Japan Press Weekly

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2016 May 25 - 31 [ECONOMY]

Mitsubishi fraud affects local jobs

The falsification of fuel economy data on minicars of Mitsubishi Motors has been adversely affecting regional economies and employment. Akahata on May 25 reported on the aftermath of the Mitsubishi shock at a Mitsubishi factory in Kurashiki City in Okayama Prefecture.

One month has passed since the Mizushima Plant stopped running its assembly lines for light vehicles. To produce an automobile, 20,000 to 30,000 parts are necessary. Around the plant, many subcontractors have made auto components for Mitsubishi under the multi-layered subcontracting pyramid structure. The number of the first- and second-tiered subcontractors alone amounts to 509 in Okayama, retaining 23,630 employees.

The Mizushima Plant and the first-tiered subcontractors have instructed their workers to stand by at home since the production suspension. A local public job-placement office has set up a helpdesk exclusively for Mitsubishi-related workers. The head of the office said, “Mitsubishi Motors knows only the first-tier subcontractors which it directly deals with. So, we don’t know how many more people will be affected.”

Take a few examples: The owner of a company, where the manufacturing of Mitsubishi minicar components accounts for 80% of its work, had to ask four of its eight workers to take time off. A subcontract factory, up until the revelation of the Mitsubishi fraud, used to have sales of about 700,000 yen a month. However, sales decreased by 600,000 yen in May. The owner of this small factory had to have young workers work only in the mornings three days a week. The 78-year-old owner said he will have to start using his pension benefits to make up for the shortfall in due wages to the workers. At another subcontractor, the owner had no choice but to lay off five of its eight workers.

Tanabe Yutaka, senior director of a local chamber of commerce and industry, said, “These who work at Mitsubishi-affiliated companies and subcontracting factories, of course, live here, have families, and do their shopping here. I cannot image how big an impact on the local economy and people’s livelihoods will be if these people lose their jobs.”

Since early May, Japanese Communist Party Dietmembers as well as local assemblypersons at the prefectural and city levels have been demanding that Mitsubishi compensate its subcontractors for their losses, and that the state and local governments implement measures to secure jobs for Mitsubishi employees and subcontracting workers.

The Ministry of Economy, Trade and Industry now provides a consultation service for Mitsubishi workers. The ministry also decided to apply the guarantee system of the Credit Guarantee Association to small enterprises suffering serious losses caused by the suspension of Mitsubishi car production and sales.

Past related articles:
> Automakers’ ‘profit-first’ attitude leads to fuel efficiency fraud [May 23, 2016]