Large corporations make huge profits abroad and fail to fulfill their domestic responsibilities -- Akahata 'Current' column, July 2

Major corporations are making amazing amounts of profits. A Bank of Japan quarterly survey shows that their net profit in fiscal year 2003 (April 2003 - March 2004) was 2.3 times larger than the previous year. It is expected that their profit for the current fiscal year will increase by 50 percent.

In FY 2003, leading profit maker Toyota Motor had 1.16 trillion yen in profit, which accounts for nearly 30 percent of Vietnam's GDP. At Toyota, a major operation is underway to reduce costs by half in 5-6 years from 2000.

There are interesting figures in large corporations' earnings reports for FY 2002. The figures are about operating profits big companies made from the sales of products manufactured in foreign countries. Toyota made 25 percent of their total operating profits abroad, Honda 70 percent, and Nissan 47 percent. The same tendency also applies to major electronics manufacturers.

In the discussion on pension reform, some political parties are criticizing the Japanese Communist Party for demanding that large corporations increase their share of the burden for maintaining the pension funds. They insist that large corporations will leave for foreign countries if heavier tax burdens are imposed on them. This argument does not make sense. Major corporations are going abroad in order to seek cheap labor costs and new markets, not for the purpose of evading taxes.

Based on record profits they make abroad, large corporations have the ability to fulfill their domestic social responsibilities. By moving their production bases out of the country, major corporations are decreasing domestic job opportunities as well as contributions to pension funds. (end)