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HOME  > Past issues  > 2008 February 20 - 26  > Toyota workers demand fair share of its huge profit
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2008 February 20 - 26 [LABOR]

Toyota workers demand fair share of its huge profit

February 26, 2008
Toyota workers are demanding that part of the huge profit the world’s top automaker is making be returned to workers and suppliers.

Toyota reported an operating profit of 2.2 trillion yen for 2006 while holding workers’ wages as low as possible.

Toyota has adopted the performance-based wage system. Workers get only a minimal regular pay raise. Workers will not get any pay raise after the age of 48. Their pay slips show that overtime pay accounts for 30 to 40 percent of what they receive each month for their extra hours or late-night shifts. Some work more than 40 hours of overtime each month. This is how Toyota workers are forced to work extraordinarily long hours.

Ishida Kuniyoshi has been working at the Takaoka factory in Toyota City for 40 years. He said, “Even if workers are ill, they keep on working by taking medicine. When it comes to health checkups, workers do not feel happy about an early detection of diseases because they are afraid that they won’t be able to participate in shift duty, affecting their plans for life.”

Toyota is hiring more and more fixed-term employee who work for up to 35 months. There are more than 11 thousand fixed-term workers, accounting for one-seventh of all Toyota employees. They perform the same duties as full-time workers but are paid 10,000 yen a day, one-half or one-third of what full-time employees receive.

Their wages are so low that they can’t make ends meet or send money to their families. Some fixed-term workers work another job to earn a living.

About 900 fixed-term employees, or less than 10 percent of all workers, are promoted to full-time positions each year.

In 2004, the company introduced a pay system linked to the number of years of service instead of using an age-linked pay scale. Under this system, if a fixed term worker has been promoted to a full-time position, he will be regarded as a new employee and his time as a fixed-term employee will not be counted. His wages will be lower than those he used to receive as a fixed-term worker.

For example, if a 30-year-old fixed-term employee has been promoted to a full-time position, his skill allowance will be 27,000 yen, the same as that attached to the starting pay for a high school graduate. If he had started his full-time career at 18, his skill allowance would be 59,400 yen.

“This wage system will enable Toyota to promote a large number of fixed term workers to full-time positions while at the same time holding the labor cost as low as possible.” Ishida said.

Toyota’s policy has been one of restraining wages as much as possible and replacing as many full-time employees as possible with low-paid contingent workers. As a result, in 5 years since 2001, Toyota’s corporate profit increased by 80 percent. Its board members’ pay increased 2.7 fold and shareholders’ dividends 2.8 fold. In contrast, workers’ wages decreased by 3.8 percent.

Ishida said, “Toyota has restrained workers wages under the pretext of the need to increase the company’s international competitiveness. However, now that the company is the world’s number one automaker, it must fulfill its corporate social responsibility through providing a fair share of its profit to workers and to small- and medium-sized suppliers.”

The Japanese Communist Party Toyota Committee has emphasizes in its bulletin that in order to eradicate poverty and disparities and to rebuild the Japanese economy by enabling people to spend money, large corporations like Toyota should return part of their huge profits to workers and small- and medium-sized businesses.
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