The Toyota You Don't Know by Institute for Global Labour and Human Rights

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 CARE ABOUTWORKERS RIGHTS

EXECUTIVE SUMMARY

OVERWORKED TO DEATH AT THE PRIUS PLANT

KAROSHI

ALL ROADS LEAD TO TOYOTA TOURING A TOYOTA PLANT

HOURS

WAGES AT THE TOYOTA PLANT

LOWERING WAGE AND BENEFITS IN THE U.S.

TOYOTA’S SUPPLY CHAIN RIDDLED WITH SWEATSHOP ABUSE

LINKED TO HUMAN TRAFFICKING

SUBCONTRACT WORKERS ALSO CHEATED

WHITE COLLAR WORKERS EXPLOITED

LINKED TO BURMESE DICTATORS

REPRESSION OF LABOR RIGHTS IN PHILLIPPINES

NO RAISE IN 10 YEARS

JAPAN’S MIDDLE CLASS UNDER ATTACK

COMPANY CONTROLLED UNION

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 parttime 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 Accuses,” by Martin Fackler)

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PREFACE

BY CHARLES KERNAGHAN

The American and Japanese people have a lot in common. In both countries, excessive corporate power and greed are destroying the middle class as income disparity soars, enriching the few while the vast majority of us are left behind. As the two largest economies in the world, the people of the U.S. and Japan should, and could, have a very powerful voice in helping to shape a global economy that fosters respect for human and worker rights, protects our environment and promotes social and economic equality. There needs to be more dialogue among labor, environmental, human and womenâ&#x20AC;&#x2122;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 Toyota make some of the best hybrids. But their unions are weak and lack independenceâ&#x20AC;&#x201D;allowing the widespread exploitation of cheap temporary workers in their plants, along with a parts supply chain that is riddled with sweat-

shop abuses, including human trafficking. We have a lot to learn from each other. Right now, Toyota and the U.S. auto companies are locked in a race to the bottom, which will inevitably lead them to adopt each others worst practices. If the middle class is going to survive, it is time for working people in the U.S. and Japan to begin speaking to one another.

“THE TOYOTA WAY”

E AUTO

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WILL CELEBRITIES ALSO CARE What do Julia Roberts, Jennifer Lopez, Brad Pitt, Leonardo DiCaprio, Billy Joel, Bill Maher, Cameron Diaz, Jackson Browne, Arianna Huffington and Jessica Alba all have in common? They all drive a Toyota Prius. These famous celebrities—and others—drive a Prius because they are concerned and have made a commitment to help protect our environment. With celebrities leading the way, New York Times correspondent Micheline Maynard wrote: “The Prius has become, in a sense, the four-wheel equivalent of those popular rubber issue bracelets in yellow and other colors—it shows the world that its owner cares.” (New York Times, July 4, 2007). In fact, more American people—57 percent—say they purchased 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.)

Toyota’s Prius is now the fastest selling hybrid in the U.S. and in the world, for good reason, as it gets 48 miles to the gallon even in city driving. (To date, one million Priuses have been sold worldwide.) But what do these celebrities know about Toyota’s labor practices and the conditions under which the Prius and other Toyota vehicles are made in Japan? Like the rest of us, when it comes to the human and labor rights of Toyota workers, the celebrities know very little or really, next to nothing.

Why is a commitment and passion to protect our environment so often divorced

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How would these celebrities—and the many Prius devotees across America—respond if they knew that a full one-third of Prius assembly line workers in Japan are hired as “temps,” with few rights, earning just 60 percent of what full time workers do, and even less when benefits are taken into account? Most Americans have never heard of Kenichi Uchino, who at 30 years of age died of overwork at the Prius plant, routinely working 14-hour shifts and putting in anywhere between 107 and 155 hours of overtime a month—at least 61 1/2 hours of which was unpaid. The Toyota Company said the 61 ½ hours were “voluntary” and therefore unpaid. Mr. Uchino left behind a young wife and two children—a one-year-old son and a three-year-old daughter. Neither Toyota management nor the “company” union at Toyota lifted a finger to help his family survive. The Japanese people even have a word for being overworked to death—“Karoshi.” Toyota’s parts supply chain is also riddled with sweatshop abuse, including the human trafficking of tens of thousands of foreign guest workers—mostly from China and Vietnam—to Japan, where they are stripped of their passports and forced to work grueling hours seven days a week, often earning less than half of the legal minimum wage. Sixteen-hour shifts, from 8:00 a.m. to midnight, would not be uncommon. Most people have no idea that Toyota— through the Toyota Tsusho Corporation which is a part of the Toyota Group—is involved in a joint venture with the ruthless military dictators in Burma, where nearly 50 million people live in fear and want. The United Nations/ In-

ternational Labor Organization points to Toyota’s repression of freedom of association at its plant in the Philippines as “an illustration of how a multinational company, apparently with little regard for corporate responsibility, has done everything in its power to prevent recognition and certification of the Toyota Motor Company Workers Association” (ILO Workers Group, December 2003). Once again, the “company” union at Toyota has refused to challenge Toyota management for its ties with the Burmese dictators or its repression of freedom of association with respect for worker rights in the Philippines. This is not to say that Toyota is another WalMart. If Toyota were not in many ways a decent and very effectively run company, it would not be the largest auto company in the world. A full-time assembly line worker at Toyota has a good paying middle class job, allowing them to raise their families in decency. (Still, Toyota wages in Japan are only about 50 percent of union wages and benefits in the U.S.) And if a full time worker stays “clean,” and does not get injured on the job or fall ill, they will have a job for life at Toyota. By “clean” the workers mean not doing anything to oppose Toyota management or the company union. As we have seen, however, like other corporations, Toyota is far from being perfect. It is really astonishing—given that Toyota is the largest auto company in the world, and with North America accounting for 44 percent of all its worldwide sales—how little we know about

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Toyota’s labor practices in Japan and in the developing 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

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THE TOYOTA EXECUTIVE SUMMARY Celebrities like Brad Pitt, Julia Roberts, Leonardo DiCaprio and others have helped turn Toyota’s Prius into the environmental “equivalent of those popular rubber issue bracelets in yellow and other colors—it shows the world its owners care.” In fact, 57 percent of Americans who purchased a Prius said they did so because “it makes a statement about me.” Toyota’s Prius, the best-selling hybrid in the world does get 48 miles to the gallon. (New York Times, July 4, 2007) But what do these celebrities and the rest of us know about the labor practices and working conditions under which the Prius and other Toyota cars are made in Japan? Really nothing. Why is the commitment to protect our environment so often divorced from a similar concern to protect human and worker rights?

low wage A full one-third, or 10,000 Toyota assembly line workers, are low wage temp and subcontract workers who earn less than 60 percent of what full time workers do. Temps have few rights and are hired under contracts as short as four months.

OVERWORKED Mr Kenichi Uchino died of overwork at Toyota’s Prius plant when he was just 30. He was routinely working 14-hour shifts and putting in anywhere from 107 to 155 hours of overtime a month—at least 61 ½ hours of which were unpaid. Toyota said the 61 ½ hours were “voluntary” and therefore not paid. Mr. Uchino left behind his young wife, a one-year-old son and a three-year-old daughter. The Japanese people even have a word for being overworked to death: “karoshi.” An estimated 200 to 300 workers a year suffer serious illness, depression and death due to overwork.

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Sweatshops and

Toyota by the

Toyota’s parts supply chain is riddled with sweatshop abuse, including the human trafficking of tens of thousands of foreign guest workers—mostly from China and Vietnam—to Japan, where they are stripped of their passports and forced to work grueling hours seven days a week, often earning less than half the legal minimum wage. Sixteen-hour shifts, from 8:00 a.m. to 12:00 midnight are common.

The UN/International Labor Organization points to Toyota’s suppression of freedom of association at its plant in the Philippines as “an illustration of how a multinational company, apparently with little regard for corporate responsibility, has done everything in its power to prevent recognition and certification of the Toyota Motor Company Workers Association.” (ILO Working Group, December 2003.)

Linked to

Toyota leads

Toyota—through the Toyota Tsusho Corporation which is part of the Toyota Group—is involved in several joint business ventures with the ruthless military dictators of Burma, which put revenues into the pockets of the dictators who use it to repress Burma’s 50 million people.

Toyota, now the largest auto company in the world, is using its size and success to impose its two-tier, low-wage model at its non-union plants across America, which will result in a race to the bottom with wages and benefits being slashed throughout the entire auto industry.

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Toyota’s Profit Reaches $16.7 Billion Purchase Toyota Vehicles Each Week

Toyota reached record profits of $16.7 billion in its fiscal year ending March 31, 2008. Toyota is earning $45.8 million a day, every day of the year. Toyota sells more vehicles in the U.S. (2.92 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 56,923 Toyota vehicles each week.

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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, Japan 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 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-

KENICHI UCHINO AND FAMILY

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tary quality control activities,”—quoting from a Nagoya newspaper article published December 1, 2007—“which Toyota argued were performed off the clock. But Judge Tamiya accepted the wife’s argument that those activities were effectively within the scope of Uchino’s work at Toyota.” Even leaving aside the home work and offsite meetings, the court ruled that Mr. Uchino had worked 61 ½ hours of unpaid overtime in the 30 days leading up to his sudden collapse and death at the Tsutsumi plant where the Prius is produced. His soft-spoken and still beautiful wife, Mrs. Hiroko Uchino, told us that Kenichi was a “kind and good father.”

MRS.UCHINO, BARBARA BRIGGS, CHARLES KERNAGAHN

Kenichi Uchino was a good worker. But as Toyota management added more and more responsibilities to his work load, he began to feel the strain of the enormous overtime—most of it unpaid—that was required of him. Kenichi worked as a quality control inspector in the Tsutsumi plant in Toyota City where they make the Prius. His main job was to check car bodies for any defects. If defects were found, the car had to be removed from the assembly line, repaired and only then could go back onto the line. He had to keep track of all the car numbers in the line. His wife said his work was “very stressful,” since he was often called 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 inside 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 remote 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 several times a month and prepare reports suggesting at least two ideas each month to increase productivity and lower costs. These mandato-

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ry Quality Circle meetings were always off the clock and unpaid. As a Toyota employee with “expert” status, he also had to assemble documents and prepare reports for many different kinds of meetings. He had administrative responsibilities 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 Toyota 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 alternate 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, putting 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 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

KENICHI UCHINO AND FAMILY

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On the weekends, when he was not catching up on his sleep, taking work home or participating in “voluntary” offsite meetings, Mr. Uchino loved taking his family on outings driving in their Toyota. Mrs. Uchino said her husband did complain about the grueling hours and constant stress, but not too much, as he always said to her it was “hard, but it can’t be helped….Somebody had to do it.” For the sake of his family he had to “maintain a good attitude.” Mrs. Uchino told us, “He kept saying and hoping things would get better, but they didn’t and he died.” Mrs. Uchino twice approached the Labor Standards Inspection Office of the Ministry of Health, Labor and Welfare to seek compensation and a pension, so she could raise her children. Twice she was turned down. It was not until Mrs. Uchino sought a lawyer’s help that—six years after her husband’s death—the Nagoya District Court ruled that there was a causal relationship between Mr. Uchino’s long working hours at Toyota and his death. Presiding Judge Toshiro Tamiya declared that “Mr. Kenichi Uchino died from overwork.” Judge Tamiya noted that Mr. Uchino “was so tired that he could not play with his children.” In court, the Toyota company argued that Mr. Uchino had worked only 45 hours of overtime in the month leading up to his death and that the other 61 ½ hours were “voluntary” in nature and “performed off the clock.” The court reject-

ed Toyota’s argument and ruled that the number of overtime hours actually worked by Mr. Uchino was 106 ½. Even this was a very conservative estimate, as it did not include work taken home on the weekends or the informal work-related meetings with colleagues away from the plant that management encouraged. The court ruled that Mr. Uchino had worked 61 ½ hours of unpaid overtime in the 30-day period before he collapsed and died. Mrs. Uchino put her husband’s true overtime hours at 155, of which an astounding 110 hours were unpaid. Mrs. Uchino points out that her husband often worked three or four hours on his days off—as he did on the Saturday before he died, January 26, preparing reports due the following week. There were also frequent meetings with colleagues outside the factory, often over food and drink. Toyota claims that such meetings—where work is discussed—are freely participated in by the workers, none of whom are under any compulsion. But in reality, young workers hoping to advance through promotions feel they are under pressure and are expected to attend such informal work meetings. Throughout the long six years Mrs. Uchino struggled to win a pension for her husband’s death so she could raise her young children, the union at Toyota—to which Mr. Uchino had belonged—did nothing, not even lifting a finger to help her and her children. The Toyota union never argued on their behalf for com-

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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 children in decency, which is the least Toyota owed them. Mr. Uchino was just 30 years old when he died from overwork. He had no illnesses and he did not drink or gamble. Today his children are seven and nine years old.

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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.

THE TOYOTA

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

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KAROSHI

The Japanese workers even have a name for it—“Karoshi,” meaning overworked to death.

work, and his family was due compensation and a pension.

The same year Kenichi Uchino died from overwork, so did another Toyota employee, this time a white collar technician. Management had put him in charge of designing an assembly line to mass produce a new model Toyota car. It was an enormous responsibility, and he was under constant pressure from his immediate superior to meet the production deadline so that his boss could get a promotion. He was leaving home each day at 7:30 or 8:00 a.m. and not returning until 11:00 p.m., 12-midnight, or 1:00 a.m. Including his commute, he was working 15 to 17 ½ hours a day. The workload and pressure was too much, and in November 2006, the 46-year-old man died of a hemorrhage.

Another Toyota employee—just 32 years of age—committed suicide on January 17, 2005. He had been put in charge of setting up and unifying a new computer security system for Toyota, both in Japan and internationally. Along with his own workload, he was responsible to also oversee numerous computer security subcontractors around the world who were hired to work on this massive project. The work load was not only enormous, but setting hard and fast deadlines was central to “The Toyota Way,” which added even more pressure to finish on time. The first deadline was a January 15 meeting with high-level Toyota management to review the status of the new computer security system. A second meeting was to follow on January 17, 2005, which was the day the young man committed suicide.

Toyota management may very well have gotten away claiming no responsibility for the man’s death, except someone at the plant leaked to the man’s family that Toyota monitors its parking lot, noting the time each employee parks in the morning and leaves at night. With this information, the Labor Ministry determined that the technician’s cause of death was over-

Despite the fact that the company union at Toyota refused to help the dead man’s family, who begged the union to press management for his pension in March 2006, the Labor Inspection Standard Office confirmed that the

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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.

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ALL ROADS In Aichi Prefecture (equivalent to our states) in Japan, where auto manufacturing is the largest industry—employing 480,000 workers—it is said that “all roads lead to Toyota City,” which is, in fact, borne out on local maps of the region. The Toyota Motor Company directly employs 70,000 people in and around Toyota City, including 40,000 white collar, or office workers, and 30,000 assembly line workers. It is little known in the U.S. that a full one third, or 10,000, of Toyota’s assembly line workers are either 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 belong 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 Toyota in the U.S. to also drive down wages and benefits in the U.S. auto industry. 21

It is estimated that at least another 280,000 workers in Aichi Prefecture are employed in subcontract plants primarily supplying auto parts to Toyota, with some production going to other auto companies such as Honda and Nissan. This subcontract supply chain is riddled with sweatshop abuse, including the human trafficking of tens of thousands of foreign guest workers—mainly from China and Vietnam—who are stripped of their passports and forced to work grueling hours, often earning less than half of the legal minimum wage.

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TOURING A As we approached the Motormachi plant—Toyota’s second oldest facility opened in 1959—we passed a string of tour busses with their destination signs reading “World’s Top Auto Manufacturer.” Not counting temps and subcontract employees, the Motormachi factory has 4,700 full time workers, churning out 13,000 cars and vans a month. Mid-level managers and supervisors from Toyota plants in China, Vietnam, Philippines, Pakistan, India, Thailand, and a half a dozen other countries, were being trained at the Motormachi plant. The trainees would stay anywhere from a few weeks to up to a half year before returning home. In the body welding section, those not familiar with auto manufacturing were amazed at the delicacy and precision of the huge robots, as they darted in and out of the car body they were soldering. Moreover, the robots were programmed to weld different model car bodies, and even minivans, in whatever order they entered the assembly line. In English, a large sign read: “I’m proud of my body shop.”

On the shop floor the assembly line workers were flying. We watched one worker install a car door every 70 seconds, from beginning to end, and be in place and ready to start on the next car. This worker would install 51 car doors an hour and 411 in the eight hour shift. As the assembly line does not stop, the workers are always moving, darting in and out of cars, repeatedly bending and twisting to complete their operations. All the parts were pre-sorted and constantly supplied to the workers, so there was not a moment’s hesitation. A senior worker explained to us that it would be very difficult for someone over 40 years of age to keep up this pace. Nor did we see any women on the assembly line. Temporary and subcontract employees work right next to full time workers, only distinguished by the different color lettering on their hats—blue for full time and grey for temps. Despite their lower wages and benefits, the temps were flying through their work. Toyota Management tells the temps that if they show themselves to be special workers, they will be hired full time, so they work even harder. Of course, none of this is discussed on the official factory tours. 22

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The same silly children’s melody was playing over and over again in the factory, which could easily get on your nerves. It was a safety warning. When the music was playing it meant that car bodies and wagons loaded with auto parts were moving about the factory by remote control, and the workers had to be careful where they walked. Child-like images of animals were posted on the factory walls extolling the workers: “Let’s clean the factory.” When we were in the factory, it was late afternoon. The workers were working at 96 percent efficiency, with a large overhead electronic scoreboard posting the goal for the dayshift at 313 cars, whereas the workers had produced just 268, when by that time of day they should have completed 277 cars. Workers take their ten minute break right next to their line, at a narrow table, with a shelf underneath where they can store snacks, drinks, cell phones, clean t-shirts, etc. However, when we were there, it seemed that the majority of the workers kept working right through their break in order to set up their parts and tools before the assembly line started up again.

We had the chance to visit one of the meeting rooms on the shop floor, which was just large enough to hold 15 people. Every worker at Toyota must participate in Quality Circle meetings, which they do in groups of 10 to 15.

This is part of Toyota’s corporate philosophy of “continual improvement.” Every month, the group must meet and come up with at least two suggestions to improve productivity and lower costs. Though the activity is mandatory, management considers it voluntary and it is not paid. Still posted on the meeting room wall were Quality Circle reports from the end of 2007. One group decided to increase their auto parts production from 380 to 500 pieces a day for the three months of October through December. Individual workers agreed, writing “let’s cooperate on this,” while another wrote, “let this dream become a man,” and so on. Unilaterally, these workers had increased their production goal by 120 pieces a day, or by 30 percent, with no increase in wages. Management rewards workers who offer productive suggestions with a free lunch or a coupon worth about $5.00 which can be redeemed at the company store. Sometimes, the entire 10 to 15 person group will receive $20 to $30 in coupons to use at the Toyota store. Despite its huge annual profits, rather than give across the board wage increases, Toyota is increasingly moving toward merit-based bonuses and incentives. We asked a senior employee if any workers participating in Quality Circle meetings ever raised complaints or mentioned anything critical of Toyota management. He immediately responded:”No—never—they would never even think of it. It’s impossible!”

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Company

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

Toyota houses about 10,000 workers in its company dorms. In the single workersâ&#x20AC;&#x2122; 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 public 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 Toyotaâ&#x20AC;&#x2122;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 workers staying in the company dorms.

TEMP WORKERS WAIT FOR BUS AT TOYOTA DORM. MIDDLE.

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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 enormous 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

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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. 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 day, which does not include what management refers to as unpaid “voluntary” work, such as the mandatory Quality Circle meetings. The workers receive three breaks, 45 minutes for lunch or supper, and two ten minute breaks. The regular work week in Japan is 40 hours, and overtime is limited to five hours a week.

DAY SHIFT w/overtime

6:25 a.m. to 8:25 a.m. (work)

8:35 a.m. to 10:35 a.m. (work)

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

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

THE TOYOTA

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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 another 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 earn just 60 percent of what full-time workers earn. When benefits are added, the wage disparity is even greater. (For example, fulltime 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 for $3.96 per meal, while temporary and subcontract workers have to pay around $5.94.) 29

FULL TIME $20.49 an hour

$3,551.36 a month

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Temps Earn $12.13 an Hour Temporary workers earn a base wage of 200,000 Yen a month with an average of another 18,583.33 Yen in bonuses. Temps earn $8.63 (41 percent) less than fulltime workers. For every temp Toyota hires, in comparison with full-time workers, the company saves $17,381.73 a year in wages, not including 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.

egy Toyota is beginning to implement at its non-union plants in the South of the United States. Toyota will no longer pay wage close to parity with unionized US auto plants. Instead, following its low-wage temp model, new Toyota employees in the U.S. will be hired at just 50 percent above the prevailing manufacturing wage in the state or county in which they produce. The downward spiral of auto wages and benefits is now underway.

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 legal minimum. (Outside the auto industry, the legal minimum wage in Aichi is 714 Yen, or $6.84 an hour.) On the other hand, the 10,000 temps, or onethird of those employed on Toyotaâ&#x20AC;&#x2122;s assembly lines, earn approximately just 50 percent above the legal minimum wage. This is of critical concern for a number of reasons, not the least of which is that it mirrors the cost reduction strat-

PART TIME $12.13 an hour

$2,102.89 a month

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TOYOTA IS LOWERING Toyota has just by-passed General Motors becoming the largest auto company in the world. For the first quarter of 2008, Toyota sold 2.41 million vehicles worldwide to GM’s 2.25 million. Also, for the first time, Toyota has passed Ford in sales as the second largest auto company in the U.S. (In May, Toyota pulled within 10,000 vehicles of overcoming GM in sales.) Toyota is now in a position to set, and lower, wages and benefits across the U.S. auto industry. In September 2007, the Wall Street Journal reported “...that Toyota Motor Company…now sets the bar for labor costs in the U.S. auto industry.” The industry paper, Automotive News (August 13, 2007) reached the same conclusion.... “Toyota is going to set the pattern for the entire industry---wages, benefits and pensions….” Currently, Toyota wages and benefits in the U.S. are 25 to 30 percent lower than those paid by the Big Three auto companies—General Motors, Ford, and Chrysler. U.S. auto companies pay anywhere from $63.65 to $70 per hour in

wages and benefits to its workers while Toyota pays $47.50 to $50 an hour. Toyota held its wages and benefits down by setting up non-union plants in the South, far from auto industries’ stronghold in the upper Midwest. (Toyota has just one unionized plant in Fremont, California, which is a joint venture with G.M.) To keep the unions out, Toyota has been paying hourly wages which are roughly comparable with the Big Three, but with much lower benefits. Toyota pays around $25 per hour in comparison with G.M.’s $26 to $28. This is about to change. By April 2008, the Wall Street Journal was reporting that “Toyota Motor Company is now pushing to lower labor costs in the U.S., say people familiar with the matter….Toyota has stopped pegging its wages to UAW rates when it builds new plants, company executives said. It won’t cut wages of current workers, but new hires will be paid no more than 50 percent above the prevailing manufacturing wage in the area where a plant is located, they said.”

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In fact, months earlier, in September 2007, an internal memo was leaked at Toyota’s giant Georgetown, Kentucky plant laying out management’s plans to cut $300 million in labor costs across Toyota’s North American operations 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 supervisors—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 its current $25 an hour rate. With Toyota leading the way, the U.S. auto industry is now locked in a race to the bottom. Not to be outdone, Hyundai of South Korea recently opened an auto assembly plant in Montgomery, Alabama offering starting wages of just $14.00 an hour.

At Toyota, Less then Eight Percent of Camry’s Retail Price In the U.S., it takes Toyota an average of 30 hours to build each vehicle. Given that fully 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 vehicle 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

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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 managementlevel personnel living abroad shows Japanâ&#x20AC;&#x2122;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 expensive than New York. Mercerâ&#x20AC;&#x2122;s Annual Cost of Living Survey March 2006-March 2007 Comparative cost of over 200 items including housing, transport, food, clothing, household goods and entertainment, covering 145 cities on six continents.

$138 Billion U.S. Trade Deficit in Autos, Trucks, 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 vehicles and parts, while exporting just $120.9 billion. The U.S. is running a vehicle and parts deficit of $11.5 billion a month.

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TOYOTA’S SUPPLY CHAIN SWEATSHOP ABUSE “It was -Toyota Parts Worker He worked in a subcontract plant on the outskirts of Toyota City supplying auto parts to Futaba Industrial Co. LTD, whose main client is Toyota. With $100 million in annual sales, Futaba is not an insignificant player. At the subcontract plant, the hours are grueling and the work dangerous. Half the workers are full-time employees while the other half are temps, who have zero rights and are paid half the wages full time workers are. The normal shift was supposed to be from 8:30 a.m. to 5:30 p.m., or nine hours, with an hour break for lunch, five days a week. The reality was quite different. The typical shift was 15 to 16 ½ hours a day, from 8:30 a.m. to 11:30 p.m. or 1:00 a.m..

The workers are allowed one, or two, or at the very most, three days off a month. All overtime

is mandatory. Routinely, the workers are at the factory 97 hours a week, but it was not uncommon to work even longer. In the last week of October 2007, the worker we interviewed had been obligated to work seven days, most often 16 ½ hours, from 8:30 a.m. to 1:00 a.m., putting in a 108-hour week. When we questioned him on this, he said “Yes, it is impossible, but we did it. Everyone was exhausted but we couldn’t do anything to change the situation. It was like prison.” He worked at a large metal stamping machine, stamping out cross member bars (which are used as engine support) with a mandatory production goal of completing 1,300 cross bars per hour, or one every three seconds! The work was relentless, exhausting, numbing and dangerous. In a 15 hour shift, he would complete 19,500 operations. At night, he often could not sleep – despite being exhausted – because of the constant throbbing pain in his shoulders and arms. His hands also started failing him, and he had trouble holding a glass, which would often just fall from his hand.

THE TOYOTA

No one was paid anywhere near the overtime legally due to them. There were no paid holidays. He had friends and neighbors who also worked in other subcontract plants in Aichi Prefecture producing auto parts, where conditions are just as bad. We asked him what the workers thought of Toyota’s Just in Time system – “The system produces only what we need when we need it and as much as we need.” “The Just In Time system,” he said, “is a way of shifting the deteriorating working conditions to subcontract plants, with workers bearing the cost of long hours and injuries.” Under such conditions, many workers suffer from repetitive stress disorders. In subcontract plants, temps and even 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. Often 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-

contract workers we heard this fear expressed over and over again. It was the same with the excessive mandatory overtime. When we asked why the workers did not just go home after working 10 to 12 hours, he said the feeling was that “if they didn’t work the overtime to meet Toyota’s [Just on Time] orders, the factory would lose its contract, go bankrupt and everyone would lose their jobs.” We never expected to find such fear among Toyota employees and subcontract workers. This shocked us. Like every other worker we spoke with, the general consensus is that over all, working conditions and wages are deteriorating across Japan, and – like the U.S. – the middle class is under attack and shrinking.

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SUBCONTRACT WORKERS’ HOURS RECORD

Toyota Also Spreads Fear “They [Toyota] want people to fear losing their jobs” This is how New York Times reporter Jeremy W. Peters described Toyota’s scare tactics at its non-union plant in Georgetown, Kentucky: “...and over the last

few months, Toyota management has summoned small groups of workers at its colossal vehicle assembly complex here to attend a presentation titled “Growing in a Changing Market: State of the Automotive Industry.” Executives describe the presentation as a routine update 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 Thailand to Mexico. While no Toyota executive explicitly says it, the theme of the presentation, according to workers who have seen it, is that Toyota will end up in the same troubled waters as GM if something does not change.” --New York Times, September 4, 2007

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Toyota Sweatshop Parts

$1.13 billion to the U.S. The parts came primarily from Japan, but also from the Philippines, China, Thailand and Brazil.

On a single day, March 9, 2008, the Toyota Corporation in Japan shipped nearly 900,000 pounds of auto parts worth $4.6 million to its assembly plant in Georgetown, Kentucky.

Given that Toyota’s auto parts supply chain— even in Japan—is riddled with sweatshop abuse, including exploitation of foreign guest workers from China and Vietnam, what assurances do we have that these parts were not made under illegal sweatshop conditions?

In the first three months of 2008, Toyota shipped—not counting auto parts from Mexico—220 million pounds of auto parts worth

In the first quarter of 2008, the Toyota Corporation in Japan shipped $4,279,467,224-worth of vehicles to the U.S.

MARCH 2008 CUSTOMS RECORD

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TOYOTA LINKED Each year, tens of thousands of foreign guest workers—mostly from China and Vietnam— are trafficked to Japan, stripped of their passports, cheated of their wages and forced to work under abusive sweatshop conditions— including producing auto parts for Toyota. Anywhere from 70,519 to 93,000 foreign guest workers are trafficked to Japan each year. The guest workers, who come from China, Vietnam, Indonesia, Philippines, Thailand and Brazil, are stripped of their passports the minute they arrive in Japan. During their first year, guest worker “trainees” are not covered by Japan’s labor or minimum wage laws. As guest workers are allowed to stay for up to three years, this means that at any given time there are at least 212,000 to 279,000 foreign guest workers in Japan—not including those who may have illegally overstayed their visas. The Japanese government is now considering extending the guest worker visas to five years.

Under pressure—including from the U.S. government—the Japanese Diet (congress) is now considering reforming the law, both to mandate the return of the guest worker passports,

and in 2009, that first year “trainees” will be covered under Japan’s labor laws. (In June of 2007, the U.S. State Department cited Japan in its report on human trafficking: “The government should make greater efforts to investigate the possible forced labor conditions of workers in the foreign trainee program.” In response, in December 2007, the government of Japan announced that it was illegal to strip foreign guest workers of their passports. However, the practice continues.) In the last ten years, there has been a dramatic increase in the number of foreign guest workers employed in Aichi Prefecture, home to Toyota and the country’s auto industry. The surge of poor foreign guest workers coincides with Toyota’s ten year plan to slash the price it is willing to pay its auto part suppliers. Toyota is more than half way into its ten year plan, which in the first three years called for price cuts of up to 30 percent followed by a further 15 percent cut in the fourth through sixth years. There are four years left in Toyota’s cost reduction program.

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Foreign guest workers are not only stripped of their passports—one of the most serious of all human rights violations—they are also prohibited from leaving the factory they are contracted to, or even changing the housing they are assigned. If a guest worker dares change jobs or moves, he or she will be immediately and forcibly deported. Moreover, if guest workers even dare to complain about the abusive and illegal conditions, they will also be deported. (A knowledgeable source in Japan explained that the country’s immigration officials are “very tough,” making it quite easy to have guest workers deported.) This is human trafficking at its worst, as it is only the right to relocate to better factories and more decent housing that would isolate and expose the most abusive sweatshops. The inability to move to new housing also leaves the guest workers in a very vulnerable position, where they are easily cheated and forced to pay wildly excessive rents. 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 employment agencies in their home countries charge them to purchase their three year contracts in 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 to $880 to $1,000 a year. This puts the guest workers under pressure to routinely work overtime, no matter how excessive the hours. At

least in the case of Vietnam, it appears that the government is profiting off the trafficking of its own people, taking 15 percent of the profits of the local manpower agencies. In July 2007, the International Herald Tribute reported the case of 22 year old Ms. Le Thi Kim Lien, a guest worker from Vietnam. She often worked 15 ½ hours a day from 8:30 a.m. to past midnight, seven days a week, while being paid just half of the legal minimum wage at a subcontract plant called TMC, which supplied Tokai Craft, which in turn was under contract to supply auto parts to Toyota and Nissan. Ms. Le and the other Vietnamese workers were fined 15 cents for every minute they took in the bathroom. She and her coworkers sewed arm and headrests for Toyota cars.

GUEST WORKERS OFTEN PAID LESS THAN HALF OF

$2.76 to $3.32 an hour

$478.84 to $574.60 a month

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It is typical for guest worker “trainees” to earn— especially during the first year when they are not covered by Japan’s labor laws—Just 50,000 to 60,000 Yen a month, or $478.84 to $574.60. After deductions for food, housing, local and national taxes and other necessary expenses, some guest workers estimate their take home wages for the entire year amount to less than $600. In September 2006, the Japanese Mainichi Daily News reported that labor authorities warned 23 subcontract plants supplying Toyota, that hundreds of their Vietnamese workers were being paid below the minimum wage. Of the 40 small subcontract plants producing textile related auto parts—like seat, arm and head rests—23, or 60 percent had serious labor violations. Apparently, these serious violations had been going on in broad daylight for at least five years, since 2001. These guest workers were officially brought in under the “Toyota Technology Cooperative” program which was supposed to be supervised by the Japan International Training Cooperation Organization, which was ostensibly set up to train foreign workers in technology occupations, but in fact turned into a cover for human trafficking and sweatshop abuse.

Second and third year guest workers are covered by Japan’s labor laws, and as such should earn at least the legal minimum wage of 820

Yen or $7.85 per hour in the auto industry in Aichi Prefecture. However, especially in the small subcontract factories supplying textile related goods to Toyota, even second and third year workers continued to earn as little as 300 Yen an hour, or $2.87, which amounts to just a little over one-third of the legal minimum wage of $7.85. Despite legal limits on overtime, foreign guest workers typically toil 75 hours a week, putting in 35 hours of overtime on top of their regular 40 hour workweek. Nor in most cases is overtime paid correctly—at the legal overtime premium of at least 125 percent, or $9.81 an hour. With guest workers, they paid—at best—straight time or, more often, well below the legal minimum wage. For a small subcontract plant, such cheating adds up. For a typical 75 hour workweek, the guest workers should have earned $314 for the regular 40 hours of work paid at $7.85 per hour and another $343.44 for the 35 hours of overtime paid at the legal 125 percent premium, or $9.81 per hour. However, instead of earning $657.44 a week, many guest workers are paid just $215.25 for the week, meaning they are cheated of $442.19, or 67 percent of the wages legally due to them. In the course of a year, at this rate, each guest worker could be robbed of nearly $30,000 in hard-earned wages due to them.

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It is not just the Vietnamese who are being exploited. While we were in Japan in April, a guest worker from China—a woman who had been working for three years at a subcontract factory supplying Toyota—reported that she and her coworkers were working 16 hours a day, from 8:00 a.m. to midnight, seven days a week, while they were paid just 300 Yen an hour, or $2.87, which—again—is just about one third of the legal minimum wage due to them, of $7.85. All overtime was mandatory, 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.

small apartment, they would be paying $1150 a month, or more than double the true cost of the apartment. Some subcontractors even extort money from vulnerable guest workers, hinting that they will be forcefully deported if they complain. In March 2008, Japan’s Justice Minister agreed to crack down on violations of guest worker rights, but despite some recent improvements, many of these abuses continue.

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 allegations of at least some sexual harassment of foreign 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

THE RACE TO THE BOTTOM

SUBCONTRACT WORKERS To cut costs, auto parts plants all across Aichi prefecture are turning to subcontract workers, who often make up a third of the workforce and earn less than half of what full time workers do. Employment agencies across Japan recruit subcontract workers to relocate to Aichi Prefecture to work in auto parts plants supplying Toyota and other auto companies. One such agency, based in Okinowa, called K.K.K. Sanua Staff, told new recruits they would receive a signing bonus of 300,000 Yen ($2,970), would work from 8:30 a.m. to 5:00 p.m., and earn a base wage of $2,970 a month. It was all a lie. Once they relocated to the parts factory in Aichi, they were given less than 20 percent of the bonus guaranteed to them, and their wages were one third lower than they agreed to; workers earned just $1,197 a month and not the $2,970 base wage they were supposed to make. Under these conditions, the subcontract workers would earn just $14,365 a year.

Eighty percent of the factories’ production went to Toyota, with the other 20 percent split between Nissan and Honda. Of the total of

slightly more than 300 workers, 100, or one third, were hired as subcontract workers. The subcontract workers were not only paid less, they were also assigned the most dangerous jobs. One of the subcontract workers we spoke with handled strong and potentially toxic adhesives while making brake cables. He used a glue – any contact with which would peel off his skin – to secure the plastic top to the brake cable. The Subcontract workers were also cheated and forced to pay exorbitant rents for company housing. Management charged $400 to $640 a month for a tiny apartment, which in the market would cost much less. Subcontract workers, like foreign guest workers and temps, have few rights. When several of the subcontract employees missed work to take care of their sick children, management simply fired all the subcontract workers who had children. A subsequent local government investigation showed that the employment agencies had been deliberately misleading and cheat-

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 routinely 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 bodies. 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.

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AT TOYOTA, “You sacrifice your life to Toyota,

- Toyota engineer He left for work at 7:30 a.m. each morning and rarely returned home before midnight or 2:00 a.m. He was averaging just four hours of sleep a night, and his wife was increasingly worried that the constant pressure was destroying her husband’s health. He loved his work as an engineer specializing in diesel engines. Officially he was employed by Denso, which is one of the Toyota Group of companies—but was also shifted to Toyota for long periods. 45

At Toyota, his normal shift was nine hours, from 8:30 a.m. to 5:30 p.m., five days a week. In reality, however, he never left before 10:30 p.m. or 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.” When Toyota announces the release date of one of its new model cars, from that moment on, the workers are held to absolute deadlines which they must meet. The pressure and stress are constant. So are the long hours and lack of sleep. For months on end…“life disappears as everything is centered on work.” In the months leading up to a deadline, he was routinely working 80 to 120 hours of overtime a month, including up to 10 hours of work he took home each weekend. Toyota considers work taken home on weekends to be voluntary, off-the-clock activity which—as part of the “sacrifice”—is unpaid. He spent most

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of the weekend trying to sleep to recover his strength for the next week. He was growing seriously depressed. “They never ordered you to stay at night,” he said when we asked why he did not get up and go 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 deadline.” 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.

pressions each year appears to be significantly under-reported. The engineer also confirmed that, similar to Toyota, the workers at Denso received no help from the company union.

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, companies 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-

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TOYOTA BURMESE DICATORS

•

Toyota Tsusho—part of the Toyota Group of companies—is involved in a joint venture with the totalitarian Burmese military.

•

“Business people in Yangon say it is impossible to do business without connections to generals or their children.” (New York Times, 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 desperate need of food, shelter, medical care and clean water.

•

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

•

Louise Arbour, the United Nations High Commissioner for Human Rights said that, “The obstruction to the deployment of such assistance illustrates the invidious effects of longstanding international tolerance for human rights violations by the Burmese military regime. (New York Times, June 3, 2008)

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Toyota’s Dictators Toyota Tsusho, a large holding company which is part of the Toyota Group is involved in several joint ventures with the Burmese military, including being a venture partner with the military and the Suzuki Motor Corporation in manufacturing and selling vehicles which may be used to repress the Burmese people. Toyota Tsusho and Suzuki are working in partnership with the Myanmar Auto and Diesel Engine Industries (MADI), which is a military-run enterprise. In addition, Myanmar Toyota Tsusho—a subsidiary of Toyota Tsusho—operates a commodity, material and auto parts business in Burma, which is impossible to do without military involvement. Nor, with 90 employees, is Myanmar Toyota Tsusho an insignificant company. Another subsidiary of Toyota Tsusho, the Tomen Company, also operates in Burma. All of Toyota Tsusho’s ventures in Burma are generating revenues for the military dictators, which are used to repress and torture the Burmese people. Especially now, with the military Junta pursuing a ridiculous constitutional referendum charade 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 at risk of cholera, typhoid and dysentery—we

must ask why does Toyota insist on supporting the Burmese dictators? Toyota Motors’ link to Toyota Tsusho is clear. Not only is Toyota Tsusho part of the Toyota Group, but Toyota Motors owns 21.57 percent of Toyota Tsusho, while Toyota Industries owns another 11.12 percent, bringing Toyota’s combined ownership to one-third. There is also a revolving door policy, as Toyota Motors and Toyota Tsusho share high level management and Board members. Moreover, sales to the Toyota Motor group accounted for over 16 percent of Toyota Tsusho’s total business in 2006. •

Today, 50 million Burmese people are stripped of their human rights and are the target of extreme and cruel abuse by the military dictators.

•

In Burma, the highest paid private sector factory workers earn just 11 to 12 cents an hour.

11 to 12 cents an hour

$5.31 a week

$276 a year 48

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•

Outside the factory sector, urban workers are earning five to nine cent-an-hour wages. Public school teachers are paid two cents an hour.

•

The military government has declared the Federation of Trade Unions in Burma a "terrorist group." Six activists attending a labor rights workshop in Rangoon on May 1, 2007, have been sentenced to between 20 and 28 years in prison.

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Forced labor, including the exploitation of children, continues in Burma, as do extrajudicial killings, disappearances, rape and torture.

•

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 arrest.

Toyota Toyota Industries Corporation Aichi Steel Corporation Jtekt Corporation Toyota Auto Body Co. Ltd. Toyota Tsusho Corporation Aishin Seiki Co. Ltd. Denso Corporation Toyota Boshoku Corporation Towa Real Estate Co. Ltd. Toyota Central Research and Developments Laboratories Inc. Kanto Auto Works, Ltd. Toyoda Gosei Co. Ltd. Toyota Motor Corporation

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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 passes them on to Toyotaâ&#x20AC;&#x2122;s U.S. plants such as the one in Georgetown, Kentucky.

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TOYOTA’S REPRESSION Attacks legal union The United Nations International Labor Organization (ILO) points to Toyota’s illegal attacks against the lawful union at its plant in the Philippines as…“an illustration of how a multinational company, apparently with little regard for corporate social responsibility, has done everything in its power to prevent recognition and certification of the Toyota Motor Corporation’s Workers Association.” (ILO Workers Group, December 2003)

For years, the Toyota Corporation in the Philippines fought to undermine and block the right of its 1,200 employees to freedom of association and to organize, which are among the most fundamental of the ILO’s internationally recognized worker rights standards. Despite Toyota management’s attacks, the Toyota Motor Corporation’s Workers Association (TMPCWA) won its legal recognition and the right

to collective bargaining in March 2000. When management still refused to even meet, the TMPCWA union organized a peaceful demonstration 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 second time it did so. Toyota’s management ignored this second ruling and instead fired 227 newly elected union officers and members, and suspended another 64 workers who participated in the union demonstrations. In September 2003, the Supreme Court in the Philippines ordered the Toyota Company to recognize the legal union and begin collective bargaining negotiations. Again, Toyota refused. Just two months later, in November 2003, the International Labor Organization also urged Toyota to reinstate the fired unionists and begin negotiating in good faith. The ILO recommended that, “Since the TMPCWA has been certified as the exclusive collective bargaining agent that the government make every

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effort to ensure that the TMPCWA and Toyota Motor Philippines Corporation negotiate in good faith with a view to reaching a collective agreement…” Further, the ILO urged the “reinstatement in their previous employment of the 227” fired union workers and leaders. The International Metal Workers Federation (IMF) launched an international solidarity campaign calling for the immediate reinstatement of the fired workers and that Toyota finally respect the right of its workers to organize an independent union. Unfortunately, throughout this entire period, the company union at Toyota in Japan never lifted a finger to provide solidarity to its sisters and brothers in the Philippines. The company union would not dare oppose, or even criticize, Toyota management. While continuing to block the reinstatement of the illegally fired unionists at its plant, Toyota management worked diligently to help organize an alternative union which they could better control. Toyota claimed that the election of the independent union in 2000 was invalid as supervisory personnel were not allowed to vote. All these years later, 136 of the illegally fired workers are still struggling for their reinstatement.

Toyota headquarters in Japan claims that this is a “local” matter which must be dealt with on the ground in the Philippines and not something the Toyota Corporation can intervene in. This is disingenuous to the point of being ridiculous. The president of Toyota’s factory in the Philippines is, of course, from Toyota’s headquarters in Japan, as are most of the other 30 Japanese managers who run the factory. If Toyota headquarters had the will, they would resolve this crisis overnight. Meanwhile, the situation in the Philippines for the independent Toyota unionists is becoming increasingly dangerous as hundreds of labor activists, outspoken clergy, land reform advocates, journalists and progressive political activists have been killed or disappeared since 2006. “In recent years there has been an increase in the number of killings of political and community activists in the Philippines… The killings are mostly carried out by unidentified men often wearing face masks, who shoot the victims before escaping on motorcycles… Amnesty International is gravely concerned that members of the security forces appear to have been complicit in or have acquiesced to many of these killings.” - Amnesty International, November 28, 2007

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NO RAISE “It [Toyota] looks good on the surface, but underneath it is pretty bad.” -A domestic plant’s supply worker

are damaged in delivery, or if a box is even torn, the price of that part is deducted from his salary.

We met a driver employed at a domestic parts supply company working under sub-contract for the Toyota Bushin Kyahan Company—a major parts supplier which was originally started by Toyota. He delivered auto parts, including batteries, mufflers, and bumpers to Toyota dealerships and repair shops. He worked from 8:00 a.m. to 5:30 p.m., a nine and a half hour shift, six days a week. He had no breaks and was forced to grab a quick lunch whenever he had a spare moment. He had not had a raise in ten years. He explained workers cannot make such a request, and if they did, management would fire them immediately. “Workers are fired if they even ask for a raise.” He earned $596.70 a week, including overtime and bonuses, which is $10.47 an hour and $31,028 a year.

“Things are getting worse” he told us, “and will continue to do so. I can’t see any way out.” When we told the driver that Toyota had a very good reputation in the U.S., he laughed: “It looks good on the surface but underneath it is pretty bad.” He also told us that over the years more of the Toyota parts they deliver are being recalled. He knows this, as he is the one who has to pick up the recalls.

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

These workers were also in a trap, afraid to report violations to the local labor bureau for fear that Toyota would in retaliation pull all the work from their subcontractors, meaning everyone would lose their jobs. This was the same fear we heard over and over. If the workers asked for their rights or for a long overdue wage increase, they would be fired.

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JAPAN’S UNDER ATTACK Like in the U.S., the middle class in Japan is under attack. A USA Today article in July 2006 quotes Mr. Takuya Tasso, a Democratic Party leader, saying: “I see a serious problem. Japanese society is dividing into winners and losers, rich and poor people. The middle class is being destroyed.” The organization of Economic Cooperation and Development (OECD) notes that income inequality in Japan grew twice as fast as in other rich countries between the mid ‘80s and the year 2000. In 1994, 19 percent of the work force was made 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 Communication) The workers see what is happening in Japan, where one third of the work force is either

temps, subcontract, or part time workers. After Japan’s real estate bubble burst in 1991, over the next decade a whole generation was lost as factories and companies stopped hiring people full time. We were surprised again and again at the level of fear expressed by Toyota and other workers. The workers know exactly what is going on and are receiving no real support from the company union at Toyota. The workers know they better keep their heads down and protect themselves.

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U.S. Auto Companies Lose Tens of Billions of Dollars

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

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G. Richard Wagoner, CEO of GM – $10,181,153 in total compensation in 2006.

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Robert C. Nardelli, CEO of Chrysler – left Home Depot in January 2007 with a golden parachute of $250 million in severance pay.

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COMPANY CONTROLLED UNION In Japan, unions are organized very differently than in the United States and Canada. In Japan, unions are enterprise-based, meaning there is a separate union to represent just Toyota workers, whereas in North America unions are organized on an industrial basis, covering multiple companies. As startling as it may sound, the only serious research to date on labor practices at Toyota in Japan was carried out more than 35 years ago by a young freelance journalist, Mr. Kamata Satoshi, who spent six months working at a Toyota auto plant. It was in 1972 that he released his book, Factory of Despair: Diary of a Seasonal Auto Worker. Today, one third of all Toyota assembly line workers in Japan are “seasonal” or temporary workers, making less than sixty percent of what full time workers do, and even less when benefits are taken into account. Thirty-five years ago there was a “company” union at Toyota, and nothing has changed. If anything, conditions for Toyota workers have gotten worse.

As mentioned earlier, Toyota workers participating in mandatory Quality Circle meetings—

without pay—would never even think of using the meetings to raise grievances or complaints against management. Regarding workers raising grievances, one senior worker told us: “No—never—they would not even think of it. It’s impossible!” Thirty-five years ago, Mr. Kamata Satoshi found the same fear and constraint when he worked at Toyota. “That just doesn’t happen [i.e. to raise grievances]. Because it doesn’t do any good to say it. I mean, even if they didn’t like something, they wouldn’t go to the union with their complaint. The reason is that union officials go back to their original work after two years. The union workers also have power depending on their position within the company, so they defend the company.” “The Quality Circle movement is to control with small groups…There are always personal relationships in labor-management relations and workers are tied to these relations…in Japan they control workers with that kind of human relationship.” (Mr. Satoshi interviewed by Tim Shorrock for “The Multinational Monitor,” October 1983).

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During our April 2008 visit to Japan, many senior Toyota workers told us that the official union sees its primary role as protecting Toyota’s productivity gains. Again, nothing has changed in the last 35 years. “At the core of Japanese labor management relations are the enterprise-based unions. The development of the enterprise is of prime importance for the union….If ones company doesn’t get ahead, ones livelihood will not improve, that’s the connection. “At the heart of Japanese labor-management relations is the ancient concept of sacrificing one’s personal interests to the public good. “…the union does not propose something unacceptable to management, but makes demands in tune with the times. The union cadre and management are always talking with each other. Whatever they agree up is forced upon the workers.” (Mr. Satoshi’s 1983 interview with the Multinational Monitor). Almost verbatim to descriptions of conditions 35 years ago, senior Toyota workers told us that the company union will not even demand 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-

crease the workers would have to strike, which they told us is impossible to imagine. Union consciousness is very low at Toyota. The union has no popular education training for its workers in grievances, contracts, political or grassroots action. Some workers we spoke with described the union as a “tool of management.” It was back in 1962 that the Toyota union reached a master agreement with the company, (1) committing to collaborate with management to continually improve productivity, and (2) to improve working conditions. Point two certainly appears to have gotten the short end of the deal. • It appears that the company union at Toyota did not oppose management’s hiring 10,000 non-union temporary and subcontract workers who now make up 33 percent of Toyota’s assembly line workers, and who earn less than 60 percent of what full time workers do. • The Toyota company union has been silent in the face of Toyota workers being “overworked” to death, due to excessive overtime demands, much of which is unpaid.

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• The Toyota union has not challenged management 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 Toyota’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.

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Despite Soaring Profits Toyota “union” Foregoes Wage Increases

“Toyota trade union’s cooperation with management to decide the wages illustrates its nature. In March 2002, when Toyota recorded the unprecedented pre-tax profit of a trillion Yen, management responded to the union’s demand for a unified pay increase with zero raise. This answer was due to one word from Okuda Hiroshi, the president of the Japan Federation of Employers’ Associations (Nikkeiren) and the Board Chairman of Toyota. Okuda ordered the zero raise so as to suppress across-the-board pay raises in all Japanese enterprises. No wage increase 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 allaround also awarded zero raises this year….” Labour for globalizing Asian Corporations: A Portrait of Struggle Asia Monitor Resource Center, 2006, page 200

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JAPAN • There are 127.4 million people in Japan. • 63.82 million people are employed. Excluding management, there are 50.88 million workers, of which 16.77 million, or 33 percent, are temporary (fixed contract), subcontract or part time workers.

• Average household living expenses are $3,945.60 a month and $47,347.25 a year.

• There are 11,610,000 manufacturing jobs in Japan, which comprise 18 percent of the workforce. Japan’s manufacturing wages are the third highest in the world after the E.U. and U.S.

• The official unemployment rate in Japan is 4.1 percent.

• The Japanese work the longest hours in the world, followed by workers in the U.S. and U.K. In Japan, workers toil an average of 19.5 days a month, working 150.9 hours (including 10.7 overtime hours), and 1811 hours a year.

• The U.S. is Japan’s largest export market. Japan enjoys an overall worldwide trade balance surplus of $105 billion. According to the Economist Intelligence Unit “Country Profile 2007”: “Japan exhibits little openness to foreign trade. As a proportion of current GDP, the value of two-way foreign trade in 2005 stood at around 20 percent compared with around 65 percent for Germany.”

• Average earnings in Japan are $18.71 an hour, $651.58 a week, $2,823.53 a month and $33,882.35 a year. (Based on 2006 data and 150.9 hours of work per month.)

• Average household income in Japan is $4,432.20 a month and $53,186.44 a year. The average household is 3.44 people, with 1.65 people working.

• Sixteen percent, or 7.9 million private sector workers, belong to unions.

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• 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 Japan 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 foreign 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. • Japan and China are by far the largest holders of U.S. Treasury securities with Japan holding $586.6 billion and China with holdings of $486.9 billion. Together, Japan and China hold $1.1 trillion of U.S. Treasury Securities.

$254 Billion With Japan -in last three yearsU.S. Trade Deficit with Japan

[Sources: The Economist Intelligence Unit/ Monthly Report April 2008 The Economist Intelligence Unit/ Country Profile 2007 Statistical Handbook of Japan/Chapter 12 Labor-Ministry of International Affairs and Communications

: $82,798,670,000 : $88,441,970,000 : $82,681,590,000

Ministry of Internal Affairs and Communications/Basic Survey on Labor Unions, 2006 Annual Report on Family Income and Expenditures Survey (2005) ]

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SOME OF THE REAL IN JAPAN All Toyota Union (ATU) Chiryu, Aichi, Japan Email: Website Contact:

atunion@mail.goo.ne.jp www.katch.ne.jp/ atunion (Japanese) Mr. Yasuhiko Chikamori, Executive Committee

The independent and progressive All Toyota Union is extremely small, but its leaders are smart, genuine and committed, and it represents a very important step in organizing an independent union at Toyota. The company union at Toyota is already attacking the ATU. The ATU has been denied leafleting and posting rights in the factory. All Japan Ship-building & Engineering Union-Kanto Regional Council Yokohama City, Japan Fax: Contact:

(81) 45-441-0747 Hiroshi Hayakawa

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

Japanese ships to the Philippines where they were dismantled under extremely dangerous conditions, which were also harmful to the environment. Currently the union is involved in a campaign to ban asbestos and seek justice for its victims. AIROREN (Aichi Prefectural Federation of Trade Unions) Nagoya City, Japan Email: Website: Contact:

kurematsu@airoren.gr.jp www.airoren.gr.jp Saichi Kurematsu, General Secretary

The Aichi Prefectural Federation of Trade Unions is another independent and very effective union. They have widespread and solid contacts with subcontract and foreign guest workers employed in Aichiâ&#x20AC;&#x2122;s auto industry. Much of the beginning of progress toward ending the trafficking and exploitation of foreign guest workers is due to their work.

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GU (General Union) Nagoya City, Japan Email: Website: Contact:

JMIU Nagoya City endo@generalunion.org www.generalunion.org Endo Reiko, Vice Chair

The General Union, which has been around for a long time, is a independent and progressive union open to all workers. It has tens of thousands of members spread across many industries. Support Group for TMPCWA (Toyota Motors Philippines Corp Workers Association) Yokohama City, Japan Email: Contact:

monika@jca.apc.org Rie Monika Ikeda

The Support Group for TMPCWA has done amazing cross-border work to support the unionists fired for daring to exercise their legal right to organize a union at Toyotaâ&#x20AC;&#x2122;s plant in the Philippines. Almost single handedly, the Support Group has kept a campaign going for the last eight years to support the Toyota Philippines workers.

Email: Contact:

jmiu_aichi@roren.net Ohta Hiruki

JMIU is an independent grass-roots union, like the NFU. Dr. Fumio Kaneku Professor, Yokohama City University Email:

kaneko@yokohama- cu.ac.jp

An economist who has lectured in the U.S. and is an expert on the ongoing destruction of the middle class in Japan. Labornet Japan Email: takaheim@jca.apc.org Website: www.labornetjp.org (Japanese)

A good source of progressive labor reporting in Japan.

NFU Nagoya City, Japan Website: Contact:

http//homepage3.nifty. com/fureai-union/ 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 nonunion workers. 64

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Toyota Corporate Headquarters in Japan: Katsuaki Watanabe, CEO Toyota Motor Corporation 1, Toyota-cho Toyota, Aichi 471-8571, Japan Phone: +81-565-28-2121 Fax: +81-565-23-5800 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