Toyota fires workers even while earning 1 trillion dollars in profit

Japan Press Weekly

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Toyota fires workers even while earning 1 trillion dollars in profit

Amid the deepening global financial crisis that has triggered an economic downturn, the socially disadvantaged are suffering most. At the world’s leading automaker, Toyota Motor Corporation is firing a large number of fixed-term employees.

“It is sad to see huge piles of futons (Japanese bedding) at the dormitory entrance when I go to work in the mornings. These futons are no longer in use because many fixed-term workers were fired. Five rooms next to mine are vacant. The dormitory rooms were all occupied last year. At present, only one third of them are in use. The dormitory is becoming like a ghost town,” wrote a fixed-term worker on September 19 in his diary.

Fixed-term workers are the first to be fired on the grounds that their term of contract has expired.

In September, there were 6,800 fixed-term employees at Toyota, down about 2,000 from March. There were 10,800 fixed-term workers in 2004, who accounted for about 30 percent of Toyota’s plant workers.

Toyota Kyushu in Fukuoka Prefecture in western Japan is a subsidiary of Toyota Corp. that assembles the Lexus, a luxury model. In the June-August period, it fired 8,000 temporary workers.

Toyota’s domestic sales have been in decline for several years. There has also been a substantial decrease in shipments to the United States, which accounts for about 30 percent of Toyota’s global sales.

Yet, for the 2007 business year ending in March 2008, Toyota had a record net profit of 1.7 trillion yen (or about 17 billion dollars). Although its profit is expected to decrease, Toyota estimates that its profit will stand at about 1.3 trillion yen in its financial report next March. In addition, it has more than 13 trillion yen, or about 130 billion dollars in internal reserves.

In October, Toyota announced the “Toyota iQ,” a new minicar. Ishida Kuniyoshi, a 59-year-old worker at the Toyota Takaoka plant, where the iQ’s are being assembled, said, “Fixed-term workers are being fired at my plant. They are going back to their hometowns. Call someone who was fired and you will hear a grievous cry, saying, ‘I go to the Hello Work office (Public Employment Security Office) every day to find that no job is available.’ Toyota has amassed more than 13 trillion yen, or about 130 billion dollars in internal reserves. With this amount of money Toyota workers could spend more than 10 years enjoying their lives every day without having to work. So, the use of only a small fraction of these reserves can save the jobs of fixed-term workers.”

At Toyota, fixed-term workers are working under a contract for up to 35 months. Their initial contract is for 4 to 6 months. After this, the length of contract is six months or 12 months at the longest. The company uses this short-term contract method of employment so that it can dismiss fixed-term workers at any time.

Article 14 of the Labor Standards Law states, “Labor contracts, excluding those without a definite time frame, and excepting those providing that the period shall be the period necessary for completion of a specified project, shall not be concluded for a period longer than three years.

The company usually renews fixed-term contracts earlier than the end of a three-year period because a renewal of a three-year contract would be regarded as a contract without legal precedent. - Akahata Sunday Edition, October 26, 2008