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Introductory Report to the National
Exchange Meeting to Oppose Corporate
Restructuring and to Defend Employment
and Local Economies

Presented by Kanemichi KUMAGAI
on behalf of the Organizing Committee

   The National Meeting to Oppose Corporate Restructuring and to Defend Employment and Local Economies was held on March 30 in Nihon Seinen-kan, in Shinjuku-ward, Tokyo. It was the first meeting to be organized jointly by five organizations to discuss the issue, which represents an urgent, common demand of the Japanese people. The five organizations are the Japan Lawyers Association for Freedom, the Japanese Communist Party, the National Confederation of Trade Unions (Zenroren), the National Federation of Traders and Producers (Zenshoren), and the New Japan Womenユs Association (Shinfujin). With the participation of more than 400 people from all over the country, the meeting had a great success. The following is an introductory report to the meeting, presented by Zenroren Vice President Kanemichi. KUMAGAI.
   While the government announced the record high unemployment rate, the Ashinaga Scholarship Society released early February shocking news that the number of the orphans receiving scholarship, whose fathers killed themselves, had increased 8.5 times over the figures three years ago. The Society also reveals that the number of such orphans who newly got a scholarship this fiscal year to attend high school soared to hit a new high. Among the reasons why their parents killed themselves, "job-related problems" springing from corporate restructuring, bankruptcy and loss of job, and the "economic or bread-and-butter issues" such as debt burden, accounted for 47.2 percent, a 20.1 point rise from the last year.

   These facts are closely related with the data made public by the National Police Agency in August 2001 that the number of suicides had exceeded 30,000 three years in a row since 1998, that the 60 percent of them were those in their fifties and sixties, and that suicides due to restructuring and the hardships of life were on a sharp increase.

   An investigation by the All Japan Federation of Private School Teachers and Staffs Unions also reveals that there is an increase in the number of the junior and senior high school students who fail to pay their school expenses or leave school against their will because of the worsening economic situation of their parents. Such parents are suffering from sluggishness, bankruptcy or business closure, or from dismissals or loss of job due to the corporate restructuring.

   In this way, the massive corporate restructuring carried out today in all industries, particularly in big electrical and automobile manufacturers, have not only resulted in the growing employment insecurity, the hollowing out of local economies, and the further prolonged recession, but have also caused serious social problems such as suicides and family breakdown.

1. Objectives of the National Exchange Meeting

   The National Exchange Meeting to Oppose Corporate Restructuring and to Defend Employment and Local Economies held under such circumstances aims to provide opportunity for the exchange of various movements in different fields carried out in the workplace and communities throughout Japan. There are a movement against "rationalization" under restructuring to secure jobs and defend working conditions, a movement to protect jobs and regional economies from selfish, tyrannical acts of major corporations, and an offensive to sweep away overtime without pay and to establish regulations on dismissal calling for companiesユ social responsibilities to account and rules-observedworkplaces and society. Furthermore, a movement is developing to reject the Premier Koizumiユs "structural reform" that has led to "massive bankruptcy and unemployment" through reorganization and culling out of small- and medium-sized enterprises and local financial institutions. In doing so, the movement aims to change Japanユs economy and politics into ones that serve peopleユs interests.

   The National Exchange Meeting intends to make clear what these movements have achieved respectively and what lessons should be drawn from them. It also aims to bring together and combine all those movements carried out in each workplace and community, and to stimulate discussion on the direction for further development of these movements.

2. Principal Characteristics of
Todayユs "Streamlining" under Restructuring

   In Japan today, in all the industries, particularly in major car and electrical manufacturers, corporations are launching massive "rationalization" offensive in the name of restructuring, making use of the ideological offensive based on neoliberalism and market principles. These attacks, hand in hand with the international industrial reorganization, are being carried out on the pretext of "surviving" the global competition. They are characterized mainly by the following.

(1) Largest-ever scale workforce reduction and forced retirement have become common in all industries

   Even the government statistics released over several months indicate Japanユs unemployment rate recording the mid 5 percent, and the number of the jobless, around three millions and a half. According to the survey conducted by the Tokyo Shoko Research, Ltd., 80 percent of the companies whose stocks are listed on the Tokyo Stock Exchange are cutting their workforces, 70,000 decrease from the figures for the half year ended September 2001 as compared with the same period of the previous year. The data on the downsizing by large corporations released to the media alone shows that the number had increased to about 250,000 in the period between August 2001 and March 2002. With the future staff-reduction plans taken into account, estimably the number will reach into 550,000. Big companies aim at major personnel reduction as seen in the cases of leading electrical and automobile manufacturers that plan to cut ten and several thousand to over 30,000 per company or group alone.

   An important method of such downsizing is to "solicit voluntary retirement," which has produced a large number of the "workers who choose to retire," bereft of their hope for the companies pushing ahead with restructuring. Meanwhile, companies are violating human rights of those workers who refuse to retire against their employersユ grain. They would coerce such workers to retire, in complete disregard of the Labor Standards Law and legal precedents. They would also take away assignments from the workers or box them into an "isolation room," trampling upon their human dignity.

   At the same time, massive personnel reduction has caused a shortage of manpower in the workplace, expanding unpaid overtime work and long extensive labor among the remaining workers. As seen in the increase in deaths from overwork, deterioration in workersユ health becomes more and more serious. In the manufacturing and other industries, it is now difficult to carry down the skills and techniques, which affects the quality and safety of products.

(2) Thorough personnel cost reduction in total spending, through wage cut and employment of flexible workforce

   The Japan Federation of Employersユ Association (Nikkeiren) published in 1995 a report entitled "Japanese-Labor Management Relations in the New Era." In the report, it announced that the "lifetime employment" and "seniority" systems, both of which have sustained the "in-house" mantra, the basis of the "Japanese labor-management relations" would be completely changed. The report also set out the introduction of a "employment system that accommodates the diversification of employment and job patterns" and a "personnel and wage management based on job evaluation and performance."

   After the publication of the report, the financial circles started to advocate the need of wage cut, rather than wage increase, under the disguise of Japanユs "wage level marking the worldユs highest" and "deteriorating competitiveness due to the high-cost structure." They have pushed ahead with the wage cut, revision of the annual pay hike and various benefits, abolition of the retirement allowance, and reduction of welfare expense.

   Meanwhile, the business world has introduced what they call "new personnel system," a personnel and wage system based on "performance and achievement", with "flexible" wage and salary cost, which means payment for achievement will be made not by wage raise but by lump-sum money. They have also adopted a "flexible workforce" system to replace regular workers with unstable employment labor such as part-time, dispatched or contracted workers who are low-waged and without rights. In this way, workers are facing a thorough, overall personnel cost cut by companies.

   In the 2002 Spring Struggle, Toyota imposed on workers no pay hike; while it had gained a highest-ever consolidated pretax profit of 1 trillion yen. This was a defiant declaration against workers from Japanユs leading company that no company, no matter how big profit it makes, will not accept pay hike. Another defiance facing workers, which amounted to impermissible act of disloyalty, was that one of the major electrical manufacturing companies announced wage cut and freeze of annual pay raise on the ground of "artificial deficit", the next day it had given its response to wage increase.

(3) "Holding companies" and other forms of corporate reorganization in pursuit of maximum profits

   "Streamlining" under restructuring today is carried out basically through the effort for increasing flexibility of corporate organization and large-scale business reorganization in pursuit of the maximum profits. For example, M&A, or merger and acquisition of companies and business enterprises is being promoted internationally in the name of "structural reform" and "selection and concentration." There are capital and business tie-up with oversea companies such as the one between Nissan and Renault, and business and management integration beyond the borders of prewar family-run zaibatsu conglomerate groups represented by the establishment of Sumitomo Mitsui Banking Corporation. Holding companies have been set up by NTT; by Nippon Kokan K.K. and Kawasaki Steel Corporation, by Nippon Paper Industries Co., Ltd. Daishowa Paper Mfg. Co., Ltd., and by three banks, namely, the Dai-Ichi Kangyo Bank, Ltd., the Fuji Bank, Ltd., and the Industrial Bank of Japan, Ltd.

   The business circles and big companies attach special importance to "pure holding companies" as a form of corporate organization that enables the most effective group management in carrying forward major restructuring and reorganization. They do not engage directly in the business of "pure holding companies," but can pursue the maximum profits by having control over the businesses of affiliated enterprises. They can for example seek after the biggest shareholder value.

   The adverse revision of Anti-monopoly Law in 1997 led to the lifting of the ban on pure holding companies. The first "pure holding company" set up in post-war Japan following that revision was NTT (Nippon Telegraph and Telephone Corporation), which had come into being as the result of privatization of the Nippon Telephone and Telegram Public Corporation. The "pure holding company" NTT, aiming to earn the biggest possible profits in the group, is now imposing on its workers a major "streamlining" scheme in the name of restructuring through outsourcing the main activity to their affiliated companies, East and West, reducing the workforce by 110,000, and cutting wage by 30 percent. In every industry, the move toward the establishment of "pure holding companies" is rapidly expanding. The NTT management intends to further discard unprofitable sections and workforce.

(4) Increasing offshore transfer of production base and aggravation of "hollowing out" of local economies

   Large companies, especially electrical and automobile manufacturers, are increasingly setting up operations overseas on a large scale, in the search of new markets and low-cost on-site production. According to the survey by the Ministry of Economy, Trade, and Industry, it is estimated that the turnout of Japanユs manufacturing industry (including subcontractors), without overseas transfer, will decline in the three years between 2001 and 2003 by 4 trillion yen, and job opportunity, by 145,000. The survey indicates that in the same period, Japanユs 467 business establishments, 60 percent of which are big companies and their affiliates, either have shifted their production overseas or plan to do so.

   Under such circumstances, at home, major companies are cutting off or selling off the unprofitable operations. There is an increasing number of unilateral closure or scaling down of domestic factories due to the companiesユ transfer of production bases offshore. They are also abandoning subcontractors and those companies they have business connections with, by expanding overseas procurement of parts and imposition of what is called "Asian price" on such companies. All these have further accelerated "hollowing out" of local industries in Japan.

   What is more, many local financial institutions have deliberately been driven into business "failure," as the result of banksユ reluctance to lend or calling-in of an excessive number of loans, combined by the inspection standards set by the Financial Services Agency that treat local financial institutions such as local banks, credit unions or associations, which have close relationship with regional economies, equally with major banks. One-sided withdrawal of large-scale retail stores, whose forcible inroad has washed out local shopping areas, is helping the "hollowing out" of regional economies. All these have caused serious social problems; increase in the jobless, expansion of employment insecurity due to loss of job opportunities and increasing school-leavers without employment, bankruptcy and business closure of small- and medium-sized traders and manufacturers, and destruction of family life.

(5) Government assists in restructuring that exacerbate "massive bankruptcy and massive unemployment," in partnership with large companies

   What is important is that the government, whose primary role is to defend workersユ employment, is supporting and cooperating with restructuring schemes at the request of the financial circles and major corporations, by making "adjustments" to such laws as labor regulations and companies act.

   In the field of labor regulations, since the mid 90s, the government has forced through adverse revision of various laws, overriding objections from broad sections of workers and trade unions. It changed the Labor Standards Law for the worse to allow more "flexible" management of working hours and hiring contract, under the pretense of "deregulation." It changed the Contingent Workers Law to liberalize in principle areas, which are allowed to use temporary workers. The Employment Security Law was also revised so as to expand private fee-charging employment agency.

   The "adjustment" to the companies act was designed to simplify the procedures of corporate regrouping. To this effect, the ban on "pure holding companies," which had been outlawed after the Second World War in order to prevent zaibatsu conglomerates from coming back to life, was removed. Spinning-off of one company into separate companies and "split-up" were also legalized. Furthermore, the Financial Revitalization Law and the Industrial Revitalization Law were enacted, both of which enable the investment of taxpayersユ money to support corporate restructuring. The Koizumi Cabinetユs "structural reform" policy has also helped to gear up restructuring carried forward at the sacrifice of workers and people. This policy, through "final disposal of non-performing loans" and other schemes, promotes reorganization and selection of small- and medium-sized enterprises, and scraps local financial institutions at the best interest of the big companies, allowing the law of the jungle to prevail in Japanese society.

   Unlawful, unfair restructuring NTT and other major companies are pushing ahead with in the workplace, and many of their outrageous acts against workers that violate or evade the law, have become issues both at home and internationally; they were brought up even in the arena of the United Nations.* Despite all this, the government has taken no measures against such conducts on the part of corporations, giving silent approval to them. Even the court has tolerated some of such cases. This poses a serious problem.

3. Contradictions of Restructuring Offensives and the Achievement of the Struggles against them

(1) Corporationsユ "abandoning of social responsibility" and "breaking of rules" are their weak points

   Restructuring offensives carried out in corporate downsizing are imposing extremely harsh sacrifice on workers and the people. At the same time, the offensives themselves have many major contradictions and weak points from the social point of view.

   The biggest contradiction and weak side, which is also the main target of our movement, are corporationsユ "abandoning of social responsibility" and "breaking of rules." While ostensibly using globalization as an excuse to push ahead with the "streamlining" in the name of restructuring, they are 1) abandoning responsibility for employment and social responsibility, a conduct unacceptable by internatoinal standards, and 2) "breaking rules" in disregard of the existing laws including the Labor Standards Law, judge-made laws and fundamental human rights.

   Further, the destruction of lifetime employment and seniority criterion, as well as massive staff reduction including those in managerial positions are expanding conditions for unity of broader sections of workers, irrespective of union membership. Also, closure of factories, cutting down of establishments, and abandoning of subcontractors, which affect regional economies, have increased conditions for a united struggle in the local community that involves local governments and those on the conservative part.

   The current trend to consider restructuring as "panacea," has raised criticism and concerns even from within the financial world that such a trend will exacerbate the "recession" and cause moral hazard among corporations.

(2) Offensive campaign based on the workplaces and the united efforts can fight back restructuring

   The role of trade unions in the workplace is critical in the struggle to secure jobs against restructuring. In their industrial relations, unions, regardless of the number of membership, must play their basic role such as the maximum use of the right to collective bargaining. In doing so, they should directly take up how unjustifiable restructuring is and put forward the demand for job security before the management. Now that restructuring targets all workers including those in managerial posts, it is particularly important to bring together all the workers in the workplace, regardless of employment patterns or positions, around the basic demand against restructuring, as well as urgent, aggressive demands concerning job security and working conditions.

   We have witnessed a growth of the struggle to counter corporate restructuring in many workplaces and communities, as seen in the struggle against Nissanユs restructuring. In the workplaces of affiliates of the National Confederation of Trade Unions (Zenroren), workers, in the face of harsh "rationalization" through personnel cut, have attained results, if only partially. Without tolerating dismissals or worsening of working conditions, they have won withdrawal or review of the restructuring plan.

Here are many examples of workers victory in struggles.

   In Seishin Plant of Tetra Pak Japan, workers got the company to take back its factory integration and closure plan. Workers of Asia Electronics, in their struggle against a massive dismissal plan due to the split-up and transfer of business, part of the strategy of the parent company Toshiba, succeeded in securing jobs and in establishing a prior-consultation system on corporate reorganization.

   At NCR Japan, the struggle of workers who were sent to a "cell" or an isolation room because they refused the transfer to other firms, won a total victory. Another victory was achieved in the struggle against "transfer" as an exemplary punishment to the workers at IBM, who opposed the forcible transfer to other company due to the spin-off. There was a struggle that succeeded in getting the company withdraw its plan to stop hiring part-timers. The municipal workers also had a victory over a privatization plan according to municipality restructuring.

   At Takamizawa Electric Co., workers are fighting against the union busting, factory closure and dismissals by Fujitsuユs holding company. Despite the nationユs biggest internal reserve and a huge amount of profit it makes, NTT is conducting various acts against or beyond laws to coerce the workers to transfer to separate companies with reduction of 110,000 employees and a wage cut by 30 percent, but workers are carrying on their struggle. Many workers in different industries are fighting vigorously against outrageous restructuring offensives all over the country.

   Furthermore, various movements have grown in many parts of the country. In cooperation with the movement in the workplace to oppose unjustifiable restructuring that tramples upon "rules" such as the existing laws and judicial precedents, parliamentarians have pressed the government in the Diet to take steps to ban forced retirement, root out "unpaid overtime," enact a law to regulate dismissals, and establish equal working conditions and treatment between full-time and part-time workers, all designed for the establishment of "work rules." A wide spectrum of forces, such as trade unions, traders and manufacturers, the Japanese Communist Party and citizens groups, are working together under the slogan of "Defend Regional Economies" from outrageous practices of large companies and the misgovernment. Local governments are also joining in this united effort.

(3) For further development of the movement through exchange of various experiences of struggle carried out throughout Japan

   The National Exchange Meeting should shed light to the actual situation mentioned above and what the movement has achieved. It is also important to have a thorough discussion on how we develop in every part of the country the struggle to repel the restructuring offensives in defense of employment, subcontractorsユ business, and local economy into a peopleユs united movement, combining it with the public opinion critical of high-handed acts of large companies that abandon their social responsibility.

   Note: * The United Nations Committee on Economic, Social and Cultural Rights issued in August 2001 "suggestions and recommendations" to the Japanese government, which include the following: Japan should 1) adopt the necessary legislative and administrative measures to reduce working hours in both public and private sectors; 2) take measures to ensure that workers over the age of 45 years maintain their previous levels of wages and job security; and 3) undertake measures to secure social security benefits for those retiring before the age of 65, as the age of eligibility for the public pension system gradually increases from 60 to 65 years.