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HOME  > Past issues  > 2014 June 25 - July 1  > Payroll cuts put Japan’s steel industry in danger
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2014 June 25 - July 1 TOP3 [LABOR]

Payroll cuts put Japan’s steel industry in danger

June 27, 2014
Serious accidents have frequently occurred at iron and steel factories in Japan. This is the result of Japan’s leading steelmakers’ management style which cuts labor costs to increase profits.

At 5:20 a.m. on May 7, a 21-year-old worker at Kobe Steel Co., who was on night duty, got caught in a machine at an iron mill in Kobe City. About two weeks later, he died. Prior to that, on April 26, a 61-year-old employee was also caught in a machine and broke his ribs.

Over just three weeks from April to May, five serious accidents occurred at factories of Kobe Steel. The company issued on May 8 a declaration of “safety emergency”. On May 21, Kobe Steel President Kawasaki Hiroya called for all employees to increase activities to prevent on-the-job accidents.

One of the causes of the string of labor disasters is the lack of adequate safety measures.

Normally, production sites have some safety devices to automatically stop machines in case a worker enters a danger zone. Even after these major accidents, the steel company has failed to equip its factories with such devices because of their “high costs”.

A long-serving worker said, “Each time mishaps occur, the management calls on us to be more careful. However, even with the greatest care, a man cannot avoid making mistakes. To prevent work-related accidents, it’s essential to install safety systems.”

The fact that the maker has placed top priority on increasing productivity and forced employees to work under harsh working conditions also resulted in industrial accidents.

In a steelwork site, several teams of workers jointly work on a manufacturing line. If a problem arises on the line, they will stop the whole line.

At the Kobe Steel’s ironwork in Kobe City, the downtime of its production lines due to troubles reached 191 hours in the first half of fiscal 2013. This figure is 2.5 times higher than the 76 hours in the same period a year earlier. In order to improve efficiency, the manufacturer has been putting pressure on workers to keep running the lines regardless of malfunctions.

The steelmaker has limited new hiring and steadily reduced its workforce since the 1980s.

The age structure of workers at Kobe Steel is M-shape. While young workers serving for less than a decade and experienced employees with over 35-year careers make up a majority of the staff, middle-aged employees form only a small part.

A skilled worker said, “It takes at least 15 years for a new employee to become a full-fledged worker at the factory. Owing to the shortage of mid-level employees, young workers are put in charge at the site. When some troubles come, they can hardly deal with them. Veteran workers, also pressed with work every day, retire before passing down manufacturing skills and precaution measures to youngsters.”

What is worse is that the steel producer outsourced its equipment maintenance.

The outsourcing made it impossible for workers to share knowledge about mechanical equipment within the company. Therefore, it often takes a considerably long period of time to set a damaged machine in motion again.

At the same time, if workers operate machines without adequately knowing about them, it will expose those workers to danger.

These problems are not just at Kobe Steel. At a lecture meeting in March held by the Iron and Steel Institute of Japan, JFE Steel Corporation President Hayashida Eiji noted, “I think the management approach only seeking economic efficiency has come to a turning point. It’s needed for corporate managers to put more emphasis on developing human resources and boosting skills, even at the cost of some efficiency.”

It is thanks to hard workers that Japan’s steel products have maintained their export competitiveness after the Second World War ended. Treating working people with consideration will pave the way for economic growth and the development of industry.

Workers at Kobe Steel recently formed a group and launched a campaign to enhance safety at work.
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