Skilled small machinery makers rise to break through crisis

Urged to break through the local economic crisis, about 160 local
manufacturers and retailers who are members of the local Democratic
Producers and Traders Association attended a rally on November 27 in Tokyo's
Ota Ward together with local unions and the Japanese Communist Party.

In Ota Ward, which is known for its many small- and middle-sized
machinery makers with high technology, two credit unions went bankrupt
recently. The Koizumi Cabinet policy of accelerating the writing off of bad
loans held by major banks was apparently the cause.

About 3,000 small machinery manufactures are depositors to the two failed
credit unions, and they are on the verge of going bankrupt, causing a domino
effect.

The two credit unions faced difficulties after the Financial Services
Agency began early this year to make the two credit unions apply stricter
standards on the loans they grant. Clearly, the Koizumi Cabinet is to blame
for the failure of the two local financial institutions.

The technological level of the metal and machinery industry in Ota Ward
is very high. Trial models of major electronics manufactures are actually
produced in Ota Ward. Corporate restructuring at these major electronics
makers, however, has been a heavy blow to the small machinery makers in the
ward.

These small machinery manufacturers can only survive through work
contracted with contractors or subcontractors. Pressure is constantly
brought to bear on them to cut unit costs as much as possible.

A local group surveyed has found that 13 out of 27 firms have experienced
a 20-50 percent decline in contracts or sales during the past spring and
summer. Eight of these firms said that major electronics makers, including
Toshiba Corp., Hitachi Ltd., NEC Corp, and Fujitsu Ltd. asked them to reduce
their unit cost by 20-50 percent.

"Virtuosity" may be the word for these skilled engineers who can
precisely mill a metal model of only a few millimeters, like the tiny metal
parts used for mobile phones. Masters of these technologies are aging and
the manufacturing industry will hollow out sooner or later.

As a step to break through the crisis, representatives of the district's
manufactures made representations to major electronics makers to ensure that
wage levels and jobs are maintained for workers 45 and older.

They have also appealed publicly asserting that the manufacturing
industry is essential for nation-building in resource-poor Japan. To defend
this base, they are demanding a 5-year moratorium on the repayment of the
principal and interest on all their loans. (end)