As Abe weighs labor reform, IBM emerges as test case for firing workers

Well said Badman. I think the only major real "culture" shock I had here was watching the amount of time spent on doing tasks that could easily have been done in half the task back home. What shocked me even more was that the foreigners who took this in and followed the same style were quickly promoted even though they would have been left to rot back home in terms of promotions and moving up. Seems in Japan they want yes men (and men that is) who will also waste as much time and hang out long after they should've gone home.

For those of you who have had the opportunity to work at a Japanese firm and have experience working for western companies, I'm sure you are well aware at the huge disparity in efficiency and production. I have had the unfortunate experience at being charged with change management with the aim at improving operational efficiency at some firms in Japan and that had to be one of the most frustrating experiences in my life.

The push back I received under the guise of cultural differences was astounding. I found a recurring theme across firms of laziness, disguised as procrastination mixed with a desire to never quite reach the desired conclusion to a task, and working ungodly long hours. I believe these long hours allowed one to justify their existence and it helped define their self-worth, but worth for a company is measured by output and Japan's productivity is 31% lower than that of the United States according to the OECD.

Think about that! A Japanese worker has to work 12 hours to produce what an American worker bangs out in 8.28 hours. And America is not even close to being the most efficient. Norway is 38% more efficient than the US. I'm not sure my calculator could compare them to Japan.

Now before I get slammed for Japan bashing, that is not my intention. I am merely trying to point out some facts as they relate to this article. Drastic changes are necessary for Japan to regain some global competitiveness. I make no suggestion that this is a good thing. It is what it is and if the Japanese people don't want to drastically change their culture in order to adopt what gaijin consider to be ideal, I have no problem with that. But if they choose the latter, then they can expect an economic contraction of about 30% over the next 25 years and their economy will shrink enough to fall out of the top 10 in the world and how would that affect the Japanese psyche?

they are doing this because it's a hell of a lot cheaper.

Wrong. Disptach companies are not always cheaper and in many cases, they are actually more expensive. Companies and schools are going with dispatch because they get easily get rid of the deadweight, not pay benefits... It isn't because of the cheaper option.

I also really dislike unions because many of the members are very pro-union and very agressive about it...

tmarie Companies are not using dispatching companies because the unions are keeping incompetent non-Japanese workers in part- time jobs - they are doing this because it's a hell of a lot cheaper. Piddling spats with eikawa teachers who were treated as tourists anyway are a little-watched sideshow. Your vision of union power sounds like the UK of the seventies. These unions are not holding companies to ransom anymore and the use of dispatch workers ( many of whom are also lazy and incompetent ) isn't because they've been forced into an unfortunate but necessary escape route by snarling union hounds, it's a question of cost-cutting. On the whole, unions are seen as a minor irritation nowadays. As for your question of why I mentioned your omission of any comments blaming companies, wouldn't you think comments on a topic dealing with companies laying off workers would at least mention the policies of companies who lay people off?Perhaps that's just me.

The entire situation dates to the 1980's, when Japan was enjoying it's "bubble era". The management from this era, and many of the workers were from the immediate post-war era (so-called Showa men). Since Japan's industry and infrastructure had been devastated by the war, and intense amount of hard work was done to recover and rebuild. This hard-work ethic still existed in the 80's. The seniority-based systems in Japanese companies were workable as everyone worked hard.

But the success of Japan at this time came at a large cost to western companies, who for the most part also used the seniority based system. In 1980, televisions and many consumer electronics were made in America, by 1990, almost none were. In order to compete with Japan, American and other economies began to rethink their situation, and the performance-based system was born.

Later, the bubble burst, the worldwide economy was still in pain from Black Monday, and an economic recession took hold. The first economies to emerge from this recession were those who had adopted the performance based system. Japan never changed, manly for cultural reaons, and Japan still has not recovered from the burst of the bubble era.

Culture and long-ingrained company politics systems have made Japanese companies resistant to change, and the hard-working postwar generation have been replaced by pseudo-educated men who grew up in relative ease, playing video games and reading comic books. With the quality of "men" who have no personal experience with hardship, or experience with hard work entering the workforce nowadays, the old seniority-based system is not tenable. Since the new generation can't, or won't work hard, they must stay atnwork for longer hours. If this doesn't work, then three staff members must be hired to domthe work that was once done by two. Since longer hours and more staff are required to complete tasks, the payroll must be spread more thinly, meaning that each worker must be paid less. As Japanese companies have earned little to no profit in the last two decades, there is little profit to share with staff, and, as Japanese executives and CEO's are already paid very little compared to their western counterparts, we can't expect to cut even more deom from their pay and distribute it to the regular workers.

The unions were begun with good intentions, but everyone knows that "the road to hell is paved with good intentions". To force employers to provide a fair wage and proper benefits is is one thing, but to be forced to accept poor performance, or no performance, Is another. One cannot pay high wages for poor quality work and expect to b able to provide wages or work for very long. And, as companies provide the largest part of the government's revenue, if the companies fail, the government will not have the money to provide "safety nets" to the people. It's a terrible situation which will continue to get worse unless things change.

Dispatch agencies are used mainly because they provide cheap labor, and a company is not responsible for the expense of providing benefits to dispatched staff. This may not sound fair, but if you are a Sony, Sharp, or Olympus, (or a hundred other companies in Japan) and your company has not earned 1 yen in profit in the last 5 years, how can you afford to pay full-time wages and benefits to staff?

bfg4987Jul. 12, 2013 - 01:29AM JST I could do everything my uncle ever did for GM better in under three months of training. He brags about the number of times he skipped off work and went fishing or something while someone else clocked him in. He's 55, retired, and will never have to work another day in his life, because he's living off his disgusting pension.

I doubt most of the GM workers who retired and receives pension at 55 lives comfortably. GM pays average of $54 dollars for each year of service. If your uncle didn't have any savings, he is living in poverty.

99% of managers can't perform most of the tasks of so-called "unskilled" labor.

99% of NFL coaches couldn't play as a linebacker. Your point?

The problem is that too many people are making critical decisions in companies today with your level of misconceptions and incompetence.

You would be well-served to learn how to construct an argument that doesn't boil down to "You are a moron, my opinion is correct."

$40 thousand a year is hardly Dom Perignon for breakfast.

LOL! One can stretch it to afford a used GM car.

I could do everything my uncle ever did for GM better in under three months of training.

So you say. Your uncle was probably given to grandiose delusions too. All that is indicated here is evidence of a product of genetics and family environment.

You might not like it, but unskilled labor isn't worth anything anymore...Because jobs that every person in the universe is capable of doing should be compensated accordingly.

LOL! 99% of managers can't perform most of the tasks of so-called "unskilled" labor. So, what is it that they are actually managing? And then there is the task itself. Living in a part of the universe called Planet Earth -- I am not sure where you are from -- there is a knowledge component to every task. Some knowledge is very basic and other knowledge is, as Deming referred to it, very profound. Has management designed the task to shield the worker from realizing the knowledge contained in it? In other words, have they designed incompetence into it?

Let's say a worker discovers a flaw that, if uncorrected, will cost the company millions of dollars in recalls, and company implements the recommended "fix" that costs them a few thousands before the problem ever manifests itself. Do you think that the worker will be properly compensated? If you actually think so, you are dreaming.

The problem is that too many people are making critical decisions in companies today with your level of misconceptions and incompetence.

@bfg4987 $40 thousand a year is hardly Dom Perignon for breakfast. Give us your estimation of what his salary should have been. A number.

This is what the people whose boots you lick want you to believe.

I could do everything my uncle ever did for GM better in under three months of training. He brags about the number of times he skipped off work and went fishing or something while someone else clocked him in. He's 55, retired, and will never have to work another day in his life, because he's living off his disgusting pension.

You might not like it, but unskilled labor isn't worth anything anymore. Why do you think the auto companies are trying so hard to get as much production out of the union states as possible(Not to mention, out of the country)? Because jobs that every person in the universe is capable of doing should be compensated accordingly.

The days of earning $40 grand a year for tightening bolts are over. You have to be worth money to get paid money.

tmarie Companies are not using dispatching companies because the unions are keeping incompetent non-Japanese workers in part- time jobs - they are doing this because it's a hell of a lot cheaper. Piddling spats with eikawa teachers who were treated as tourists anyway are a little-watched sideshow. Your vision of union power sounds like the UK of the seventies. These unions are not holding companies to ransom anymore and the use of dispatch workers ( many of whom are also lazy and incompetent ) isn't because they've been forced into an unfortunate but necessary escape route by snarling union hounds, it's a question of cost-cutting. On the whole, unions are seen as a minor irritation nowadays. As for your question of why I mentioned your omission of any comments blaming companies, wouldn't you think comments on a topic dealing with companies laying off workers would at least mention the policies of companies who lay people off?Perhaps that's just me.

This is a lot of what's killing the auto industry in America: Unions making companies pay way too much for workers who aren't worth anywhere near what they're being paid.

This is what the people whose boots you lick want you to believe.

However, I have seen first hand in Japan unions battle and win when dealing with incompetent workers - Japanese and foreign. Fighting for such people is my issue. Don't do you your job properly? Are lazy? Unions shouldn't be defending you. I have seen the same thing "back home" be it in the education sector or private sector. Unions now often represent the lazy and incompetent.

This is a lot of what's killing the auto industry in America: Unions making companies pay way too much for workers who aren't worth anywhere near what they're being paid.

Jimizo, I guess you don't know about the pension/health care issue the unions caused for many eikaiwa teachers about eight years ago. I also guess you don't know about many universities hiring dispatching companies because they can't get rid of horrific PT teachers because of the union.

I am all for fighting for the cases you've outlines above but one shouldn't actually need to be in a union to get what they are legally entitled to - and that is the issue with Japan and why in many ways Japan does indeed need unions.

However, I have seen first hand in Japan unions battle and win when dealing with incompetent workers - Japanese and foreign. Fighting for such people is my issue. Don't do you your job properly? Are lazy? Unions shouldn't be defending you. I have seen the same thing "back home" be it in the education sector or private sector. Unions now often represent the lazy and incompetent.

I am not shocked at all that you are a member of a union based on your posts and tone. I have not commented at all on placing blame on companies so have no idea why you would come to the conclusion that I don't also place blame on them. Perhaps stick to what is written?

@tmarie To blame the unions for worsening working conditions is surreal. As I pointed out, trade unions in Japan are famously malleable and have nothing like the confrontational 'us and them' of old style European trade unionism. As a member of a trade union, our members could only dream of the clout you seem to credit them with. As for the eikawa industry, it has generally seen its staff as backpackers passing through and handed out conditions below those of most Japanese workers. I heard one horror story on this site from an eikawa teacher who wasn't paid when his student didn't turn up for a lesson and another from someone who lost a day's pay because of a typhoon. Do you really blame these conditions on the unions as opposed to companies treating their workers the way I was treated when picking apples as a student in the summer? Is this because of lazy full-time workers? It's generally agreed that working conditions are better in countries with strong unions, and to take one example, the worsening working conditions of people really took a stranglehold after the unions were castrated. I'm no militant Trotskyite and I will criticise unions for excesses, but this is plainly not true in the docile Japanese unions and to attempt to blame them is baffling. Maybe you should consider blaming the companies a little more.

In addition, the JP way has advantages that are ignored: 1. JP companies actually train or try to train their workers. When demand picks up the people are ready. I also worked at a US company in Japan and when times are tough they cut to the bone, moral suffers, then when demand picks up there is really noone left to leverage it. They must revamp hiring laterals again and the cycle continues. 2. JP companies are less concerned about the next quarter and do invest for longer term goals. 3. In spite of the IBM matter, I think JP workers trust their managers and show loyalty because they are offered protection. If you work at a US company, you may spend a good part of your day looking for the next job "just in case". This is unproductive. 4. Etc., etc., etc.

This synopsis is quite weak. The reason Japanese companies hire people with irrelevant degrees and train them in-house is because it creates a culture of dependence among these workers. These workers actually believe that it is impossibl for them to change companies, and as they have been discouraged in their education from engaging in studies which entail critical thinking and debate, they accept their companies' terms without question.

Japanese companies do not let go excess or unproductive workers because doing so is legally difficult, as is explained in the article (did you read it?). As for demand, Japanese companies have been waiting for it to pick up since the "bubble" burst. Demand has not returned, and, I daresay, it never will. If Japanese companies were more concerned about quarterly performance, perhaps they would be performing better than they have, rather than focus on a phantom long-term goal which would only be attainable if competition from new, growing economies like China and others in Asia didn't exist.

As for American workers spending a good part of their time "looking for their next job", at least they have that option. If you are a mid-level employee at a Japanese company which goes belly-up, or get fired for something like a personal bankruptcy, you'll likely spend the latter part of your life driving a taxi, as no other Japanese company is likely to touch you if you are over 25.

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I'll grant them they work long hours, but if they were productive they wouldn't need to work ridiculous hours.

No, they stay at work for long hours but they certainly aren't working long hours.

Jimizo, not bizarre at all. Unions have caused a lot of issues for those who do their job well by demanding they tale strike action when companies try and fire the useless, the lazy... I don't think I said "I detest Japanese unions" only. I do however have a great dislike for the general union in Japan that often represents lazy foreigner teachers who should be canned. There is a reason why many schools hire on contracts and dispatch. There is a reason why eikaiwas now have hours just under the FT benefits jobs. That union has certainly screwed up many times defending those who should never be defended, just like many/most unions do. Wasn't it the unions that broke the US car industry a while ago? Ignored what the workers wanted and did as they liked? Unions these days aren't what they used to be when they first started. I dislike that.

Not sure why you put your last half of your post in the same paragraph - hope you don't assume I don't agree with it.

How is that the western banks and securities firms/dealers can cut huge numbers of staff at minute's notice but IBK and Ricoh can't? Are there separate sets of labor laws for these industries?

'Another fine reason why I detest unions. Yes, they help out the abused and those needing help but they also defend the useless, the lazy and the overpaid' What a bizarre statement. You 'detest' something for having good and bad points? Japanese unions are among the most docile of all nowadays and our union members remind me of ribboned toy poodles begging for a choccy drop in negotiations. American Bengoshi hit the nail on the head with the idea that temporary workers will become the norm and that US style hire-and-fire is not the way to go. I fully agree that the seniority system is wasteful, I know from personal experience a manager who basically did sod all after 50 as he coasted towards an early retirement. A restructuring of pay within companies would be a better way forward with pay more linked to performance rather than length of service and a scrapping of meaningless 'manager' titles with it. The prospect of increasing the legions of temporary workers further would be disastrous for Japan.

I agree that seniority based employment systems have inefficiencies. However, "At-Will" employment systems like the US has is NOT the answer. If Abe is successful in pushing through legislation making it easy to fire full-time workers, the end result will essentially be an "At-Will" system for all intents and purposes. That is a nothing more than a gift to employers with no benefit to workers. Japanese people should protest aggressively against it.

This "At-will" system is one of the main reasons why many Americans leave the workforce to go into business for themselves. One has two basic choices when looking at the future, one either goes to work for someone else, or works for one's self. Personally, I prefer not to be a life-long wage-slave, and work as a small part of someone else's machine. Sure, they may pay me to do it, but they pay me as little as they can for what I do, and in return, I do as little as I can do for what they pay me.

Perhaps if the choice of having to actually work hard for one's living were required, one would choose to put that effort into one's own shop, store, or business. We already know that the rate of new business starts is 1/5 in Japan what it is in America, and the unchallenging life of working as a slaryman encourages this situation. In America, small businesses are the backbone of the economy, and the majority of American millionaires are first-generation small business people. Would it be a bad thing for Japanese to do the same thing?

But it is not so, the large Japanese conglomerates, which are increasingly less profitable, control the lion's share of the economy, making the country and the people dependent on them. By providing secure and safe jobs, they have reduced the people's ability to take risks, and to attempt to provide for their own security and safety. As a result, the entire system has become less secure and safe.

And now Japan has become stagnant. The birthrate is declining, the suicide rate is remarkably high, and the prospects for the future are dark. Something is seriously wrong. The world is a competitive place, even plants and insects are required to compete for space, food, reproduction, etc.. By eliminating the requirement to compete for the things we need or want, we will simply be crowded out by those who will. It's already happening.

A common misconception in Japan- time spent at work equals time spent working. I liken most workers in Japan to Government workers. I'll grant them they work long hours, but if they were productive they wouldn't need to work ridiculous hours.

There is sooooooooooooo much dead wood in Japanese companies.

They would risk putting large numbers of mostly middle-aged men near peak earnings out of work just as the administration is trying to lift Japan from two decades of deflation and stagnant growth. The fired IBM workers are also middle aged.

So? If they aren't performing, they shouldn't be getting a pay check regardless of age. The reason why Japan is so damn unproductive is because everyone assumes they have a job for life - the Japanese that is. "We" know better because "we" don't get treated like the locals. Fire those who can't do their jobs and watch the other workers suddenly be able to get their jobs done between 9-5.

Another fine example of why I detest unions. Yes, they help out the abused and those needing help but they also defend the usless, the lazy and the overpaid.

Yep weaken the unions, lower wages and those that complain or dare to stand up can be sacked. Wages go down, company profits go up and the CEO's get obscene bonuses. And when the profits are not high enough you move ofshore and sack your workers. Not the way to go Japan - the social costs far outwiegh the benefits to the chosen few.

But when you are a Japanese company which has been operating in the red for nearly a decade, what do you do? When your staff are unproductive to the point they sit in a separate room and watch tv all day (this happens at M***** bank and other companies) and you can't fire them, what do you do? When the performance you get from your workers generates so little income that you can't offer them raises, let alone hire new staff, what do you do? When your executives are already the lowest-paid of any insdustrialized country, and earn less than many police officers in California, what do you do? When Korea, China, Vietnam, and the rest of Asia have growing GDP's, and your country does not, what do you do? Do you simply continue paying high wages to union workers until the company is bankrupted? What good are union workers if there are no companies left to employ them?

Wow. I can hear the pigeons squawking from all the way over here as the cat leaps into the middle of them. Be very interesting to see how this pans out.

eat the Mango and throw kernels...... easy

They need to stop age discrimination in Japan. The older workers can't get rehired so of course they are going to fight. And, a xenophobic Japan need older workers since their population is decreasing. Same issue for older women if they want to get back in the work force.

Soon will see more activities in AOKIGAHARA

I agree that seniority based employment systems have inefficiencies. However, "At-Will" employment systems like the US has is NOT the answer. If Abe is successful in pushing through legislation making it easy to fire full-time workers, the end result will essentially be an "At-Will" system for all intents and purposes. That is a nothing more than a gift to employers with no benefit to workers. Japanese people should protest aggressively against it.

Additionally, does anyone really believe employers will offer full-time employment to temporary workers if Abe's legislation passes? Employers will use the new laws to replace full-time employees with more temporary workers. Therefore, restrictions and limitations should be placed on the number of temporary workers companies can employ at any given time.

Japanese companies. Are horrible. Service sangyo, it's pathetic

Having worked in a Japanese company before, I agree 100% with Umbrella, never again will I ever work at any company where the management/owners are Japanese. I really hope IBM will win against those "Communist" supporters. Anyone who has worked for a Japanese company knows there are tons of oji-sans with no skills making more than decent salaries. This lifetime employment system causes more problems than it solves. Why so many "35 or younger", "men only", "no foreigners" requirement in job ads in Japan? Because the companies know that if they wrongly chose a candidate they are stuck with him for 30 years, I think Mikitani has a point that this system MUST go. I remember a manager at a company I worked for who just couldn't find a suitable job for one of my co-workers, the guy didn't have any skills that matched any of the work available. In any decent free market economy he would have been fired but in Japan, the manager keep trying to find some work he could (pretend to) do. I fully agree with Sangetsu03 and Umbrella here, Japanese companies should be avoided like the plague.

Is it rare in Japan? I've heard that certain English conversation schools constantly rate/evaluate their instructors and routinely fire the ones with low ratings.

The defunct school "Bilingual" in the 90s did this like clockwork: the lowest rated would get the chop every month! But no one really cared much at the time. I guess it only becomes an issue when it affects middle-aged Japanese men.

IBM Japan is among the Japanese companies to end the old seniority-based promotion system and replace it with the performance-based system used in other developed countries. The old system is terribly inefficient, and unfair to those who work hard, and even to those who don't. Those who work hard don't get any financial reward or promotion for their effort, and those who don't work hard never receive an incentive to improve. In the seniority-based systems, efficiency is low, workers don't have to worry about actually working hard, they simply put in their time, and promotions (with pay increases) come automatically. Getting fired is difficult, so there is little risk to performing poorly, or performing at all. The consequence of this is that the staff have to work longer hours, and more people are required to perform tasks than would otherwise be necessary. Having a large staff which works long hours and generates little means that the payroll must be strethed more thinly, meaning that the average pay for the staff is lower than it would otherwise be. If I compare the personnel at two companies in Japan which I know of, the differences are startling. In the Japanese company, the staff work about ten hours a day, but only get about seven hours of real work done. The other company is and American company, and the staff also work about ten hours a day. The difference is the staff at the American company work hard for their full shift. Both companies have performance evaluations, but the American company will not promote anyone who does not perform. Three bad reviews will result in termination. In the Japanese company performance reviews are meetings where little is discussed or done, only a few "ganbaremashous" are exchanged. There is one final difference, the staff at the American company are paid nearly double what their counterparts are paid at the Japanese company.

I've yet to see any "Labour Reform" anywhere in the world that benefits workers. I've met many bosses and CEO's who stand before a shareholders meeting and say how fantastic they are doing and what record profits they are making and then the next day sit at wage bargaining and claim they must cut costs or they will go under. Japan is rated 134 out of 144 in the ease of sacking workers yet this has not stopped it from rising from the devastation of WW2 to become one of the economic powers of the world. And what is wrong with a job for life if the job is there?

But here is the truth of the matter:

"The IBM case has garnered attention in part because union officials say the company is targeting union members"

Yep weaken the unions, lower wages and those that complain or dare to stand up can be sacked. Wages go down, company profits go up and the CEO's get obscene bonuses. And when the profits are not high enough you move ofshore and sack your workers. Not the way to go Japan - the social costs far outwiegh the benefits to the chosen few.

Moral: Never ever work for a japanese company. You're just a slave.