Celebrating its 10th anniversary, Rengo (Japanese Trade Union Confederation) held its sixth biennial convention on October 14 and 15, 1999. The conference decided on Rengo's activities for the coming two years. The conference criticized excessive belief in the market. It agreed that policies which leave everything to the market will actually curb economic vitality by widening social inequality, and that the market cannot work properly without clearly defined rules and safety-nets. It stressed the importance of "social fairness," and supported policies which would achieve a "worker-centered social welfare society."
Discussions focused on the worst unemployment rate since the end of World War II. Mr. Kiyoshi Sasamori, General Secretary of Rengo, stated that "job security is the lifeline of labor unions, and we must stand up to managers who are reluctant to take social responsibility, even as they claim that we are "insensitive to realities". The conference asked the government to create 1.4 million jobs, to deal with unemployment, and to allocate ¥5 trillion to that end in its second supplementary budget for fiscal 1999. It also called for the introduction of Japanese-style work-sharing by reducing the amount of overtime, and for the implementation of Rengo-version job placement service. Finally it considered pushing for the enactment of a comprehensive employment contract law which would provide strict guidelines for the dismissals of employees.
Some speakers argued that it is impossible to safeguard jobs simply by stubbornly resisting employers. They called for unions to foresee change before it happens and to act before the government and employers even if it means giving up some of their "vested rights."
Rengo has decided to give its main support to the Democratic Party of Japan, the largest opposition party, but to also cooperate with the Social Democratic Party, Komeito and the Liberal Party.
The membership of Rengo was about 7.88 million 10 years ago, and stood at about 7.48 million as of June 1998. Japan's unionization rate declined to 22.4 percent in 1998, due partly to increases in the number of non-regular employees such as part-time workers who have been employed to replace regular employees. Labor unions have been too slow in organizing non-regular employees. In 1996 Rengo established guidelines for organizing such workers, and founded "regional unions" to which individual part-time workers in a region could affiliate. Rengo now plans to put more effort into these units in order to better organize non-regular employees.
On October 18 Nissan Motors Co., Ltd. unveiled its restructuring plan. Titled the "Revival Plan," the most drastic measures will result in a reduction of the workforce by 21,000 (14% of the group's total workforce) over the coming three years. It calls for the closure of five factories beginning in March 2001, including the Murayama factory in Musashi-Murayama, Tokyo which produces the "March" and the "Skyline." The plan also envisages a reduction in the number of suppliers of parts and materials to half, and a fundamental re-examination of the relationship with affiliated companies. By the end of fiscal 2002, the final year of the plan, Nissan Motor expects to have cut back on costs by ¥1 trillion.
With its focus on cuts in production, personnel and costs, and in its fundamental re-examination of the relationship with affiliated firms, the plan is unprecedented in scale and content in the Japanese automobile industry. It will thus have a great impact on the business world in Japan.
Mr. Carlos Ghosn, who became Nissan's Chief Operating Officer as a result of Nissan's capital tie-up with Renault in March 1999, has set as the company's immediate target the restoration of profitability in fiscal 2000. The end goal is to make a consolidated operating profit equivalent to 4.5 percent of sales by fiscal 2002, and to cut the company's interest-bearing liabilities to half of the present ¥1.4 trillion. However, considering that the company's loss on a consolidated basis this fiscal year is expected to be ¥590 billion, the target will be fairly difficult to achieve.
With regard to employment issues arising from executing the Revival Plan, management states that they will secure jobs for all employees at factories due to close by transferring them to other factories, and that they are ready to pay extra retirement allowances to employees who have difficulty in moving to other factories. They claim that it is possible to achieve workforce cut-backs through attrition, parting with non-core businesses, an early retirement program, and other measures.
Nissan's union criticized the plan. From the viewpoint of safeguarding jobs and livelihoods, it claims the measures for workers at closing factories who have difficulty in transferring will not be sufficient. The union is asking management for a thorough discussion of the options, and anticipates having to negotiate with management before the plan comes into effect.
Yukio Takahashi (who represents 190,000 workers as chairman of Nissan Roren [Confederation of Nissan Workers' Unions]) said, "It is regrettable that the factories in Murayama, Kyoto, and Kurihama will be closed less than five years after the closure of the Zama factory. I think that the responsibility of the management is quite large. However, I am cognizant that Nissan would not survive in the 21st century unless it embarks on fundamental reform. The biggest task for the union is to safeguard the jobs of present workers by discussing various issues with management so as to avoid involuntary layoffs under the labor-shedding plan." The union has thus reinforced its basic position that jobs should be safeguarded even when the body actually employing the employee may change.
The closure of the Murayama factory is planned for March 2001. Individual interviews of factory workers due to be moved began last November. Each worker will have three interviews before March 2000, and personal circumstances such as housing and family members will be taken into account, along with preferences as to where they would like to move. By the end of March 2000, Nissan plans to initially inform each of its employees about their new workplace and their new duties.
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