Japan Press Weekly

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2015 February 25 - March 3 TOP3 [ECONOMY]

JCP Majima: Toyota makes huge profits by exploiting subcontractors

Japanese Communist Party lawmaker Majima Shozo said at a Lower House Budget Committee meeting on March 2 that Toyota Motor Corporation has forced its subcontractors to cut unit prices by a total of three trillion yen during the past 14 years.

It is estimated that Toyota’s current net profits will reach a record high of 2.92 trillion yen at the end of March. On the other hand, the automobile company has pressed its subcontractors to reduce unit costs twice every year in the name of “cost improvements”.

Majima pointed out that the Subcontractor Promotion Law stipulates that unit prices shall be decided through “negotiations” between parent companies and subcontractors, but in actuality, subcontracting companies are forced to accept the price asked by parent corporations. He quoted an owner of Toyota’s subcontractor in Aichi Prefecture as saying, “If we complain to authorities about the price, we will lose our contract.”

Majima stressed that a unit price should be determined by accumulating production costs, not at the parent company’s own discretion. He urged the government to direct the car maker to stop exploiting its subcontractors.

Industry Minister Miyazawa Yoichi replied that he shares a concern regarding this issue with Majima.

Pointing to the fact that Toyota’s internal reserves amounted to an all-time high of 15.4 trillion yen at the end of fiscal 2013, the JCP parliamentarian demanded that the state push big businesses to pay fair unit prices to subcontracted small- and medium-sized businesses so that they can raise workers’ wages.

Finance Minister Aso Taro said in response, “The government has no authority to make them do so, but you make an important point.”


Past related article:
> Toyota Motor pays no corporation tax [June 1, 2014]