Ja­pan safety fail­ures sig­nal deeper malaise

Shift from life­time em­ploy­ment un­der­mines much-lauded qual­ity

Global Times - Weekend - - AUTO -

Aseries of safety scan­dals at Ja­panese com­pa­nies have put the coun­try’s fac­tory floor un­der scrutiny as man­u­fac­tur­ers strug­gle with in­creased pres­sure on costs, stricter en­force­ment of stan­dards and grow­ing com­pe­ti­tion.

With mar­gins squeezed by a stag­nant do­mes­tic mar­ket and ri­valry from China and South Korea, many fac­to­ries have cut costs, re­duc­ing their re­liance on work­ers in life­time em­ploy­ment in fa­vor of la­bor­ers on tem­po­rary contracts.

As they have done so, safety scan­dals have erupted across the coun­try’s much-vaunted man­u­fac­tur­ing sec­tor, with Ja­panese au­tomaker Subaru Corp re­cently join­ing Nis­san Mo­tor Co in ad­mit­ting it failed to fol­low proper ve­hi­cle in­spec­tion pro­ce­dures.

Nis­san found in Septem­ber that un­cer­ti­fied tech­ni­cians had been car­ry­ing out fi­nal in­spec­tions of ve­hi­cles for decades. That prompted it to re­call 1.2 mil­lion ve­hi­cles, in­clud­ing all pas­sen­ger cars it pro­duced for sale in Ja­pan over the past three years.

The plants will re­sume pro­duc­tion once the fi­nal in­spec­tion pro­ce­dures have been brought in line with trans­port min­istry re­quire­ments and the min­istry has ap­proved the mea­sures, a spokesman for the au­tomaker said on Tues­day.

Nis­san has com­pleted those mea­sures at one of its assem­bly plants and it ex­pected to have made sim­i­lar changes at five other plants by the end of the week, the spokesman said.

Nis­san noted that the sales of its new pas­sen­ger ve­hi­cles in Ja­pan prob­a­bly fell by half in Oc­to­ber from a year ago amid the scan­dal.

In ear­lier Oc­to­ber, Ja­pan’s third­largest steel maker, Kobe Steel, said its work­ers had tam­pered with prod­uct spec­i­fi­ca­tions for years, leav­ing com­pa­nies around the world scram­bling to ver­ify the safety of cars, planes, trains and elec­tri­cal goods.

Un­able to eas­ily lay off “reg­u­lar” em­ploy­ees – full-time em­ploy­ees with per­ma­nent contracts and pay scales based on se­nior­ity, com­pa­nies have in­creas­ingly come to rely on “non-reg­u­lar” work­ers – temps, part-timers and short-term con­tract work­ers.

Th­ese non-reg­u­lar work­ers al­low com­pa­nies to cut costs and ad­just their work­force, said Koji Mo­rioka, emer­i­tus pro­fes­sor at Kan­sai Univer­sity and an ex­pert on work­place is­sues. But it has led to a de-skilling of the fac­tory floor, low­er­ing stan­dards and in­creas­ing the like­li­hood of wrong­do­ing and ac­ci­dents, he said.

“The use of th­ese ‘dis­pos­able’ work­ers is greatly in­creas­ing,” Mo­rioka said. “The loss of ex­pe­ri­enced, skilled work­ers on the fac­tory floor is be­com­ing more and more risky.”

The share of non-reg­u­lar work­ers in the la­bor force has risen from 20 per­cent in the early 1990s to a record 37.5 per­cent last year. The pay gap is stark, with reg­u­lar work­ers last year on av­er­age paid 321,700 yen ($2,825.9) per month com­pared with 211,800 yen for con­tract work­ers.

Com­pa­nies are fail­ing to pro­duce the skilled work­ers needed to en­sure stan­dards are met in ar­eas like safety at a time when scrutiny is in­ten­si­fy­ing around the world and lapses are met with greater crit­i­cism, said Parissa Haghirian, pro­fes­sor of Ja­panese man­age­ment at Sophia Univer­sity in Tokyo.

“There is a real hu­man re­source prob­lem,” Haghirian said, with the tra­di­tional model of hir­ing work­ers straight out of school or univer­sity, teach­ing them on the job and ro­tat­ing them among de­part­ments no longer func­tion­ing well.

Fierce com­pe­ti­tion

With the ra­tio of com­pa­nies com­plain­ing of la­bor short­ages at a 25-year high and with em­ploy­ers need­ing spe­cial­ists but fail­ing to pro­duce them in­ter­nally, com­pe­ti­tion for skilled work­ers is likely to be­come more fierce, Haghirian said.

“I pre­dict high per­form­ers will leave more quickly... leav­ing com­pa­nies in trou­ble be­cause th­ese peo­ple tra­di­tion­ally would stay and drag ev­ery­one else along,” she said.

Ja­panese com­pa­nies are not alone in be­ing caught up in scan­dals, with Euro­pean and US com­pa­nies caught cut­ting cor­ners and ma­nip­u­lat­ing re­sults in ar­eas like ve­hi­cle emis­sions tests to the sale of meat. But the Ja­panese com­pa­nies face ques­tions over whether they can adapt quickly enough.

Some Ja­panese mak­ers have taken the at­ti­tude that “be­cause the fac­tory floor is well run, qual­ity con­trol and in­spec­tion can be ap­plied as an af­ter­thought,” said Tadashi Ku­ni­hiro, a lawyer who is a direc­tor and au­di­tor on com­pany boards. Com­pa­nies, he said, were not plac­ing their most skilled work­ers in qual­ity con­trol roles.

While safety lapses have been go­ing on at some com­pa­nies for years or even decades, the de­cline of the life­time em­ploy­ment sys­tem has likely sapped the loy­alty of work­ers who are more likely to raise con­cerns them­selves, Ku­ni­hiro added.

Im­prov­ing trans­parency at com­pa­nies has been a key plank of Ja­panese Prime Min­is­ter Shinzo Abe’s cor­po­rate gov­er­nance re­forms through mea­sures such as boost­ing the num­ber of out­side di­rec­tors. But ex­perts ques­tion whether such re­forms can do much to pre­vent safety scan­dals.

“Even if there are more out­side di­rec­tors, if there is cheat­ing on the fac­tory floor there is no way they will be able find out,” a se­nior ex­ec­u­tive in the alu­minum in­dus­try said, speak­ing on the con­di­tion of anonymity. “Even ex­ec­u­tives don’t know what’s hap­pen­ing on the fac­tory floor,” he noted.

Ex­ec­u­tives are guilty of be­com­ing too de­tached from the op­er­a­tional side of the busi­ness, said Toshiyuki Shimegi, president of Porsche Ja­pan.

“There is a need for more mi­cro­man­age­ment,” he said on the side­lines of the Tokyo Mo­tor Show held from Oc­to­ber 27 to Novem­ber 5. “They are miss­ing the hands-on ap­proach.”

Photo: VCG

Subaru Corp President Ya­suyuki Yoshi­naga (front) bows in apol­ogy at a press con­fer­ence on the com­pany’s in­spec­tion scan­dal in Tokyo, Ja­pan on Oc­to­ber 27, 2017. The Ja­panese au­tomaker said that un­qual­i­fied work­ers en­gaged in fi­nal ve­hi­cle in­spec­tions at a do­mes­tic fac­tory for over 30 years.

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