Japan Press Weekly

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2008 December 3 - 9 [LABOR]

Canon fires contingent workers while adding 280 billion yen in surplus funds

Leading Japanese optical manufacturer Canon has reported that its surplus funds reached 3.3 trillion yen at the end of September, an increase of about 280 billion yen over the past year.

Canon Chairman Mitarai Fujio also heads the Japan Business Federation (Nippon Keidanren).

Despite the huge amount of savings, Oita Prefecture-based Canon’s subsidiaries, Oita Canon Inc. and Oita Canon Materials Inc., are planning to slash about 1,200 temporary and independent contract jobs. Another subsidiary in Aomori Prefecture, Canon Precision Inc., will cut about 500 contingent jobs.

The average contingent worker receives 1,000 yen an hour. Their annual income is about 2 million yen (without overtime pay) if they work eight hours a day for 21 days in a month. Full-time workers at Nagahama Canon Inc. plant in Shiga Prefecture, for example, are paid about 4 million yen in annual income.

Canon could secure about 1,700 contingent jobs with 3.4 billion yen, which is just 1.2 percent of the 280 billion yen of the increased surplus funds. The money needed to promote all the 1,700 contingent workers to full-time positions will be about 6.8 billion yen, 2.4 percent of the funds.

Canon has announced that its rate of profit is in decline, but is still expected to report 580 billion yen in consolidated business profits. It paid 71.5 billion yen in dividends in August. Canon has more than enough financial resources to maintain its current workforce.

When Prime Minister Aso Taro requested Mitarai to keep the jobs for contingent workers, Mitarai promised, “(As Nippon Keidanren chair) we will do our best to secure their employment.”

It has become more obvious than ever that making ‘request’ is not enough. The government should get companies to retract their layoff plans under strict directives direction and oversight.” Japanese Communist Party Chair Shii Kazuo expressed this opinion to Aso on December 5.