Governing Body of the International Labor Organization (ILO) in November 1997. It also ignores the EU Directives on European Works Council (1994) and on collective dismissals (1975). When it closed its plant in Vilvoorde, Belgium, Renault lost the suits filed by workers both in France and Belgium and had to pay the penalty.
2) The "Revival Plan" is full of holes, because with this the company solely aims at profit making. Without referring at all to the cause and responsibility of the company's mismanagement, the plan intends to impose on workers a production plan based on largely extended working hours through workforce reduction. It will also force the workers transfer to other plants in distant places where they will not be able to bring their families with them. This is nothing but a violation of workers' human rights. What is more, Nissan on its own account has not explained sufficiently or made public information about the impacts of the Plan on the affiliated companies.
Nissan closed the Zama Plant in Kanagawa Prefecture in 1995. According to the labor contract renewed after the closure of the plant, the extra working hours increased from a hundred and several scores to two hundred and several scores a month. The "Revival Plan" sets Nissan's annual operating hours at 4,400. A trial calculation based on this and what the company has explained will result in longer working hours for workers, with four hundred and several scores of overtime work and work on holidays. And those who refuse to go on assignments alone in other plants will have no other alternative than to give up the job. Such a restructuring not only runs counter to the Labor Standards Law and the international trend that calls for shorter working hours, but also infringes the ILO Convention No.156 concerning the equal opportunity and treatment of women and men workers with family responsibility, which the Japanese government too has ratified. Further, the company's refusal to conduct and publish the plan's impact on affiliated subcontractors contravenes the domestic legislation, such as the law on the promotion of small- and medium-sized subcontractors, which provides the standards for the promotion of those companies. The "Revival Plan" must be denounced as a restructuring plan contrary to law.
3) The Outrageous way of restructuring set out by the "Revival Plan" has provoked critical comments even from the leading figures of business circles, such as the chairpersons of the Japan Federation of Employers' Associations (Nikkeiren) and of the Kansai Federation of Employers' Associations (Kankeiren). Mass media are also critical and doubtful about the plan. Under such circumstances, a big change has taken place in the public opinion toward the general tendency and behavior of the corporate management to consider restructuring only means downsizing.
3. Our Position on the Nissan Question and Struggle Target
1) Among all the restructuring offensives carried out in different forms, Zenroren for the moment gives first priority to the Nissan question in its efforts to "protect jobs, smaller businesses and the local economy from arbitrary conducts of major companies." To fight back the "restructuring tornado" raging across the country based on the position to defend jobs for workers and the local economy, Zenroren calls on broader sections of people and organizations to join the struggle. It is determined to carry out an all-out struggle with concerted efforts of its member unions throughout the country.
2) Basic aims of the struggle are to make Nissan reconsider the "Revival Plan" that includes the plant closings, and to protect jobs, small- and medium-sized enterprises and the local economy. In the struggle, we will work with a clear view that the struggle must help change national opinion about corporate restructuring.
The Murayama Plant, where JMIU (All-Japan metal and Information Machinery Workers' Union) members are working, is a foothold of the struggle. With a view to "preserve the production line" in the plant, we are carrying forward the struggle to secure jobs at the Murayama Plant for those who have difficulties in moving to other plants and to prevent the company from forcing workers to accept transfer or retirement.
4. Summary of the Development and Achievements of the Struggle
1) A nationwide campaign to call for a fight against corporate restructuring
While disseminating information on the Nissan question, we have called for broader sections of workers who are targeted in the restructuring offensive. We have published more than one million handbills.
2) Visits to Nissan-affiliated companies and shops to encourage them and call for their support to the struggle
We have visited Nissan-affiliated companies and shops in different places around the county to make them understand the problems of the "Revival Plan", and to call on them to support and join our struggle. We have received a very favorable response from them, who expressed their serious concern and discontent about the lack of relevant information and about their future.
3) Appeal to Local Governments and Assemblies
We have appealed to the local governments and assemblies to urge Nissan to reconsider the "Revival Plan," and to secure jobs for its workers as well as for those working in the affiliated companies. In Musashi Murayama City, the city assembly chairperson sent a letter to the President of Nissan requesting that the company keep the Murayama Plant operating. The city assembly also adopted a resolution to this effect; The Akishima City government conducted on its own account a survey on the effects of the restructuring on subcontractors.
4) Intensifying of Protests against the Nissan Motor Co.
Under the initiatives of the local struggle center, we regularly carry out a propaganda activity in front of the six Nissan plants every Tuesday and Thursday evening. Last December, we organized a propaganda activity distributing a hundred thousand and several scores of leaflets to all the households in the periphery of the plants. On December 23, we successfully held a big rally in Musashi Murayama City and demonstration in the nearby areas of the plant with some 4,000 workers participating in it. At present, we are carrying on propaganda activities in front of the railway stations in the surrounding areas of the plant. JMIU Nissan Branch members have organized activities to encourage workers at Murayama Plant by sending propaganda materials and letters (three times so far), and by having direct dialogues with them over the telephone.
Under such circumstances a dramatic change has taken place among workers in the Murayama Plant. At first only a hundred and some dozens workers would take handbills, but now 700 to 800 workers receive them. In the workplaces workers talk about those handbills, rallies and other activities of the JMIU-Nissan branch. Some workers on their own initiatives started forming a "resisters' group." In the first interview between the company and workers on the transfer at the end of last year, 40 percent of the workers (about 1,000) answered that the "transfer to other plants would be very difficult," or that they were still "considering" the matter. This is also a sign of the change in occuring workers' behavior. Such a change has influenced the company's attitude as well, they said in the collective bargaining with the JMIU- Nissan branch, that it "would not transfer workers by force."
On the other hand, the company is pulling itself together to push back workers' struggle, trying to force through the transfer of workers. Since early in January, they have openly ordered workers neither to receive the handbills nor to answer the phone call from the JMIU members. Many workers, however, reject such arbitrary orders and continue fighting.
At the same time, as seen in the reports of mass media, the contradictions of the "Revival Plan" have become visible. One is the breakup of the negotiations between Nissan and a U.S. company over the selling of the forklift section of the Murayama Plant. Why not then, keeps the section at the Murayama Plant? This is a natural demand of workers, but according to the report, Nissan is going to spend several billion yens to transfer the section to the Zama Plant.
For whom does Nissan exist? Who has made it possible for Nissan to become what it is today? We will never allow Nissan to carry out its restructuring plan that completely disregards workers' wish. For this, we will attach importance to the struggle in the Diet, and develop solidarity with workers of Renault, and those in Mexico who are fighting against the unjustifiable dismissals by the local company affiliated with Nissan. We will continue our struggle until we succeed by our own efforts in making Nissan reconsider its unjust restructuring plan. With all our strength, we will put down the whirlwind-like corporate restructuring raging over the workers across the nation. By calling for the continuous support to our struggle, I conclude my report.
Vice Chairperson of the National Confederation of Trade Unions (Zenroren) Head of the Local Struggle Center against the Closure of the Nissan Musashi Murayama Plant tinuous support to our struggle, I conclude my report.
Toyota's Financial Strength and Financial Policy
By Shozo Sasaki
Toyota's Financial Strength and "Toyota Bank"
Toyota had a pretax profit of 578 billion yens for the period ended March 1999. It has added 52.1 billion yens to its internal reserve which now totals up to 4,860.6 billion yens. Among the items of this enormous internal reserve, 3,840.1 billion yens go to a voluntary accumulated fund. Toyota's operating funds, or spare funds (cash flow) total about 2.37 trillion yens. Its annual financial gains by operating funds have remained at 100 to 200 billion yens for these past years (see the graph). Comparing its financial gains with those of the business earnings of Japan's domestic banks, Toyota would rank among the average-sized regional banks. This sound financial standing gives Toyota another name, "Toyota Bank." To put its financial strategy into practice (cf. Rodo-Soken Journal No.27 1999), Toyota makes maximum use of these operating funds.
Toyota's Financial Business and Financial Policy
Toyota's financial policy that produces financial profit by the use of its financial strength is based mainly on two functions. One is what is called "offensive financing," or the use of financial goods. The other is what they call "defensive financing," or the financial support to part manufactures and sales companies affiliated with Toyota.
Referring to the use of financial goods, the most important is the vigorous promotion of sales finance at home and abroad to provide loans and lease. At present Toyota's profit from sales finance holds only 6 percent of its consolidated business earnings, because the customers and consumers take out loans individually at banks and other financial organizations. As a solution to this problem, Toyota inside the country makes the best of "Toyota Finance," a subsidiary company set up with investment of Toyota to provide loans mainly to dealers. Through this subsidiary, Toyota greatly encourages the loaning to car purchasers. Toyota sets lower interests than banks to stimulate the sales of Toyota cars.
Outside the country, Toyota has set up sales finance companies one after another in England, Italy, France and others. It plans to establish new companies in about ten countries including Spain and Brazil. Taking advantage of its credit worthiness, it not only seeks a low-cost fund in the host countries but also aims to expand the sales of its cars there.
Secondly, Toyota is rapidly advancing into the housing loans market. Backed up by Toyota's credit worthiness, "Toyota Finance" issues corporate bonds to grant loans to those who buy houses. This has become possible by the enactment of a Nonbank Corporate Bond Law, which allows non-bank financial institutions to use funds gained by issuing bonds for providing loans to individuals and enterprises. Toyota makes maximum use of fund-raising capability to advance into the housing loan market. In doing so, it also props up the Toyota-related housing business.
Active Implementation of Financial Polity
Furthermore, Toyota now marches into the credit card business, considering it as a core of its financial business. It plans to issue its own credit card through "Toyota Finance." In cooperation with credit card companies such as, JCB, UC and Million, it already issues credit card called "Toyota Card." which has a membership of over 2.7 million, the largest one among the car-related credit cards. But it plans to switch it over gradually to an IC card of its own that would enable users to settle accounts by different ways including electronic cash. It further aims to make it a multifunction card, with which users can pay the car insurance premium or installments through their bank accounts. The card will also be connectable with the "intelligent-transport system" (ITS). With the new card, Toyota aims to attract broader sections of consumers. By putting its card business fully on track, Toyota tries to keep customers "enclosed" within its reach.
In the field of car insurance, Toyota cooperates with the Chiyoda Fire and Marine Insurance Co., Ltd. (Toyota holds 40 percent of the investment in it) in its concentrated efforts to develop original commodities for Toyota cars. They have produced "GOA Accident Insurance" to cover accidents involving "GOA", Toyota's anti-clash safety body, and a new-type accident insurance for luxury automobiles. It has also invented as a joint project with the Tokyo Marine and Fire Insurance Co., Ltd. and other two companies what is called "Kosuru-kamo Insurance," by which Toyota will bear the repairing cost up to 100,000 yens for scratches on the car body made by a newly licensed driver. This one is now the talk of the trade. Through having non-life insurance companies under its umbrella or strengthening cooperation with them, Toyota aims to "easily obtain the leadership" in the non-life insurance business.
With a view to advancing into the securities business, Toyota raised its rate of shareholding from 8 to 10 percent.
Financial Support to and Controlling of the Affiliated Companies
Toyota fully displays its financial strength in supporting and controlling companies and shops affiliated with it as well.
When Toyota shops have bogged down in financing due to the failure of the Hokkaido Takushoku Bank, Ltd. Toyota on the spot granted them a loan without collateral through "Toyota Finance."
Toyota introduced since 1998 a system to support financing of the group companies that have business tie-up with it: financial institutions would buy the credits of the Toyota-affiliated companies, then with these credits as collateral, issue commercial paper. This system works to enable Toyota's business partners to instantly raise funds based on Toyota's high credit worthiness.
Also, Toyota is always ready to buy convertible corporate bonds of its group companies such as Denso and Aishin Seiki. When it finds a financial institution willing to buy stocks of a group company, Toyota will purchase them immediately. Toyota says, "the two billion yens of capital can be converted into stocks of many more group companies." As long as it can manage to hold its financial strength and enormous funds, Toyota will continue to reinforce the unity and control of the group companies. However, such financial support is given only on the condition that Toyota sees it necessary for its financial strategy. Those who cannot receive financial support from Toyota have no alternative but to leave the Toyota group.
Toyota's Financial Strategy and Social Responsibility
The first priority of Toyota's financial policy is to increase profits through a "positive development of financing to support manufacturing" of cars (like loans and credit card). As the domestic financial situation becomes rapidly unstable, it also aims to build up unity of and intensify its control over the group, saying "with regard to the financing as well, we will protect our fortress, our group by our own efforts." Toyota also says that as the basis of its financial policy, it will "not set its hand to other financial business than the car-related financing." Toyota will therefore carry out its financial policy within its regular business, that is to say, car-related business.
Nevertheless, Toyota has no will to positively use its enormous funds and financial strength to secure wages and jobs of workers of Toyota and affiliated companies, to improve working conditions, to ensure stable business and living conditions of a huge number of related subcontractors and traders, and to contribute to the local economy and society that support Toyota's business.
Acting in accordance with the "capital's logic" that gives top priority to corporate interests, Toyota now faces voices from workers and citizens that severely urge Toyota to fulfill its social responsibility.
Member of Rodo-Soken, Project Team to Study on Nissan Question
A Project Team to Study on Nissan Question Set up
Nissan Motor Co. established a capital tie-up with a French auto company Renault, which brought Mr. Carlos Ghosn to the company as its Chief Operating Officer. He announced last October what is called "Revival Plan," which intendes to close down 5 plants, cut 21,000 jobs and reduce subcontractors by half.
In Nissan, members of the All Japan Metal and Information Machinery Workers' Union (JMIU), affiliated with the National Confederation of Trade Unions (Zenroren), are working. This is why Zenroren took up a decisive fight against the company's massive restructuring plan under the slogan: "Defend employment and local economy!"
In support of this struggle led by Zenroren, Rodo-Soken set up in November 1999 a project team to study the Nissan question. The team is energetically carrying out a study activity to gather as early as possible materials and information necessary to lay groundwork for developing the movement and policy to counter the "Revival Plan."