70 percent of Toyota subcontractors reported losses

Toyota Motor Corporation in March posted a record profit of 1 trillion yen. The largest Japanese carmaker is headquartered in Toyota City in Aichi Prefecture, and its chairman Okuda Hiroshi is president of the Japan Business Federation (JBF or Nippon Keidanren).

In contrast, small- and medium-sized businesses and workers in the Toyota-dominated district are complaining that they don't have the feeling that Toyota has made a record profit. Akahata on July 9 carried a report on how smaller businesses are struggling in the city where Toyota Motor Corp. is headquartered.

"Sales are increasing, but without a corresponding profit. Suppliers are forced by Toyota Motors to cut unit prices. This is why profit margins are very narrow." A board member of the Toyota Chamber of Commerce and Industry (CCI) made this comment at a meeting on July 5 with Toyota City Assembly's special committee on promotion of support for industries. The CCI has a membership of 1,400 small- and medium-sized businesses in the city, mostly Toyota-related.

The CCI board member went on to say, "It is hard to foresee five or ten years ahead. Toyota affiliates without doubt will continue to increase their overseas production facilities to supply cheaper parts from around the world. We have to be prepared for strong competition."

Pressure to cut unit prices

Subcontractors affiliated with Toyota are facing extraordinary pressure from Toyota to drastically cut unit prices. This is the source of Toyota's one trillion yen in net profits.

An electrician contracted to a Toyota-related plant for engineering work said, "Unit price cuts once reduced the sales to one-third of the peak. I was forced to cancel my life and fire insurance policies just to survive." He said that his business has somewhat recovered but is short of making profits. He complains that the prime contractor orders to do a job that takes five days only pay for three days.

"Recently two persons in the same line of business as mine went out of business. Meanwhile, Mr. Okuda (Toyota Motors President) said, 'If your income doesn't increase, why don't you cut unnecessary living expenses?' How insensitive he is! Although my son is working with me, I won't be able to pass the business on to him."

According to Toyota City, only 30 percent of about 4,600 local companies capitalized at less than 10 million yen paid city corporate taxes in fiscal year 2003. This means that the remaining 70 percent reported losses.

On the other hand, city corporate taxes paid by major corporations capitalized at more than 5 billion yen, including Toyota Motors and other companies of the Toyota group, decreased from 33.4 billion yen in FY 1990 to 27.9 billion yen in FY 2003. Japanese Communist Party City Assembly member Omura Yoshinori said, "As a result of cooperate tax cuts, Toyota's increased profit is not returned to the city."

The "Toyota way" of exploitation is often described as "wringing a dry towel" method. It also applies to the workplace. The number of fixed-term workers and temporary workers are increasing as are the hours of work.

"With increases and decreases in production, the company puts about 3,000 workers into the workplaces and soon takes them out. They are an adjustable labor force," said a man who retired from Toyota Auto Body at the age of 55.

Due to long working hours and the adoption of the discretionary work schedule system, workers feel fatigued and increasing number of workers are suffering from mental illness and dying from overwork.

An employee at a Toyota group's core company said, "It is well known among workers that the company was compelled to regulate its employees' unpaid overtime work. The achievement was made by efforts of JCP members in the Diet. However, workers are too tired to pay attention to politics. The labor union is forcing us to support the Democratic Party candidates in the Upper House election, but it never gives us information disadvantageous to Toyota. If more workers realize what the JCP is doing in the interest of workers, a change may occur."

A JCP supporting group of workers on the morning of July 8, 3 days before the Upper House election, distributed JCP flyers in front of the head office of Denso, a Toyota affiliate. Unexpectedly, many young women workers accepted the flyers. (end)