THE TOYOTA by pengxuebo

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									                                         THE TOYOTA
               THE RACE TO THE BOTTOM IN THE AUTO INDUSTRY




National Labor Committee
75 Varick Street, Suite 1500
New York, NY 10013

Tel: 212-242-3002
Fax: 212-242-3821
www.nlcnet.org
nlc@nlcnet.org

Research: Charles Kernaghan, Barbara Briggs,
Xiaomin Zhang, Jonathann Giammarco, James
Saylor, Danielle Rosenthal

Design: Tomas Donoso                           JUNE
THE RACE TO THE BOTTOM




                                             TABLE OF

                    WILL CELEBRITIES ALSO
                                                    3
              CARE ABOUTWORKERS RIGHTS
                     EXECUTIVE SUMMARY              7
                   OVERWORKED TO DEATH
                                                   11
                      AT THE PRIUS PLANT
                                 KAROSHI           19
               ALL ROADS LEAD TO TOYOTA -
                                                   21
                 TOURING A TOYOTA PLANT
                                   HOURS           27

              WAGES AT THE TOYOTA PLANT            29
                     LOWERING WAGE AND
                                                   31
                      BENEFITS IN THE U.S.
           TOYOTA’S SUPPLY CHAIN RIDDLED
                                                   35
                  WITH SWEATSHOP ABUSE
            LINKED TO HUMAN TRAFFICKING            39

      SUBCONTRACT WORKERS ALSO CHEATED             43

         WHITE COLLAR WORKERS EXPLOITED            45

            LINKED TO BURMESE DICTATORS            47
             REPRESSION OF LABOR RIGHTS
                                                   51
                         IN PHILLIPPINES
                     NO RAISE IN 10 YEARS          53

       JAPAN’S MIDDLE CLASS UNDER ATTACK           54

             COMPANY CONTROLLED UNION              57
How tHe researcH was done:                                   In Japan, workers pay a HIgH prIce for
                                                             crItIcIzIng toyota and otHer companIes:
The research was carried out in Japan in early April 2008,
the single most important focus being dozens of inter-       In a fascinating article in the New York Times (June 7,
views with full-time, temporary and subcontract Toy-         2008), reporter Martin Fackler writes: “A decade ago, cor-
ota workers and family members; progressive unions;          porate whistle-blowing was almost unheard-of in Japan.
prominent labor attorneys; academics; and activist           A person’s place of employment was part of his identity,
human, women’s and worker rights organizations. We           and unflinching company loyalty was the highest of vir-
had the opportunity to tour a Toyota auto plant and at-      tues.” However, as Japan’s social contract with the mid-
tempted to visit—but were prohibited from entering—          dle class unravels, with corporations increasingly hiring
a Toyota dorm. We learned a great deal, especially from      low-wage temps, sub-contract and part-time workers,
the workers who took time to speak with us, at consider-     and with wages falling and life-time employment erod-
able risk to themselves--and will, of course, honor their    ing, some workers are beginning to speak out—despite,
request that neither they nor their factories be identi-     as Mr. Fackler points out, “...a still potent risk of ostracism
fied by name. The subcontract workers, especially, were      because of the widely held view that such disclosure consti-
frightened that any public mention of violations in their    tutes an act of betrayal.”
plants would result in retaliation by Toyota, which would
pull its orders from the plant. Despite the very gener-      This is what happened to a Toyota salesman in Osaka
ous and open way the Japanese people received us, the        who dared to speak the truth: “Even supposedly anony-
contents of this report should be attributed solely to the   mous whistle-blowers face risks. Masakatsu Yamada was a
National Labor Committee. We came away with enor-            used car salesman who called such an internal line at Toy-
mous respect for the Japanese people, and feel our two       ota two years ago to report problems, including falsified
countries have a lot in common.                              sales records at the Toyota dealership where he worked in
                                                             Osaka. But the person who took the call, an outside lawyer
                                                             hired by Toyota, told the company Mr. Yamada’s name.


                                                             “After that, Mr. Yamada said, he became a pariah among
                                                             colleagues and eventually left his job. Unable to make
                                                             mortgage payments, he lost his house, and now lives in a
                                                             small apartment, surviving on his wife’s salary as a part-
                                                             time postal worker. While bitter, he says he does not regret
                                                             what he did.


                                                             “ ‘My life is all messed up,’ said Mr. Yamada, 47. ‘But society
                                                             won’t change unless average people like me stand up.’ ”


                                                             (The New York Times, June 7, 2008, “The Salaryman Ac-
                                                             cuses,” by Martin Fackler)
THE RACE TO THE BOTTOM




                                                                  PREFACEBY CHARLES KERNAGHAN




     The American and Japanese people have a lot        shop abuses, including human trafficking. We
     in common. In both countries, excessive cor-       have a lot to learn from each other.
     porate power and greed are destroying the
     middle class as income disparity soars, enrich-    Right now, Toyota and the U.S. auto compa-
     ing the few while the vast majority of us are      nies are locked in a race to the bottom, which
     left behind. As the two largest economies in       will inevitably lead them to adopt each others
     the world, the people of the U.S. and Japan        worst practices.
     should, and could, have a very powerful voice
     in helping to shape a global economy that          If the middle class is going to survive, it is time
     fosters respect for human and worker rights,       for working people in the U.S. and Japan to be-
     protects our environment and promotes so-          gin speaking to one another.
     cial and economic equality. There needs to be
     more dialogue among labor, environmental,
     human and women’s rights organizations and
     students in the U.S. and Japan. If corporations
     are the only ones talking to one another, we
     will just get more of the same.


     In the U.S., we produce too many gas guzzlers.
     But they are made by well-paid, middle class
     union workers who have a democratic voice on
     the shop floor. In Japan, companies like Toy-
     ota make some of the best hybrids. But their
     unions are weak and lack independence—al-
     lowing the widespread exploitation of cheap
     temporary workers in their plants, along with
     a parts supply chain that is riddled with sweat-
1
“THE TOYOTA WAY”




                                                              RY
                                                        INDUST
                                               E AUTO
                                        M IN TH
                                 E BOTTO
                          E TO TH
                   THE RAC
THE RACE TO THE BOTTOM




                      WILL CELEBRITIES
                     ALSO CARE
     What do Julia Roberts, Jennifer Lopez, Brad        Toyota’s Prius is now the fastest selling hybrid
     Pitt, Leonardo DiCaprio, Billy Joel, Bill Maher,   in the U.S. and in the world, for good reason, as
     Cameron Diaz, Jackson Browne, Arianna Huff-        it gets 48 miles to the gallon even in city driv-
     ington and Jessica Alba all have in common?        ing. (To date, one million Priuses have been
                                                        sold worldwide.)
     They all drive a Toyota Prius.
                                                        But what do these celebrities know about Toy-
     These famous celebrities—and others—drive          ota’s labor practices and the conditions under
     a Prius because they are concerned and have        which the Prius and other Toyota vehicles are
     made a commitment to help protect our envi-        made in Japan? Like the rest of us, when it
     ronment.                                           comes to the human and labor rights of Toyota
                                                        workers, the celebrities know very little or re-
     With celebrities leading the way, New York         ally, next to nothing.
     Times correspondent Micheline Maynard
     wrote: “The Prius has become, in a sense, the       WHY IS A COMMITMENT
     four-wheel equivalent of those popular rubber
     issue bracelets in yellow and other colors—it
                                                               AND PASSION TO
     shows the world that its owner cares.” (New                  PROTECT OUR
     York Times, July 4, 2007). In fact, more Ameri-         ENVIRONMENT SO
     can people—57 percent—say they purchased                 OFTEN DIVORCED
     a Prius because it “makes a statement about
     me” than because of “higher fuel economy”—
     which 36 percent cited as their main reason for
     driving a Prius. (Poll done by CNW Marketing
     Research.)



3
                                                                THE TOYOTA




How would these celebrities—and the many            ternational Labor Organization points to Toy-
Prius devotees across America—respond if            ota’s repression of freedom of association at
they knew that a full one-third of Prius assem-     its plant in the Philippines as “an illustration
bly line workers in Japan are hired as “temps,”     of how a multinational company, apparently
with few rights, earning just 60 percent of what    with little regard for corporate responsibility,
full time workers do, and even less when ben-       has done everything in its power to prevent
efits are taken into account? Most Americans        recognition and certification of the Toyota Mo-
have never heard of Kenichi Uchino, who at 30       tor Company Workers Association” (ILO Work-
years of age died of overwork at the Prius plant,   ers Group, December 2003). Once again, the
routinely working 14-hour shifts and putting        “company” union at Toyota has refused to chal-
in anywhere between 107 and 155 hours of            lenge Toyota management for its ties with the
overtime a month—at least 61 1/2 hours of           Burmese dictators or its repression of freedom
which was unpaid. The Toyota Company said           of association with respect for worker rights in
the 61 ½ hours were “voluntary” and therefore       the Philippines.
unpaid. Mr. Uchino left behind a young wife
and two children—a one-year-old son and a           This is not to say that Toyota is another Wal-
three-year-old daughter. Neither Toyota man-        Mart. If Toyota were not in many ways a decent
agement nor the “company” union at Toyota           and very effectively run company, it would not
lifted a finger to help his family survive. The     be the largest auto company in the world. A
Japanese people even have a word for be-            full-time assembly line worker at Toyota has a
ing overworked to death—“Karoshi.” Toyota’s         good paying middle class job, allowing them
parts supply chain is also riddled with sweat-      to raise their families in decency. (Still, Toyota
shop abuse, including the human trafficking         wages in Japan are only about 50 percent of
of tens of thousands of foreign guest work-         union wages and benefits in the U.S.) And if a
ers—mostly from China and Vietnam—to Ja-            full time worker stays “clean,” and does not get
pan, where they are stripped of their passports     injured on the job or fall ill, they will have a job
and forced to work grueling hours seven days        for life at Toyota. By “clean” the workers mean
a week, often earning less than half of the le-     not doing anything to oppose Toyota manage-
gal minimum wage. Sixteen-hour shifts, from         ment or the company union.
8:00 a.m. to midnight, would not be uncom-
mon. Most people have no idea that Toyota—          As we have seen, however, like other corpo-
through the Toyota Tsusho Corporation which         rations, Toyota is far from being perfect. It is
is a part of the Toyota Group—is involved in a      really astonishing—given that Toyota is the
joint venture with the ruthless military dicta-     largest auto company in the world, and with
tors in Burma, where nearly 50 million people       North America accounting for 44 percent of all
live in fear and want. The United Nations/ In-      its worldwide sales—how little we know about
                                                                                                           4
THE RACE TO THE BOTTOM




     Toyota’s labor practices in Japan and in the de-
     veloping world. For whatever reason, Toyota
     has been given a pass in the U.S., with almost
     no serious research regarding Toyota’s labor
     practices. This report is a modest attempt to
     jump-start some serious research on Toyota.


     Nor is this an academic exercise, as Toyota is
     using its size and success to impose its model
     of production—including two-tier low-wage
     contracts—across the U.S., which will result in
     wages and benefits being slashed throughout
     the whole auto industry.                                    TOYOTA WORKERS
                                                               INSTALL AN ENGINE.
                                                        Source: www.toyoland.com




5
THE RACE TO THE BOTTOM




                                                    THE TOYOTA
                                             EXECUTIVE SUMMARY
     Celebrities like Brad Pitt, Julia Roberts, Leonar-                   low wage
     do DiCaprio and others have helped turn Toyo-
     ta’s Prius into the environmental “equivalent of
     those popular rubber issue bracelets in yellow       A full one-third, or 10,000 Toyota assembly line
     and other colors—it shows the world its own-         workers, are low wage temp and subcontract
     ers care.” In fact, 57 percent of Americans who      workers who earn less than 60 percent of what
     purchased a Prius said they did so because “it       full time workers do. Temps have few rights
     makes a statement about me.” Toyota’s Prius,         and are hired under contracts as short as four
     the best-selling hybrid in the world does get        months.
     48 miles to the gallon. (New York Times, July
     4, 2007)
                                                                 oVerworked
     But what do these celebrities and the rest of
     us know about the labor practices and work-
     ing conditions under which the Prius and other       Mr Kenichi Uchino died of overwork at Toyota’s
     Toyota cars are made in Japan? Really nothing.       Prius plant when he was just 30. He was rou-
     Why is the commitment to protect our environ-        tinely working 14-hour shifts and putting in
     ment so often divorced from a similar concern        anywhere from 107 to 155 hours of overtime
     to protect human and worker rights?                  a month—at least 61 ½ hours of which were
                                                          unpaid. Toyota said the 61 ½ hours were “vol-
                                                          untary” and therefore not paid. Mr. Uchino left
                                                          behind his young wife, a one-year-old son and
                                                          a three-year-old daughter. The Japanese peo-
                                                          ple even have a word for being overworked to
                                                          death: “karoshi.” An estimated 200 to 300 work-
                                                          ers a year suffer serious illness, depression and
                                                          death due to overwork.
7
                                                               THE TOYOTA




        sweatsHops                                                            toyota
         and                                                                      by
                                                                              tHe
Toyota’s parts supply chain is riddled with         The UN/International Labor Organization
sweatshop abuse, including the human traf-          points to Toyota’s suppression of freedom of
ficking of tens of thousands of foreign guest       association at its plant in the Philippines as “an
workers—mostly from China and Vietnam—to            illustration of how a multinational company,
Japan, where they are stripped of their pass-       apparently with little regard for corporate re-
ports and forced to work grueling hours seven       sponsibility, has done everything in its power
days a week, often earning less than half the le-   to prevent recognition and certification of the
gal minimum wage. Sixteen-hour shifts, from         Toyota Motor Company Workers Association.”
8:00 a.m. to 12:00 midnight are common.             (ILO Working Group, December 2003.)


                 lInked to                               toyota leads


Toyota—through the Toyota Tsusho Corpora-           Toyota, now the largest auto company in the
tion which is part of the Toyota Group—is in-       world, is using its size and success to impose
volved in several joint business ventures with      its two-tier, low-wage model at its non-union
the ruthless military dictators of Burma, which     plants across America, which will result in a
put revenues into the pockets of the dictators      race to the bottom with wages and benefits
who use it to repress Burma’s 50 million peo-       being slashed throughout the entire auto in-
ple.                                                dustry.




                                                                                                         
THE RACE TO THE BOTTOM




            toyota’s     Toyota reached record profits of $16.7 billion
                         in its fiscal year ending March 31, 2008. Toy-

              profIt     ota is earning $45.8 million a day, every day
                         of the year.
        reacHes $16.7    Toyota sells more vehicles in the U.S. (2.92
             bIllIon     million) cars, vans and trucks—than in Japan
                         (2.19 million) where its sales are falling.

                         One third of Toyota’s worldwide sales are
                         in the U.S. The American people purchase

           purcHase      56,923 Toyota vehicles each week.


             toyota
       VeHIcles eacH
               week




9
THE RACE TO THE BOTTOM




                          OVERWORKED TO

     As soon as he graduated from high school at
     age 17, Kenichi Uchino went to work for Toyota
     in April 1989. This had always been his dream.
     He grew up in Toyota City, where both his father
     and grandfather worked at Toyota plants. As a
     child he loved washing his father’s Toyota.


     At 4:20 a.m. on Saturday morning, February 9,
     2002—13 hours into his typical 14-hour night
     shift at the Toyota Prius plant, 30-year-old
     Kenichi Uchino suddenly collapsed. He was
     taken to the hospital where, twenty minutes
     later, he was pronounced dead. He left behind
     a young wife, a three-year-old daughter and a
     one-year-old son. The court in Nagoya City, Ja-
     pan ruled that Mr. Uchino’s death was due to
     overwork at the Toyota Prius plant and ordered
     the Labor Ministry and Toyota to pay the family
     a pension so that the children would not suffer
     any more than they already had.


     In the 30 days leading up to his death, Kenichi
     Uchino had worked anywhere from 106 ½ to           KENICHI UCHINO AND FAMILY
     155 hours of overtime—depending upon
     whether one counted the work he took home
     and offsite meetings with colleagues—most
     of it unpaid. “Uchino was engaged in volun-
11
                                                                 THE TOYOTA




tary quality control activities,”—quoting from       Kenichi Uchino was a good worker. But as Toy-
a Nagoya newspaper article published De-             ota management added more and more re-
cember 1, 2007—“which Toyota argued were             sponsibilities to his work load, he began to feel
performed off the clock. But Judge Tamiya ac-        the strain of the enormous overtime—most of
cepted the wife’s argument that those activities     it unpaid—that was required of him.
were effectively within the scope of Uchino’s
work at Toyota.” Even leaving aside the home         Kenichi worked as a quality control inspector
work and offsite meetings, the court ruled that      in the Tsutsumi plant in Toyota City where they
Mr. Uchino had worked 61 ½ hours of unpaid           make the Prius. His main job was to check car
overtime in the 30 days leading up to his sud-       bodies for any defects. If defects were found,
den collapse and death at the Tsutsumi plant         the car had to be removed from the assem-
where the Prius is produced.                         bly line, repaired and only then could go back
                                                     onto the line. He had to keep track of all the
His soft-spoken and still beautiful wife, Mrs. Hi-   car numbers in the line. His wife said his work
roko Uchino, told us that Kenichi was a “kind        was “very stressful,” since he was often called
and good father.”                                    to help out on other assembly lines when
                                                     problems arose. He also had to keep track of
                                                     car parts and report any shortages. Kenichi
                                                     was also put in charge of traffic safety, both in-
                                                     side and outside the plant, but especially with
                                                     regard to work safety on the shop floor where
                                                     car bodies and heavy wagons filled with parts
                                                     were constantly on the move, directed by re-
                                                     mote control. Workers had to move fast and
                                                     be alert at all times.


                                                     After his “official” shift was over, Kenichi had to
                                                     stay to prepare reports for the next shift, letting
                                                     them know what problems he encountered
                                                     and what they should prepare for. Kenichi was
                                                     also a Quality Circle leader, in charge of a group
                                                     of ten or more workers who had to meet sever-
                                                     al times a month and prepare reports suggest-
          MRS.UCHINO, BARBARA BRIGGS,                ing at least two ideas each month to increase
          CHARLES KERNAGAHN                          productivity and lower costs. These mandato-
                                                                                                           12
THE RACE TO THE BOTTOM




     ry Quality Circle meetings were always off the
     clock and unpaid. As a Toyota employee with
     “expert” status, he also had to assemble docu-
     ments and prepare reports for many different
     kinds of meetings. He had administrative re-
     sponsibilities as well, to see that the workers
     on his line were up to date on their holidays
     and other benefits. Kenichi was responsible
     for training the new temporary workers Toyo-
     ta was constantly hiring. In fact, he had been
     training a group of temps the night he died.


     “The last six months were especially tough,”
     Mrs. Uchino told us. At Toyota, workers alter-
     nate shifts every other week, from day to night
     and back again. On the day shift, it was routine
     for Mr. Uchino to work 13, 14 or 15 hours a day,
     from 5:40 a.m. to 7:30, 8:00 or 9:00 p.m., often
     six days a week. The week before his death, he
     worked 82 hours on the day shift—85 hours,
     if you count the three hours of home work he
     did on Sunday. On the night shift, the week
     he died, Kenichi was working 70 hours, put-
     ting in a typical 14-hour shift, from 3:20 p.m.
     to 5:20 a.m. five days a week. When he worked
     the night shift, he left home at around 2:00
     p.m. and often did not return until 7:00 a.m.,
     just as his wife was getting up. Including his
     commute—he drove a Toyota—he was out of
                                                        KENICHI UCHINO AND FAMILY
     the house 17 hours a day. He was sleeping just
     four or five hours a night. When he got home,
     he was often too tired to play with his children
     or eat with his family and would immediately
     collapse into bed.

13
                                                                THE TOYOTA




On the weekends, when he was not catching             ed Toyota’s argument and ruled that the num-
up on his sleep, taking work home or partici-         ber of overtime hours actually worked by Mr.
pating in “voluntary” offsite meetings, Mr. Uchi-     Uchino was 106 ½. Even this was a very con-
no loved taking his family on outings driving in      servative estimate, as it did not include work
their Toyota.                                         taken home on the weekends or the informal
                                                      work-related meetings with colleagues away
Mrs. Uchino said her husband did complain             from the plant that management encouraged.
about the grueling hours and constant stress,         The court ruled that Mr. Uchino had worked 61
but not too much, as he always said to her it         ½ hours of unpaid overtime in the 30-day pe-
was “hard, but it can’t be helped….Somebody           riod before he collapsed and died.
had to do it.” For the sake of his family he had to
“maintain a good attitude.” Mrs. Uchino told          Mrs. Uchino put her husband’s true overtime
us, “He kept saying and hoping things would           hours at 155, of which an astounding 110 hours
get better, but they didn’t and he died.”             were unpaid. Mrs. Uchino points out that her
                                                      husband often worked three or four hours on
Mrs. Uchino twice approached the Labor                his days off—as he did on the Saturday before
Standards Inspection Office of the Ministry of        he died, January 26, preparing reports due
Health, Labor and Welfare to seek compen-             the following week. There were also frequent
sation and a pension, so she could raise her          meetings with colleagues outside the factory,
children. Twice she was turned down. It was           often over food and drink. Toyota claims that
not until Mrs. Uchino sought a lawyer’s help          such meetings—where work is discussed—are
that—six years after her husband’s death—the          freely participated in by the workers, none of
Nagoya District Court ruled that there was a          whom are under any compulsion. But in real-
causal relationship between Mr. Uchino’s long         ity, young workers hoping to advance through
working hours at Toyota and his death. Presid-        promotions feel they are under pressure and
ing Judge Toshiro Tamiya declared that “Mr.           are expected to attend such informal work
Kenichi Uchino died from overwork.” Judge             meetings.
Tamiya noted that Mr. Uchino “was so tired
that he could not play with his children.”            Throughout the long six years Mrs. Uchino
                                                      struggled to win a pension for her husband’s
In court, the Toyota company argued that Mr.          death so she could raise her young children,
Uchino had worked only 45 hours of overtime           the union at Toyota—to which Mr. Uchino had
in the month leading up to his death and that         belonged—did nothing, not even lifting a fin-
the other 61 ½ hours were “voluntary” in nature       ger to help her and her children. The Toyota
and “performed off the clock.” The court reject-      union never argued on their behalf for com-
                                                                                                       14
THE RACE TO THE BOTTOM




pensation. Mrs. Uchino told us, “The Toyota union is just
an association to further Toyota management.”


Toyota management never apologized to the family,
never sent condolences, never reached out to the family
and never issued a statement.


Mrs. Uchino told us that in Toyota City “people don’t
talk about problems”—like work-related illnesses and
deaths—“as it reflects badly on Toyota. People tend to
keep it to themselves.”


Mrs. Uchino never set out to be a critic attacking Toyota.
Her struggle was all about her children, to win her dead
husband’s pension so she could afford to raise their chil-
dren in decency, which is the least Toyota owed them.


Mr. Uchino was just 30 years old when he died from over-
work. He had no illnesses and he did not drink or gam-
ble. Today his children are seven and nine years old.




15
THE TOYOTA




             16
THE RACE TO THE BOTTOM




                         court
                         Overtime hours of Kenichi
                         Uchino in the 30 days
                         leading up to his death by
                         overwork as determined
                         by the Nagoya court: 106
                         ½ hours of overtime, of
                         which 61 ½ hours were
                         unpaid by Toyota.




17
                          THE TOYOTA




     Overtime hours of
 Kenichi Uchino in the
 30 days leading up to
his death by overwork
        as submitted by
     rs.
   Mrs. Uchino and her
attorney: 155 hours of
overtime, of which 110
 hours were unpaid by
               Toyota.




                                       1
THE RACE TO THE BOTTOM




                                                               KAROSHI

     The Japanese workers even have a name for         work, and his family was due compensation
     it—“Karoshi,” meaning overworked to death.        and a pension.


     The same year Kenichi Uchino died from over-      Another Toyota employee—just 32 years of
     work, so did another Toyota employee, this        age—committed suicide on January 17, 2005.
     time a white collar technician. Management        He had been put in charge of setting up and
     had put him in charge of designing an assem-      unifying a new computer security system for
     bly line to mass produce a new model Toyota       Toyota, both in Japan and internationally.
     car. It was an enormous responsibility, and he    Along with his own workload, he was respon-
     was under constant pressure from his immedi-      sible to also oversee numerous computer se-
     ate superior to meet the production deadline      curity subcontractors around the world who
     so that his boss could get a promotion. He was    were hired to work on this massive project.
     leaving home each day at 7:30 or 8:00 a.m. and    The work load was not only enormous, but set-
     not returning until 11:00 p.m., 12-midnight, or   ting hard and fast deadlines was central to “The
     1:00 a.m. Including his commute, he was work-     Toyota Way,” which added even more pressure
     ing 15 to 17 ½ hours a day. The workload and      to finish on time. The first deadline was a Janu-
     pressure was too much, and in November 2006,      ary 15 meeting with high-level Toyota man-
     the 46-year-old man died of a hemorrhage.         agement to review the status of the new com-
                                                       puter security system. A second meeting was
     Toyota management may very well have gotten       to follow on January 17, 2005, which was the
     away claiming no responsibility for the man’s     day the young man committed suicide.
     death, except someone at the plant leaked to
     the man’s family that Toyota monitors its park-   Despite the fact that the company union at
     ing lot, noting the time each employee parks      Toyota refused to help the dead man’s family,
     in the morning and leaves at night. With this     who begged the union to press management
     information, the Labor Ministry determined        for his pension in March 2006, the Labor In-
     that the technician’s cause of death was over-    spection Standard Office confirmed that the
19
                                                             THE TOYOTA




                                                   Ken Shimizu/AFP-Getty Images

computer technician’s death was caused by
overwork. As such, the family will receive a
pension and compensation for his death.


Even high level management at Toyota is not
protected from the pressure of overwork. The
chief engineer of a new hybrid model Camry
died of a heart attack on January 2, 2006, just
days before the Camry he designed won the
“Car of the Year Award” in Detroit. Toyota sent
a small gold replica model of the Camry to his
wife. He was just 45 year old when he died from
overwork. He faced enormous stress right up
the deadline. At the last moment, there was
trouble with the engine catching fire, and also
cost overruns, which left him working around
the clock for months leading up to the new
hybrid Camry’s release. Constant stress led to
his heart attack, making him another “Karoshi”
victim.


A prominent Japanese attorney who is very
familiar with such “Karoshi” cases believes that
the number of Toyota auto workers who fall ill,
suffer serious depression and actually die from
overwork is understated by at least 200 to 300
workers each year.




                                                                                  20
THE RACE TO THE BOTTOM




                                                          ALL ROADS

     In Aichi Prefecture (equivalent to our states) in    It is estimated that at least another 280,000
     Japan, where auto manufacturing is the largest       workers in Aichi Prefecture are employed in
     industry—employing 480,000 workers—it is             subcontract plants primarily supplying auto
     said that “all roads lead to Toyota City,” which     parts to Toyota, with some production going
     is, in fact, borne out on local maps of the re-      to other auto companies such as Honda and
     gion.                                                Nissan. This subcontract supply chain is rid-
                                                          dled with sweatshop abuse, including the hu-
     The Toyota Motor Company directly employs            man trafficking of tens of thousands of foreign
     70,000 people in and around Toyota City, in-         guest workers—mainly from China and Viet-
     cluding 40,000 white collar, or office work-         nam—who are stripped of their passports and
     ers, and 30,000 assembly line workers. It is         forced to work grueling hours, often earning
     little known in the U.S. that a full one third, or   less than half of the legal minimum wage.
     10,000, of Toyota’s assembly line workers are ei-
     ther temps or subcontract employees paid just
     60 percent of what full time workers earn, and
     even less when benefits are included. Nor do
     these temporary and subcontract workers be-
     long to the union. Toyota started this practice
     more than 30 years ago when it began hiring
     agricultural workers during their off season.
     The temps are hired under contracts ranging
     anywhere from four months to two years and
     11 months. The two-tier wage system Toyota
     introduced in Japan is now being used by Toy-
     ota in the U.S. to also drive down wages and
     benefits in the U.S. auto industry.

21
                                                                THE TOYOTA




TOURING A

As we approached the Motormachi plant—Toy-           On the shop floor the assembly line workers
ota’s second oldest facility opened in 1959—we       were flying. We watched one worker install a
passed a string of tour busses with their desti-     car door every 70 seconds, from beginning to
nation signs reading “World’s Top Auto Manu-         end, and be in place and ready to start on the
facturer.” Not counting temps and subcontract        next car. This worker would install 51 car doors
employees, the Motormachi factory has 4,700          an hour and 411 in the eight hour shift. As
full time workers, churning out 13,000 cars and      the assembly line does not stop, the workers
vans a month. Mid-level managers and super-          are always moving, darting in and out of cars,
visors from Toyota plants in China, Vietnam,         repeatedly bending and twisting to complete
Philippines, Pakistan, India, Thailand, and a half   their operations. All the parts were pre-sort-
a dozen other countries, were being trained at       ed and constantly supplied to the workers, so
the Motormachi plant. The trainees would stay        there was not a moment’s hesitation. A senior
anywhere from a few weeks to up to a half year       worker explained to us that it would be very dif-
before returning home.                               ficult for someone over 40 years of age to keep
                                                     up this pace. Nor did we see any women on
In the body welding section, those not famil-        the assembly line. Temporary and subcontract
iar with auto manufacturing were amazed at           employees work right next to full time work-
the delicacy and precision of the huge robots,       ers, only distinguished by the different color
as they darted in and out of the car body they       lettering on their hats—blue for full time and
were soldering. Moreover, the robots were            grey for temps. Despite their lower wages and
programmed to weld different model car bod-          benefits, the temps were flying through their
ies, and even minivans, in whatever order they       work. Toyota Management tells the temps that
entered the assembly line. In English, a large       if they show themselves to be special workers,
sign read: “I’m proud of my body shop.”              they will be hired full time, so they work even
                                                     harder. Of course, none of this is discussed on
                                                     the official factory tours.

                                                                                                         22
THE RACE TO THE BOTTOM




     The same silly children’s melody was playing         This is part of Toyota’s corporate philosophy
     over and over again in the factory, which could      of “continual improvement.” Every month, the
     easily get on your nerves. It was a safety warn-     group must meet and come up with at least
     ing. When the music was playing it meant that        two suggestions to improve productivity and
     car bodies and wagons loaded with auto parts         lower costs. Though the activity is mandato-
     were moving about the factory by remote con-         ry, management considers it voluntary and it
     trol, and the workers had to be careful where        is not paid. Still posted on the meeting room
     they walked.                                         wall were Quality Circle reports from the end
                                                          of 2007. One group decided to increase their
     Child-like images of animals were posted on          auto parts production from 380 to 500 pieces
     the factory walls extolling the workers: “Let’s      a day for the three months of October through
     clean the factory.”                                  December. Individual workers agreed, writing
                                                          “let’s cooperate on this,” while another wrote,
     When we were in the factory, it was late after-      “let this dream become a man,” and so on. Uni-
     noon. The workers were working at 96 percent         laterally, these workers had increased their
     efficiency, with a large overhead electronic         production goal by 120 pieces a day, or by 30
     scoreboard posting the goal for the dayshift at      percent, with no increase in wages.
     313 cars, whereas the workers had produced
     just 268, when by that time of day they should       Management rewards workers who offer pro-
     have completed 277 cars.                             ductive suggestions with a free lunch or a cou-
                                                          pon worth about $5.00 which can be redeemed
     Workers take their ten minute break right next       at the company store. Sometimes, the entire
     to their line, at a narrow table, with a shelf un-   10 to 15 person group will receive $20 to $30
     derneath where they can store snacks, drinks,        in coupons to use at the Toyota store. Despite
     cell phones, clean t-shirts, etc. However, when      its huge annual profits, rather than give across
     we were there, it seemed that the majority of        the board wage increases, Toyota is increas-
     the workers kept working right through their         ingly moving toward merit-based bonuses and
     break in order to set up their parts and tools       incentives.
     before the assembly line started up again.           We asked a senior employee if any workers
                                                          participating in Quality Circle meetings ever
     We had the chance to visit one of the meet-          raised complaints or mentioned anything criti-
     ing rooms on the shop floor, which was just          cal of Toyota management. He immediately
     large enough to hold 15 people. Every work-          responded:”No—never—they would never
     er at Toyota must participate in Quality Circle      even think of it. It’s impossible!”
     meetings, which they do in groups of 10 to 15.
23
                                                               THE TOYOTA


                                                     TOYOTA WORKERS HAVE A SINGLE ROOM AND SHARE A
                                                     PUBLIC BATHROOM IN THE HALL.

                   company
Toyota houses about 10,000 workers in its
company dorms. In the single workers’ dorm,
full time workers have their own room with a
table, chairs, refrigerator and TV. There is no
bathroom in the room. Instead, there are pub-
lic toilets and showers on each floor. Rent for
a single dorm room is about $100 a month.
Security at the dorms is very strict with guards
prohibiting anyone other than the workers
from entering. Not even a close friend can get
in.


Temporary and subcontract workers can stay in
Toyota’s dorms for free, but two or even three
people must share a small room. These rooms
have small refrigerators and televisions, but no
table or chairs. Some single rooms are divided
by paper-thin sliding doors into two or even
three sleeping cubicles.


Temporary or subcontract workers staying in
the dorm are prohibited from driving to the
factory and instead must go by bike or use the
Toyota company bus.


Toyota also has two and three-room company
apartments for married couples, which cost
approximately $300 a month.


There is a 10 year limit on full time Toyota work-
ers staying in the company dorms.                    TEMP WORKERS WAIT FOR BUS AT TOYOTA DORM.
                                                     MIDDLE.

                                                                                             24
THE RACE TO THE BOTTOM




                                              toyota
                                         assembly lIne
                                           workers In
                                              tHe u.s.


                                      Like their counterparts in Japan, assembly
                                      line workers at Toyota’s non-union U.S. plants
                                      also pay a heavy physical price, as the speed
                                      and repetitiveness of their work puts enor-
                                      mous stress on a worker’s body. The United
                                      Auto Workers Resource Center in Kentucky
                                      has documented more than 1,800 cases of
                                      workers injured at Toyota’s Georgetown,
                                      Kentucky plant—including ruptured disks
                                      and lacerated fingers—who are no longer
                                      employed there.



     Images: Toyota Museum Brochure




25
THE RACE TO THE BOTTOM




                                                                     HOURS


     There are two shifts at Toyota’s plants. The day
     shift is from 6:25 a.m. to 3:15 p.m., or eight hours
     and forty-five minutes, five and sometimes six
     days a week. The night shift is from 4:10 p.m.                       DAY SHIFT
     to 1:00 a.m., five nights a week. Every other
     week, workers must alternate from the day to
     the night shift and back again. It is routine for
     workers to stay for one hour of overtime each                                 w/overtime
     day, which does not include what manage-
     ment refers to as unpaid “voluntary” work, such
     as the mandatory Quality Circle meetings. The          6:25 a.m. to 8:25 a.m. (work)
     workers receive three breaks, 45 minutes for
     lunch or supper, and two ten minute breaks.


     The regular work week in Japan is 40 hours,            8:35 a.m. to 10:35 a.m. (work)
     and overtime is limited to five hours a week.



                                                            11:20 a.m. to 12:50 p.m. (work)




                                                            1:00 p.m. to 3:15 p.m. (work)



27
THE TOYOTA




             2
THE RACE TO THE BOTTOM




                                                                WAGES

     The base wage of a full-time assembly line
     worker at Toyota is $19.34 an hour. However,
     when various bonuses are added, the average
     full-time wage rises to $20.49.


     Full-Time Workers Earn $20.49 an Hour


     Toyota full-time workers earn a base wage of
     350,000 Yen a month, with an average of an-
     other 20,833.33 Yen in bonuses. (As of April 24,
     2008, the Wall Street Journal put the exchange
     rate at 104.42 Yen to $1.00 U.S. Dollar.)


     Temporary workers—who make up one-third
     of Toyota’s assembly line workers—are paid
     a base page of $11.05 an hour, which rises to
     $12.13 when bonuses are included. Temps                       FULL TIME
     earn just 60 percent of what full-time work-
     ers earn. When benefits are added, the wage
     disparity is even greater. (For example, full-       $20.49 AN HOUR
     time workers receive child benefits of $18.63
     a month for one child, $33.52 for up to three
     children, and $52.67 for four or more children.
     Also, at Toyota’s cafeteria, full-time workers eat   $3,551.36 A MONTH
     for $3.96 per meal, while temporary and sub-
     contract workers have to pay around $5.94.)

29
                                                                THE TOYOTA




Temps Earn $12.13 an Hour                            egy Toyota is beginning to implement at its
                                                     non-union plants in the South of the United
Temporary workers earn a base wage of                States. Toyota will no longer pay wage close to
200,000 Yen a month with an average of an-           parity with unionized US auto plants. Instead,
other 18,583.33 Yen in bonuses.                      following its low-wage temp model, new Toy-
                                                     ota employees in the U.S. will be hired at just
Temps earn $8.63 (41 percent) less than full-        50 percent above the prevailing manufactur-
time workers. For every temp Toyota hires, in        ing wage in the state or county in which they
comparison with full-time workers, the com-          produce. The downward spiral of auto wages
pany saves $17,381.73 a year in wages, not in-       and benefits is now underway.
cluding the significantly lower benefits paid to
temporary workers. By hiring 10,000 low-paid
temps to work on its assembly lines, Toyota is
able to cut its direct labor costs by $174 million
a year.


By law, all overtime in Japan must be paid at
a 125 percent premium, with night overtime
past 10:00 p.m. being compensated at a 130
percent premium.


The legal minimum wage in Aichi Prefecture
for auto related industries is 820 Yen per hour,
or $7.85. Full-time assembly line workers at
Toyota earn more than two and half times the                                PART TIME
legal minimum. (Outside the auto industry,
the legal minimum wage in Aichi is 714 Yen, or
$6.84 an hour.)                                          $12.13 AN HOUR
On the other hand, the 10,000 temps, or one-
third of those employed on Toyota’s assembly
lines, earn approximately just 50 percent above          $2,102.9 A MONTH
the legal minimum wage. This is of critical con-
cern for a number of reasons, not the least of
which is that it mirrors the cost reduction strat-
                                                                                                       30
THE RACE TO THE BOTTOM




        TOYOTA IS LOWERING

     Toyota has just by-passed General Motors be-        wages and benefits to its workers while Toyota
     coming the largest auto company in the world.       pays $47.50 to $50 an hour.
     For the first quarter of 2008, Toyota sold 2.41
     million vehicles worldwide to GM’s 2.25 mil-        Toyota held its wages and benefits down by
     lion. Also, for the first time, Toyota has passed   setting up non-union plants in the South, far
     Ford in sales as the second largest auto com-       from auto industries’ stronghold in the upper
     pany in the U.S. (In May, Toyota pulled within      Midwest. (Toyota has just one unionized plant
     10,000 vehicles of overcoming GM in sales.)         in Fremont, California, which is a joint venture
                                                         with G.M.) To keep the unions out, Toyota has
     Toyota is now in a position to set, and lower,      been paying hourly wages which are roughly
     wages and benefits across the U.S. auto indus-      comparable with the Big Three, but with much
     try. In September 2007, the Wall Street Journal     lower benefits. Toyota pays around $25 per
     reported “...that Toyota Motor Company…now          hour in comparison with G.M.’s $26 to $28.
     sets the bar for labor costs in the U.S. auto in-
     dustry.” The industry paper, Automotive News        This is about to change. By April 2008, the
     (August 13, 2007) reached the same conclu-          Wall Street Journal was reporting that “Toyota
     sion.... “Toyota is going to set the pattern for    Motor Company is now pushing to lower la-
     the entire industry---wages, benefits and pen-      bor costs in the U.S., say people familiar with
     sions….”                                            the matter….Toyota has stopped pegging its
                                                         wages to UAW rates when it builds new plants,
     Currently, Toyota wages and benefits in the U.S.    company executives said. It won’t cut wages
     are 25 to 30 percent lower than those paid by       of current workers, but new hires will be paid
     the Big Three auto companies—General Mo-            no more than 50 percent above the prevailing
     tors, Ford, and Chrysler. U.S. auto companies       manufacturing wage in the area where a plant
     pay anywhere from $63.65 to $70 per hour in         is located, they said.”



31
                                                           THE TOYOTA




In fact, months earlier, in September 2007,
an internal memo was leaked at Toyota’s gi-
ant Georgetown, Kentucky plant laying out
management’s plans to cut $300 million in la-
bor costs across Toyota’s North American op-
erations over the next three years. Not only
would new hires come in at lower wages—no
longer comparable to U.S. union wages—but
benefits would also be cut, including reduced
health coverage. (New York Times, September
4, 2007)


For example, if the prevailing manufacturing
wage in Kentucky—including first-line super-
visors—is $14.62 an hour, Toyota will pay, at
most, just 50 percent above that, or $21.93 an
hour, which is down $3.07, or 12 percent, from                 at toyota,
its current $25 an hour rate.


With Toyota leading the way, the U.S. auto in-
dustry is now locked in a race to the bottom.          less tHen
Not to be outdone, Hyundai of South Korea
                                                   eIgHt percent
                                                      of camry’s
recently opened an auto assembly plant in
Montgomery, Alabama offering starting wages
of just $14.00 an hour.
                                                     retaIl prIce
                                                 In the U.S., it takes Toyota an average of 30
                                                 hours to build each vehicle. Given that ful-
                                                 ly loaded wages for Toyota workers in the
                                                 U.S.—including wages and benefits—range
                                                 between $47.50 and $50 an hour, this means
                                                 that the total labor cost to make a Toyota ve-
                                                 hicle is just $1,425 to $1,500. The workers’
                                                 wages and benefits amount to less than eight
                                                 percent of a Camry’s retail price of $18,920.

                                                                                                  32
THE RACE TO THE BOTTOM




                                 tokyo
                         more
                     expensIVe
                     tHan new
                         york
     Cost of living comparisons between the U.S.
     and Japan are very difficult to calculate.
     However, one reliable international survey of
     living expenses for expatriate management-
     level personnel living abroad shows Japan’s
     Tokyo ranking as the fourth most expensive
     city in the world to live in, with New York City
     ranking 15th. Tokyo was 22 percent more ex-
     pensive than New York.
                                                           $138 bIllIon
     Mercer’s Annual Cost of Living Survey
     March 2006-March 2007                                   u.s. trade
                                                             defIcIt In
                                                         autos, trucks,
     Comparative cost of over 200 items including
     housing, transport, food, clothing, household
     goods and entertainment, covering 145 cities
     on six continents.                                   parts
                                                        In 2007, the U.S. had a $138,228,970,000
                                                        trade deficit in autos, trucks, buses and parts.
                                                        The U.S. imported $259.2 billion worth of ve-
                                                        hicles and parts, while exporting just $120.9
                                                        billion. The U.S. is running a vehicle and parts
                                                        deficit of $11.5 billion a month.




33
THE TOYOTA




             34
THE RACE TO THE BOTTOM




          TOYOTA’S SUPPLY
       CHAIN
        SWEATSHOP ABUSE
                               “It was
                                                         is mandatory. Routinely, the workers are at the
                                                         factory 97 hours a week, but it was not uncom-
                                                         mon to work even longer. In the last week of
                                                         October 2007, the worker we interviewed had
                                                         been obligated to work seven days, most often
                    -toyota parts worker                 16 ½ hours, from 8:30 a.m. to 1:00 a.m., putting
                                                         in a 108-hour week. When we questioned him
     He worked in a subcontract plant on the out-        on this, he said “Yes, it is impossible, but we did
     skirts of Toyota City supplying auto parts to       it. Everyone was exhausted but we couldn’t
     Futaba Industrial Co. LTD, whose main client        do anything to change the situation. It was
     is Toyota. With $100 million in annual sales, Fu-   like prison.”
     taba is not an insignificant player.
                                                         He worked at a large metal stamping machine,
     At the subcontract plant, the hours are gruel-      stamping out cross member bars (which are
     ing and the work dangerous. Half the workers        used as engine support) with a mandatory
     are full-time employees while the other half        production goal of completing 1,300 cross
     are temps, who have zero rights and are paid        bars per hour, or one every three seconds!
     half the wages full time workers are. The nor-      The work was relentless, exhausting, numbing
     mal shift was supposed to be from 8:30 a.m. to      and dangerous. In a 15 hour shift, he would
     5:30 p.m., or nine hours, with an hour break for    complete 19,500 operations.
     lunch, five days a week. The reality was quite
     different. The typical shift was 15 to 16 ½         At night, he often could not sleep – despite
     hours a day, from 8:30 a.m. to 11:30 p.m. or        being exhausted – because of the constant
     1:00 a.m..                                          throbbing pain in his shoulders and arms. His
                                                         hands also started failing him, and he had
     The workers are allowed one, or two, or at the      trouble holding a glass, which would often just
     very most, three days off a month. All overtime     fall from his hand.
35
                                                               THE TOYOTA




No one was paid anywhere near the overtime          contract workers we heard this fear expressed
legally due to them. There were no paid holi-       over and over again. It was the same with
days.                                               the excessive mandatory overtime. When we
                                                    asked why the workers did not just go home
He had friends and neighbors who also worked        after working 10 to 12 hours, he said the feel-
in other subcontract plants in Aichi Prefecture     ing was that “if they didn’t work the overtime
producing auto parts, where conditions are          to meet Toyota’s [Just on Time] orders, the
just as bad.                                        factory would lose its contract, go bankrupt
                                                    and everyone would lose their jobs.”
We asked him what the workers thought of
Toyota’s Just in Time system – “The system          We never expected to find such fear among
produces only what we need when we need it          Toyota employees and subcontract workers.
and as much as we need.” “The Just In Time          This shocked us.
system,” he said, “is a way of shifting the dete-
riorating working conditions to subcontract         Like every other worker we spoke with, the
plants, with workers bearing the cost of long       general consensus is that over all, working
hours and injuries.” Under such conditions,         conditions and wages are deteriorating across
many workers suffer from repetitive stress dis-     Japan, and – like the U.S. – the middle class is
orders. In subcontract plants, temps and even       under attack and shrinking.
full time workers who are injured, are simply
fired and let go without benefits.


He also admitted that working that many
hours under such conditions, they often make
mistakes, producing many defective parts. Of-
ten the workers will have to stay working off
the clock from 1:00 a.m. to 2:00 a.m. to fix the
defective auto parts.


Despite all the suffering and abuse, the man did
not want his name used or that his subcontract
plant be mentioned. If his factory was named,
Toyota would immediately pull all its orders
and as a result everyone would be fired. The
workers are in a trap, and especially with sub-
                                                                                                       36
THE RACE TO THE BOTTOM


       subcontract
          workers’
      Hours record




      toyota also
                                                               few months, Toyota management has summoned small
                                                               groups of workers at its colossal vehicle assembly com-

      spreads fear
                                                               plex here to attend a presentation titled “Growing in a
                                                               Changing Market: State of the Automotive Industry.”
                                                               Executives describe the presentation as a routine up-
                                                               date for the workers. Workers are shown a map with
                                                               the locations of shuttered Big Three auto plants and a
                                                               breakdown of auto workers’ average wages, from Thai-
      “They [Toyota] want people                               land to Mexico. While no Toyota executive explicitly says
                                                               it, the theme of the presentation, according to workers
      to fear losing their jobs”
                                                               who have seen it, is that Toyota will end up in the same
                                                               troubled waters as GM if something does not change.”
      This is how New York Times reporter Jeremy W. Pe-
      ters described Toyota’s scare tactics at its non-union   --New York Times, September 4, 2007
      plant in Georgetown, Kentucky: “...and over the last

37
                                                            THE TOYOTA




              toyota                             $1.13 billion to the U.S. The parts came pri-

           sweatsHop                             marily from Japan, but also from the Philip-
                                                 pines, China, Thailand and Brazil.
               parts
                                                 Given that Toyota’s auto parts supply chain—
                                                 even in Japan—is riddled with sweatshop
On a single day, March 9, 2008, the Toyota       abuse, including exploitation of foreign guest
Corporation in Japan shipped nearly 900,000      workers from China and Vietnam, what assur-
pounds of auto parts worth $4.6 million to its   ances do we have that these parts were not
assembly plant in Georgetown, Kentucky.          made under illegal sweatshop conditions?


In the first three months of 2008, Toyota        In the first quarter of 2008, the Toyota Corpora-
shipped—not counting auto parts from Mex-        tion in Japan shipped $4,279,467,224-worth
ico—220 million pounds of auto parts worth       of vehicles to the U.S.




marcH 2008 customs record                                                                            3
THE RACE TO THE BOTTOM




                                  TOYOTA LINKED

     Each year, tens of thousands of foreign guest      and in 2009, that first year “trainees” will be
     workers—mostly from China and Vietnam—             covered under Japan’s labor laws. (In June of
     are trafficked to Japan, stripped of their pass-   2007, the U.S. State Department cited Japan in
     ports, cheated of their wages and forced to        its report on human trafficking: “The govern-
     work under abusive sweatshop conditions—           ment should make greater efforts to investigate
     including producing auto parts for Toyota.         the possible forced labor conditions of workers
                                                        in the foreign trainee program.” In response,
     Anywhere from 70,519 to 93,000 foreign guest       in December 2007, the government of Japan
     workers are trafficked to Japan each year. The     announced that it was illegal to strip foreign
     guest workers, who come from China, Vietnam,       guest workers of their passports. However, the
     Indonesia, Philippines, Thailand and Brazil, are   practice continues.)
     stripped of their passports the minute they
     arrive in Japan. During their first year, guest    In the last ten years, there has been a dramatic
     worker “trainees” are not covered by Japan’s       increase in the number of foreign guest work-
     labor or minimum wage laws. As guest work-         ers employed in Aichi Prefecture, home to Toy-
     ers are allowed to stay for up to three years,     ota and the country’s auto industry. The surge
     this means that at any given time there are at     of poor foreign guest workers coincides with
     least 212,000 to 279,000 foreign guest workers     Toyota’s ten year plan to slash the price it is
     in Japan—not including those who may have          willing to pay its auto part suppliers. Toyota is
     illegally overstayed their visas. The Japanese     more than half way into its ten year plan, which
     government is now considering extending the        in the first three years called for price cuts of up
     guest worker visas to five years.                  to 30 percent followed by a further 15 percent
                                                        cut in the fourth through sixth years. There are
     Under pressure—including from the U.S. gov-        four years left in Toyota’s cost reduction pro-
     ernment—the Japanese Diet (congress) is now        gram.
     considering reforming the law, both to man-
     date the return of the guest worker passports,
39
                                                                    THE TOYOTA




Foreign guest workers are not only stripped of           least in the case of Vietnam, it appears that the
their passports—one of the most serious of all           government is profiting off the trafficking of its
human rights violations—they are also prohib-            own people, taking 15 percent of the profits of
ited from leaving the factory they are contract-         the local manpower agencies.
ed to, or even changing the housing they are
assigned. If a guest worker dares change jobs            In July 2007, the International Herald Tribute
or moves, he or she will be immediately and              reported the case of 22 year old Ms. Le Thi Kim
forcibly deported. Moreover, if guest work-              Lien, a guest worker from Vietnam. She often
ers even dare to complain about the abusive              worked 15 ½ hours a day from 8:30 a.m. to past
and illegal conditions, they will also be de-            midnight, seven days a week, while being paid
ported. (A knowledgeable source in Japan ex-             just half of the legal minimum wage at a sub-
plained that the country’s immigration officials         contract plant called TMC, which supplied To-
are “very tough,” making it quite easy to have           kai Craft, which in turn was under contract to
guest workers deported.) This is human traf-             supply auto parts to Toyota and Nissan. Ms. Le
ficking at its worst, as it is only the right to relo-   and the other Vietnamese workers were fined
cate to better factories and more decent hous-           15 cents for every minute they took in the
ing that would isolate and expose the most               bathroom. She and her coworkers sewed arm
abusive sweatshops. The inability to move to             and headrests for Toyota cars.
new housing also leaves the guest workers in
a very vulnerable position, where they are eas-                     GUEST WORKERS
ily cheated and forced to pay wildly excessive
rents.
                                                                    OFTEN PAID LESS
                                                                      THAN HALF OF
The guest workers are in a trap. They also have
to borrow money in order to pay—for them—
the enormous fees that manpower or employ-
ment agencies in their home countries charge
them to purchase their three year contracts in               $2.76 TO $3.32 AN HOUR
Japan, often amounting to $8,800 to $10,000.
The guest workers and their families typically
borrow this money at an interest rate of 10
percent a year, meaning the interest comes                   $47.4 TO $574.60 A MONTH
to $880 to $1,000 a year. This puts the guest
workers under pressure to routinely work over-
time, no matter how excessive the hours. At
                                                                                                              40
THE RACE TO THE BOTTOM




     It is typical for guest worker “trainees” to earn—   Yen or $7.85 per hour in the auto industry in
     especially during the first year when they are       Aichi Prefecture. However, especially in the
     not covered by Japan’s labor laws—Just 50,000        small subcontract factories supplying textile
     to 60,000 Yen a month, or $478.84 to $574.60.        related goods to Toyota, even second and third
                                                          year workers continued to earn as little as 300
     After deductions for food, housing, local and        Yen an hour, or $2.87, which amounts to just
     national taxes and other necessary expenses,         a little over one-third of the legal minimum
     some guest workers estimate their take home          wage of $7.85.
     wages for the entire year amount to less than
     $600.                                                Despite legal limits on overtime, foreign guest
                                                          workers typically toil 75 hours a week, put-
     In September 2006, the Japanese Mainichi             ting in 35 hours of overtime on top of their
     Daily News reported that labor authorities           regular 40 hour workweek. Nor in most cases
     warned 23 subcontract plants supplying Toyo-         is overtime paid correctly—at the legal over-
     ta, that hundreds of their Vietnamese workers        time premium of at least 125 percent, or $9.81
     were being paid below the minimum wage.              an hour. With guest workers, they paid—at
     Of the 40 small subcontract plants producing         best—straight time or, more often, well below
     textile related auto parts—like seat, arm and        the legal minimum wage.
     head rests—23, or 60 percent had serious la-
     bor violations. Apparently, these serious viola-     For a small subcontract plant, such cheating
     tions had been going on in broad daylight for        adds up. For a typical 75 hour workweek, the
     at least five years, since 2001.                     guest workers should have earned $314 for the
                                                          regular 40 hours of work paid at $7.85 per hour
     These guest workers were officially brought          and another $343.44 for the 35 hours of over-
     in under the “Toyota Technology Cooperative”         time paid at the legal 125 percent premium, or
     program which was supposed to be supervised          $9.81 per hour. However, instead of earning
     by the Japan International Training Coopera-         $657.44 a week, many guest workers are paid
     tion Organization, which was ostensibly set up       just $215.25 for the week, meaning they are
     to train foreign workers in technology occupa-       cheated of $442.19, or 67 percent of the wages
     tions, but in fact turned into a cover for human     legally due to them. In the course of a year, at
     trafficking and sweatshop abuse.                     this rate, each guest worker could be robbed
                                                          of nearly $30,000 in hard-earned wages due to
     Second and third year guest workers are cov-         them.
     ered by Japan’s labor laws, and as such should
     earn at least the legal minimum wage of 820
41
                                                             THE TOYOTA




It is not just the Vietnamese who are being        small apartment, they would be paying $1150
exploited. While we were in Japan in April, a      a month, or more than double the true cost of
guest worker from China—a woman who had            the apartment.
been working for three years at a subcontract
factory supplying Toyota—reported that she         Some subcontractors even extort money from
and her coworkers were working 16 hours a          vulnerable guest workers, hinting that they
day, from 8:00 a.m. to midnight, seven days        will be forcefully deported if they complain.
a week, while they were paid just 300 Yen an       In March 2008, Japan’s Justice Minister agreed
hour, or $2.87, which—again—is just about          to crack down on violations of guest worker
one third of the legal minimum wage due to         rights, but despite some recent improvements,
them, of $7.85. All overtime was mandatory,        many of these abuses continue.
and the legal overtime premium was not paid.
The workers received the same illegal $2.87
an hour wage no matter how many overtime
hours they worked.


The guest workers are in a trap and especially
terrified of having their names or even that of
their plant mentioned, fearing that any public
exposure could lead to their immediate firing
and deportation. There have also been allega-
tions of at least some sexual harassment of for-
eign guest workers.


Besides being robbed of their wages, factory
owners also cheat the workers in other ways.
As mentioned, guest workers are neither free
to relocate to better factories or change the
housing management assigns them. Typically,
three, four or even five workers are housed in
a small apartment, which would have a market
rent of no more than $500 a month. Instead,
factory management often charges each
worker up to $380 a month in rent, meaning
that even if just three guest workers shared the
                                                                                                    42
THE RACE TO THE BOTTOM




                                      SUBCONTRACT
                                          WORKERS
     To cut costs, auto parts plants all across Aichi   slightly more than 300 workers, 100, or one
     prefecture are turning to subcontract workers,     third, were hired as subcontract workers. The
     who often make up a third of the workforce         subcontract workers were not only paid less,
     and earn less than half of what full time work-    they were also assigned the most dangerous
     ers do.                                            jobs. One of the subcontract workers we spoke
                                                        with handled strong and potentially toxic ad-
     Employment agencies across Japan recruit sub-      hesives while making brake cables. He used a
     contract workers to relocate to Aichi Prefecture   glue – any contact with which would peel off
     to work in auto parts plants supplying Toyota      his skin – to secure the plastic top to the brake
     and other auto companies. One such agency,         cable.
     based in Okinowa, called K.K.K. Sanua Staff,
     told new recruits they would receive a sign-       The Subcontract workers were also cheated
     ing bonus of 300,000 Yen ($2,970), would work      and forced to pay exorbitant rents for com-
     from 8:30 a.m. to 5:00 p.m., and earn a base       pany housing. Management charged $400 to
     wage of $2,970 a month. It was all a lie. Once     $640 a month for a tiny apartment, which in
     they relocated to the parts factory in Aichi,      the market would cost much less.
     they were given less than 20 percent of the bo-
     nus guaranteed to them, and their wages were       Subcontract workers, like foreign guest work-
     one third lower than they agreed to; workers       ers and temps, have few rights. When several
     earned just $1,197 a month and not the $2,970      of the subcontract employees missed work to
     base wage they were supposed to make. Un-          take care of their sick children, management
     der these conditions, the subcontract workers      simply fired all the subcontract workers who
     would earn just $14,365 a year.                    had children.


     Eighty percent of the factories’ production        A subsequent local government investiga-
     went to Toyota, with the other 20 percent split    tion showed that the employment agencies
     between Nissan and Honda. Of the total of          had been deliberately misleading and cheat-
43
                                                     THE TOYOTA




ing subcontract workers for the last 10 years.
The owner of the K.K.K. Sanua Staff agency in
Okinowa admitted to the media that he rou-
tinely lied to the prospective hires explaining:
“If we can’t tell a good story we won’t be able to
recruit anyone. We need bait to catch workers…
and everyone is doing this.”


Again out of fear, this worker also asked that
we not mention his name or the name of the
subcontract plant, knowing that in retaliation,
Toyota would pull all its orders.


A subcontract worker from another factory
told us he often worked 12 hours a day, from
9:00 a.m. to 9:00 p.m., painting Toyota car bod-
ies. He was paid 1125 Yen an hours, or $10.77,
which is a little over half of the $20.49 an hour
full time Toyota workers earn.




                                                                  44
THE RACE TO THE BOTTOM




                                                      AT TOYOTA,


      “you sacrIfIce                                  At Toyota, his normal shift was nine hours, from
                                                      8:30 a.m. to 5:30 p.m., five days a week. In real-
        your lIfe to                                  ity, however, he never left before 10:30 p.m. or

            toyota,                                   12:30 a.m., meaning his actual shift was 14 to
                                                      16 hours a day. He was routinely at work 70 to
                                                      80 hours a week. With his commute, he did not
                                                      arrive home until 12:00 midnight or 2:00 a.m.


                                                      “Toyota is a good company,” he explained,
                                                      “with status and good wages, though it comes
                                                      with a price. Toyota expects sacrifice.”
                             - toyota
                            engIneer                  When Toyota announces the release date of
                                                      one of its new model cars, from that moment
     He left for work at 7:30 a.m. each morning and   on, the workers are held to absolute deadlines
     rarely returned home before midnight or 2:00     which they must meet. The pressure and stress
     a.m. He was averaging just four hours of sleep   are constant. So are the long hours and lack of
     a night, and his wife was increasingly worried   sleep. For months on end…“life disappears as
     that the constant pressure was destroying her    everything is centered on work.”
     husband’s health.
                                                      In the months leading up to a deadline, he was
     He loved his work as an engineer specializing    routinely working 80 to 120 hours of overtime
     in diesel engines. Officially he was employed    a month, including up to 10 hours of work
     by Denso, which is one of the Toyota Group of    he took home each weekend. Toyota consid-
     companies—but was also shifted to Toyota for     ers work taken home on weekends to be vol-
     long periods.                                    untary, off-the-clock activity which—as part
                                                      of the “sacrifice”—is unpaid. He spent most
45
                                                                  THE TOYOTA




of the weekend trying to sleep to recover his          pressions each year appears to be significantly
strength for the next week. He was growing             under-reported.
seriously depressed.
                                                       The engineer also confirmed that, similar to
“They never ordered you to stay at night,” he said     Toyota, the workers at Denso received no help
when we asked why he did not get up and go             from the company union.
home at 8:00 p.m., explaining to his superior
that he had to spend some time with his wife.
“Management never says you cannot go home,
rather, they would ask if you had finished all the
work you needed to in order to reach the dead-
line.” The pressure was constant to “do your
work better.” Everyone is pushing to excel, since
your pay and that of your immediate manager
is based upon positive evaluations.


There is really no escape. Not only did he love
his job working on diesel engines—and he was
good at it—but in Japan today, especially for
specialized occupations, it is very difficult to
quit and hope to find a similar full-time job. For
that reason, engineers at Toyota rarely change
jobs. Another factor was that when Japan’s real
estate bubble burst in the early 1990s, com-
panies like Toyota froze their technical staffs
while at the same time doubling and tripling
the work load each individual had to carry.


The engineer estimated that hundreds of
workers—upwards of even 300 people—in
each Toyota company eventually break each
year from the long hours and constant stress of
looming deadlines, eventually having to take
time off. The number of Toyota workers who
fall ill due to stress or sink into debilitating de-
                                                                                                         46
THE RACE TO THE BOTTOM




                                                                       TOYOTA
              BURMESE DICATORS
     •   Toyota Tsusho—part of the Toyota Group          •   Louise Arbour, the United Nations High
         of companies—is involved in a joint ven-            Commissioner for Human Rights said that,
         ture with the totalitarian Burmese military.        “The obstruction to the deployment of such
                                                             assistance illustrates the invidious effects of
     •   “Business people in Yangon say it is impos-         longstanding international tolerance for hu-
         sible to do business without connections to         man rights violations by the Burmese military
         generals or their children.” (New York Times,       regime. (New York Times, June 3, 2008)
         May 29, 2008)


     •   At least 135,000 people are dead or missing
         following the May 3 cyclone, with another
         1.4 million survivors homeless and in des-
         perate need of food, shelter, medical care
         and clean water.


     •   U.S. Defense Secretary Robert M. Gates ac-
         cuses Burmese dictators of “criminal ne-
         glect” for blocking large scale international
         aid to the cyclone victims. (New York Times,
         June 2, 2008)




47
                                                              THE TOYOTA




toyota’s                                          must ask why does Toyota insist on support-
                                                  ing the Burmese dictators?

dIctators                                         Toyota Motors’ link to Toyota Tsusho is clear.
                                                  Not only is Toyota Tsusho part of the Toyota
Toyota Tsusho, a large holding company which      Group, but Toyota Motors owns 21.57 percent
is part of the Toyota Group is involved in sev-   of Toyota Tsusho, while Toyota Industries owns
eral joint ventures with the Burmese military,    another 11.12 percent, bringing Toyota’s com-
including being a venture partner with the        bined ownership to one-third. There is also a
military and the Suzuki Motor Corporation in      revolving door policy, as Toyota Motors and
manufacturing and selling vehicles which may      Toyota Tsusho share high level management
be used to repress the Burmese people. Toyota     and Board members. Moreover, sales to the
Tsusho and Suzuki are working in partnership      Toyota Motor group accounted for over 16 per-
with the Myanmar Auto and Diesel Engine In-       cent of Toyota Tsusho’s total business in 2006.
dustries (MADI), which is a military-run enter-
prise. In addition, Myanmar Toyota Tsusho—a       •   Today, 50 million Burmese people are
subsidiary of Toyota Tsusho—operates a com-           stripped of their human rights and are the
modity, material and auto parts business in           target of extreme and cruel abuse by the
Burma, which is impossible to do without mili-        military dictators.
tary involvement. Nor, with 90 employees, is
Myanmar Toyota Tsusho an insignificant com-       •   In Burma, the highest paid private sector
pany. Another subsidiary of Toyota Tsusho,            factory workers earn just 11 to 12 cents an
the Tomen Company, also operates in Burma.            hour.
All of Toyota Tsusho’s ventures in Burma are
generating revenues for the military dicta-
tors, which are used to repress and torture             11 TO 12 CENTS AN HOUR
the Burmese people.


Especially now, with the military Junta pursu-
ing a ridiculous constitutional referendum cha-         $5.31 A WEEK
rade to cement its power—while an estimated
135,000 people are dead or missing following
the devastating May 3 cyclone, with another
1.4 million people homeless, without food and           $276 A YEAR
at risk of cholera, typhoid and dysentery—we
                                                                                                    4
THE RACE TO THE BOTTOM




     •   Outside the factory sector, urban workers                              toyota
         are earning five to nine cent-an-hour wages.
         Public school teachers are paid two cents an
         hour.                                                         Toyota Industries Corporation
                                                                              Aichi Steel Corporation
     •   The military government has declared the                                   Jtekt Corporation
         Federation of Trade Unions in Burma a "ter-                        Toyota Auto Body Co. Ltd.
         rorist group." Six activists attending a labor            ToYoTA TSUSHo CoRpoRATIoN
         rights workshop in Rangoon on May 1, 2007,                               Aishin Seiki Co. Ltd.
         have been sentenced to between 20 and 28                                 Denso Corporation
         years in prison.                                                Toyota Boshoku Corporation
                                                                             Towa Real Estate Co. Ltd.
     •   Forced labor, including the exploitation of      Toyota Central Research and Developments
         children, continues in Burma, as do extraju-                                Laboratories Inc.
         dicial killings, disappearances, rape and tor-                        Kanto Auto Works, Ltd.
         ture.                                                                  Toyoda Gosei Co. Ltd.
                                                                    ToYoTA MoToR CoRpoRATIoN
     •   More than 30 people were shot dead and
         3000-plus arrested during the September
         2007 pro-democracy protests.


     •   Nobel Peace Prize winner and National
         League for Democracy General Secretary
         Aung San Suu Kyi remains under house ar-
         rest.




49
                                                          THE TOYOTA




The extremely close relationship between Toyota and
Toyota Tsusho can be seen in the millions of dollars of
Toyota auto parts which are shipped from Japan to the
U.S. each month by the Toyota Tsusho Corporation.
Toyota Tsusho America receives the parts and pass-
es them on to Toyota’s U.S. plants such as the one in
Georgetown, Kentucky.




                                                                       50
THE RACE TO THE BOTTOM




     TOYOTA’S REPRESSION


                 attacks                                to collective bargaining in March 2000. When
                                                        management still refused to even meet, the
             legal unIon                                TMPCWA union organized a peaceful demon-
                                                        stration in front of the Philippines Department
                                                        of Labor and Employment to protest Toyota’s
                                                        illegal actions. The Labor Department again
                                                        ruled in favor of the TMPCWA union, which was
     The United Nations International labor or-         the second time it did so. Toyota’s manage-
     ganization (Ilo) points to Toyota’s illegal at-    ment ignored this second ruling and instead
     tacks against the lawful union at its plant in     fired 227 newly elected union officers and
     the Philippines as…“an illustration of how a       members, and suspended another 64 work-
     multinational company, apparently with lit-        ers who participated in the union demonstra-
     tle regard for corporate social responsibility,    tions.
     has done everything in its power to prevent
     recognition and certification of the Toyota        In September 2003, the Supreme Court in the
     Motor Corporation’s Workers Association.”          Philippines ordered the Toyota Company to
     (ILO Workers Group, December 2003)                 recognize the legal union and begin collec-
                                                        tive bargaining negotiations. Again, Toyota
     For years, the Toyota Corporation in the Philip-   refused.
     pines fought to undermine and block the right
     of its 1,200 employees to freedom of asso-         Just two months later, in November 2003, the
     ciation and to organize, which are among the       International Labor Organization also urged
     most fundamental of the ILO’s internationally      Toyota to reinstate the fired unionists and be-
     recognized worker rights standards. Despite        gin negotiating in good faith. The ILO recom-
     Toyota management’s attacks, the Toyota Mo-        mended that, “Since the TMPCWA has been
     tor Corporation’s Workers Association (TMP-        certified as the exclusive collective bargain-
     CWA) won its legal recognition and the right       ing agent that the government make every
51
                                                                   THE TOYOTA




effort to ensure that the TMPCWA and Toyota            Toyota headquarters in Japan claims that this
Motor Philippines Corporation negotiate in             is a “local” matter which must be dealt with on
good faith with a view to reaching a collec-           the ground in the Philippines and not some-
tive agreement…” Further, the ILO urged the            thing the Toyota Corporation can intervene
“reinstatement in their previous employment            in. This is disingenuous to the point of being
of the 227” fired union workers and leaders.           ridiculous. The president of Toyota’s factory
                                                       in the Philippines is, of course, from Toyota’s
The International Metal Workers Federation             headquarters in Japan, as are most of the other
(IMF) launched an international solidarity cam-        30 Japanese managers who run the factory. If
paign calling for the immediate reinstatement          Toyota headquarters had the will, they would
of the fired workers and that Toyota finally re-       resolve this crisis overnight.
spect the right of its workers to organize an in-
dependent union.                                       Meanwhile, the situation in the Philippines for
                                                       the independent Toyota unionists is becoming
Unfortunately, throughout this entire period,          increasingly dangerous as hundreds of labor
the company union at Toyota in Japan never             activists, outspoken clergy, land reform advo-
lifted a finger to provide solidarity to its sisters   cates, journalists and progressive political ac-
and brothers in the Philippines. The company           tivists have been killed or disappeared since
union would not dare oppose, or even criticize,        2006.
Toyota management.
                                                       “In recent years there has been an increase in the
While continuing to block the reinstatement of         number of killings of political and community ac-
the illegally fired unionists at its plant, Toyota     tivists in the Philippines… The killings are mostly
management worked diligently to help orga-             carried out by unidentified men often wearing
nize an alternative union which they could             face masks, who shoot the victims before escap-
better control. Toyota claimed that the election       ing on motorcycles… Amnesty International is
of the independent union in 2000 was invalid           gravely concerned that members of the security
as supervisory personnel were not allowed to           forces appear to have been complicit in or have
vote.                                                  acquiesced to many of these killings.”


All these years later, 136 of the illegally fired      - Amnesty International, November 28, 2007
workers are still struggling for their reinstate-
ment.



                                                                                                             52
THE RACE TO THE BOTTOM




                                                                NO RAISE

     “It [Toyota] looks good on the surface, but         are damaged in delivery, or if a box is even
     underneath it is pretty bad.”                       torn, the price of that part is deducted from his
                 -A domestic plant’s supply worker       salary.


     We met a driver employed at a domestic parts        “Things are getting worse” he told us, “and will
     supply company working under sub-contract           continue to do so. I can’t see any way out.” When
     for the toyota bushin kyahan company—a              we told the driver that Toyota had a very good
     major parts supplier which was originally           reputation in the U.S., he laughed: “It looks
     started by Toyota. He delivered auto parts,         good on the surface but underneath it is
     including batteries, mufflers, and bumpers          pretty bad.” He also told us that over the years
     to Toyota dealerships and repair shops. He          more of the Toyota parts they deliver are being
     worked from 8:00 a.m. to 5:30 p.m., a nine and      recalled. He knows this, as he is the one who
     a half hour shift, six days a week. He had no       has to pick up the recalls.
     breaks and was forced to grab a quick lunch
     whenever he had a spare moment. He had not          These workers were also in a trap, afraid to
     had a raise in ten years. He explained workers      report violations to the local labor bureau for
     cannot make such a request, and if they did,        fear that Toyota would in retaliation pull all
     management would fire them immediately.             the work from their subcontractors, meaning
     “Workers are fired if they even ask for a raise.”   everyone would lose their jobs. This was
     He earned $596.70 a week, including overtime        the same fear we heard over and over. If the
     and bonuses, which is $10.47 an hour and            workers asked for their rights or for a long
     $31,028 a year.                                     overdue wage increase, they would be fired.


     He receives just five paid holidays instead of
     the ten he is legally owed. If any of the parts



53
                                                               THE TOYOTA




JAPAN’S
UNDER ATTACK
Like in the U.S., the middle class in Japan is un-   temps, subcontract, or part time workers. Af-
der attack. A USA Today article in July 2006         ter Japan’s real estate bubble burst in 1991,
quotes Mr. Takuya Tasso, a Democratic Party          over the next decade a whole generation was
leader, saying: “I see a serious problem. Japa-      lost as factories and companies stopped hiring
nese society is dividing into winners and los-       people full time.
ers, rich and poor people. The middle class
is being destroyed.” The organization of Eco-        We were surprised again and again at the level
nomic Cooperation and Development (OECD)             of fear expressed by Toyota and other work-
notes that income inequality in Japan grew           ers. The workers know exactly what is going
twice as fast as in other rich countries between     on and are receiving no real support from the
the mid ‘80s and the year 2000.                      company union at Toyota. The workers know
                                                     they better keep their heads down and protect
In 1994, 19 percent of the work force was made       themselves.
up of part-time, temporary, and subcontract
workers. Today, about a third of Japanese
workers are in this condition.


In Japan, it was common that wages increased
with seniority, but since 1990 “an increasing
number of enterprises” have instead moved
to a merit-based pay system for determining
wages. (Statistic Handbook of Japan, Chapter
12, Ministry of Internal Affairs and Communi-
cation)


The workers see what is happening in Japan,
where one third of the work force is either
                                                                                                      54
THE RACE TO THE BOTTOM




               u.s. auto   •   Alan Mulally, CEO of Ford – $28,183,476
                               in total compensation in 2006.

            companIes      •   G. Richard Wagoner, CEO of GM
                    lose       – $10,181,153 in total compensation in
                               2006.
                tens of
            bIllIons of
                           •   Robert C. Nardelli, CEO of Chrysler – left
                               Home Depot in January 2007 with a

               dollars         golden parachute of $250 million in
                               severance pay.




55
THE RACE TO THE BOTTOM




                   COMPANY
           CONTROLLED UNION
     In Japan, unions are organized very differently   without pay—would never even think of using
     than in the United States and Canada. In Japan,   the meetings to raise grievances or complaints
     unions are enterprise-based, meaning there is     against management. Regarding workers
     a separate union to represent just Toyota work-   raising grievances, one senior worker told us:
     ers, whereas in North America unions are orga-    “No—never—they would not even think of it.
     nized on an industrial basis, covering multiple   It’s impossible!”
     companies.
                                                       Thirty-five years ago, Mr. Kamata Satoshi
     As startling as it may sound, the only serious    found the same fear and constraint when he
     research to date on labor practices at Toyota     worked at Toyota. “That just doesn’t happen
     in Japan was carried out more than 35 years       [i.e. to raise grievances]. Because it doesn’t do
     ago by a young freelance journalist, Mr. Ka-      any good to say it. I mean, even if they didn’t
     mata Satoshi, who spent six months working        like something, they wouldn’t go to the union
     at a Toyota auto plant. It was in 1972 that he    with their complaint. The reason is that union
     released his book, Factory of Despair: Diary of   officials go back to their original work after two
     a Seasonal Auto Worker. Today, one third of all   years. The union workers also have power de-
     Toyota assembly line workers in Japan are “sea-   pending on their position within the company, so
     sonal” or temporary workers, making less than     they defend the company.”
     sixty percent of what full time workers do, and
     even less when benefits are taken into account.   “The Quality Circle movement is to control with
     Thirty-five years ago there was a “company”       small groups…There are always personal rela-
     union at Toyota, and nothing has changed. If      tionships in labor-management relations and
     anything, conditions for Toyota workers have      workers are tied to these relations…in Japan
     gotten worse.                                     they control workers with that kind of human
                                                       relationship.” (Mr. Satoshi interviewed by Tim
     As mentioned earlier, Toyota workers partici-     Shorrock for “The Multinational Monitor,” Octo-
     pating in mandatory Quality Circle meetings—      ber 1983).
57
                                                                 THE TOYOTA




During our April 2008 visit to Japan, many            crease the workers would have to strike, which
senior Toyota workers told us that the official       they told us is impossible to imagine.
union sees its primary role as protecting Toyo-
ta’s productivity gains.                              Union consciousness is very low at Toyota. The
                                                      union has no popular education training for
Again, nothing has changed in the last 35             its workers in grievances, contracts, political
years.                                                or grassroots action. Some workers we spoke
                                                      with described the union as a “tool of manage-
“At the core of Japanese labor management rela-       ment.”
tions are the enterprise-based unions. The devel-
opment of the enterprise is of prime impor-           It was back in 1962 that the Toyota union
tance for the union….If ones company doesn’t          reached a master agreement with the com-
get ahead, ones livelihood will not improve, that’s   pany, (1) committing to collaborate with man-
the connection.                                       agement to continually improve productivity,
                                                      and (2) to improve working conditions. Point
“At the heart of Japanese labor-management re-        two certainly appears to have gotten the short
lations is the ancient concept of sacrificing one’s   end of the deal.
personal interests to the public good.
                                                      • It appears that the company union at Toy-
“…the union does not propose something                  ota did not oppose management’s hiring
unacceptable to management, but makes de-               10,000 non-union temporary and subcon-
mands in tune with the times. The union cadre           tract workers who now make up 33 percent
and management are always talking with                  of Toyota’s assembly line workers, and who
each other. Whatever they agree up is forced            earn less than 60 percent of what full time
upon the workers.” (Mr. Satoshi’s 1983 inter-           workers do.
view with the Multinational Monitor).
                                                      • The Toyota company union has been silent
Almost verbatim to descriptions of conditions           in the face of Toyota workers being “over-
35 years ago, senior Toyota workers told us             worked” to death, due to excessive overtime
that the company union will not even demand             demands, much of which is unpaid.
wage increases— despite Toyota’s soaring
profits—for fear that Toyota would lose out in
international competition, and everyone’s jobs
would be in jeopardy. To receive a wage in-

                                                                                                        5
THE RACE TO THE BOTTOM




     • The Toyota union has not challenged man-
       agement on its auto parts supply chain
       which is riddled with sweatshop abuse,
       including the human trafficking of guest
       workers from China and Vietnam, who are
       stripped of their passports, and forced to
       work grueling hours while being cheated of
       their wages.


     • The Toyota company union has stood by and
       done nothing as a real union at a Toyota plant
       in the Philippines was being destroyed.


     • Nor has the company union criticized Toy-
       ota’s ties to the vicious military dictators in
       Burma.


     • the passive role played by the company
       union in Japan has opened the door to
       toyota’s push to slash wages and benefits
       in the u.s. auto industry.




59
                        THE TOYOTA




   despIte   “Toyota trade union’s cooperation with
             management to decide the wages illustrates

  soarIng    its nature. In March 2002, when Toyota
             recorded the unprecedented pre-tax profit
   profIts   of a trillion Yen, management responded to
             the union’s demand for a unified pay increase
   toyota    with zero raise. This answer was due to one

  “unIon”
             word from okuda Hiroshi, the president of the
             Japan Federation of Employers’ Associations

foregoes     (Nikkeiren) and the Board Chairman of
             Toyota. okuda ordered the zero raise so as

     wage    to suppress across-the-board pay raises in
             all Japanese enterprises. No wage increase
Increases    against the backdrop of the company’s record
             performance was incredible. But the union
             accepted this with almost no resistance. As
             a result, other enterprises with less profit all-
             around also awarded zero raises this year….”

             Labour for globalizing Asian Corporations:
             A Portrait of Struggle
             Asia Monitor Resource Center, 2006, page 200




                                                                 60
THE RACE TO THE BOTTOM




                                                                            JAPAN

     • There are 127.4 million people in Japan.         • Average household income in Japan is
                                                          $4,432.20 a month and $53,186.44 a year.
     • 63.82 million people are employed. Exclud-         The average household is 3.44 people, with
       ing management, there are 50.88 million            1.65 people working.
       workers, of which 16.77 million, or 33 per-
       cent, are temporary (fixed contract), subcon-    • Average household living expenses are
       tract or part time workers.                        $3,945.60 a month and $47,347.25 a year.


     • There are 11,610,000 manufacturing jobs          • The official unemployment rate in Japan is
       in Japan, which comprise 18 percent of the         4.1 percent.
       workforce. Japan’s manufacturing wages are
       the third highest in the world after the E.U.    • Sixteen percent, or 7.9 million private sector
       and U.S.                                           workers, belong to unions.


     • The Japanese work the longest hours in the       • The U.S. is Japan’s largest export market. Ja-
       world, followed by workers in the U.S. and         pan enjoys an overall worldwide trade bal-
       U.K. In Japan, workers toil an average of 19.5     ance surplus of $105 billion. According to the
       days a month, working 150.9 hours (includ-         Economist Intelligence Unit “Country Profile
       ing 10.7 overtime hours), and 1811 hours a         2007”: “Japan exhibits little openness to for-
       year.                                              eign trade. As a proportion of current GDP, the
                                                          value of two-way foreign trade in 2005 stood
     • Average earnings in Japan are $18.71 an            at around 20 percent compared with around
       hour, $651.58 a week, $2,823.53 a month and        65 percent for Germany.”
       $33,882.35 a year. (Based on 2006 data and
       150.9 hours of work per month.)



61
                                                               THE TOYOTA




• Japan is the world’s largest creditor nation
  with $1.6 trillion in net overseas assets. The
  U.S. is the world’s largest debtor nation.


• In 2007, the current account balance in Ja-
  pan was $170.6 billion while the U.S. had a
  negative balance of $-853.3 billion.


• In Japan, 1.6 percent of the population is for-
  eign born in comparison to 12 percent in the
  U.S.


• Japan’s GDP is about one third the size of the
  U.S., $4.3646 trillion as compared to $13.2539
  trillion in the U.S. Per capita GDP is $34,242
  in Japan and $44,268 in the U.S.
                                                                       $254 bIllIon
• Japan and China are by far the largest holders
  of U.S. Treasury securities with Japan hold-
  ing $586.6 billion and China with holdings
                                                                         wItH Japan
  of $486.9 billion. Together, Japan and China                                      -in last three years-
  hold $1.1 trillion of U.S. Treasury Securities.
                                                    U.S. Trade Deficit with Japan
[Sources:

The Economist Intelligence Unit/ Monthly
Report April 2008                                             : $82,798,670,000
The Economist Intelligence Unit/ Country
Profile 2007
                                                              : $88,441,970,000
Statistical Handbook of Japan/Chapter 12
                                                              : $82,681,590,000
Labor-Ministry of International Affairs and
Communications

Ministry of Internal Affairs and
Communications/Basic Survey on Labor
Unions, 2006

Annual Report on Family Income and Expenditures
Survey (2005) ]
                                                                                                       62
  THE RACE TO THE BOTTOM




                                            SOME OF THE REAL
                                                                            IN JAPAN
all toyota union (atu)                                 Japanese ships to the Philippines where
Chiryu, Aichi, Japan                                   they were dismantled under extremely
                                                       dangerous conditions, which were also
       Email:         atunion@mail.goo.ne.jp           harmful to the environment. Currently
                                                       the union is involved in a campaign
       Website        www.katch.ne.jp/                 to ban asbestos and seek justice for its
                      atunion (Japanese)               victims.
       Contact:       Mr. Yasuhiko Chikamori,
                      Executive Committee        aIroren (aichi prefectural federation of
                                                 trade unions)
       The independent and progressive           Nagoya City, Japan
       All Toyota Union is extremely small,
       but its leaders are smart, genuine              Email:         kurematsu@airoren.gr.jp
       and committed, and it represents a              Website:       www.airoren.gr.jp
       very important step in organizing an            Contact:       Saichi Kurematsu,
       independent union at Toyota. The                               General Secretary
       company union at Toyota is already
       attacking the ATU. The ATU has been             The Aichi Prefectural Federation of
       denied leafleting and posting rights in         Trade Unions is another independent
       the factory.                                    and very effective union. They have
                                                       widespread and solid contacts with
all Japan ship-building & engineering                  subcontract and foreign guest workers
union-kanto regional council                           employed in Aichi’s auto industry. Much
Yokohama City, Japan                                   of the beginning of progress toward
                                                       ending the trafficking and exploitation
       Fax:           (81) 45-441-0747                 of foreign guest workers is due to their
       Contact:       Hiroshi Hayakawa                 work.

       The All Japan Ship-building and
       Engineering Union is independent,
       progressive and effective. In 1998,
       the union won a campaign to end the
       practice of sending decommissioned
  63
                                                               THE TOYOTA




gu (general union)                                  JmIu
Nagoya City, Japan                                  Nagoya City

      Email:         endo@generalunion.org                 Email:         jmiu_aichi@roren.net
      Website:       www.generalunion.org                  Contact:       Ohta Hiruki
      Contact:       Endo Reiko, Vice Chair
                                                           JMIU is an independent grass-roots
      The General Union, which has been                    union, like the NFU.
      around for a long time, is a independent
      and progressive union open to all             dr. fumio kaneku
      workers. It has tens of thousands of          Professor, Yokohama City University
      members spread across many industries.
                                                           Email:         kaneko@yokohama-
support group for tmpcwa (toyota                                          cu.ac.jp
motors philippines corp workers
association)                                               An economist who has lectured in the
Yokohama City, Japan                                       U.S. and is an expert on the ongoing
                                                           destruction of the middle class in Japan.
      Email:         monika@jca.apc.org
      Contact:       Rie Monika Ikeda               labornet Japan

      The Support Group for TMPCWA has                     Email:         takaheim@jca.apc.org
      done amazing cross-border work to                    Website:       www.labornetjp.org
      support the unionists fired for daring to                           (Japanese)
      exercise their legal right to organize a
      union at Toyota’s plant in the Philippines.          A good source of progressive labor
      Almost single handedly, the Support                  reporting in Japan.
      Group has kept a campaign going for
      the last eight years to support the Toyota
      Philippines workers.

nfu
Nagoya City, Japan

      Website:       http//homepage3.nifty.
                     com/fureai-union/
      Contact:       Sakai Toru, Chairman

      NFU is an independent grass-roots union
      open to all workers, including part-time,
      subcontract and foreign guest workers.
      Like JMIU, NFU offers support to non-
      union workers.

                                                                                                       64
THE RACE TO THE BOTTOM




                           TOYOTA

                         Corporate Headquarters in Japan:

                                 Katsuaki Watanabe, CEO
                               Toyota Motor Corporation
                                             1, Toyota-cho
                            Toyota, Aichi 471-571, Japan
                                Phone: +1-565-2-2121
                                    Fax: +1-565-23-500


                           North American Headquarters:

                                      Shigeru Hayakawa
                                      Chairman and CEO
                         Toyota Motor North America, Inc.
                                           9 West 57th St
                                              Suite 4900
                                New York, NY 10019-2701

                                           212-223-0303
                                        212-759-7670 fax




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