Worker Discontent Grows : Japanese Plants in U.S.--Is the Honeymoon Over?
Annette Bradley is out of work and frustrated, laid off from a consumer electronics company that has moved thousands of jobs from this hardscrabble town in eastern Arkansas to Mexico.
“I don’t know if it was bad management, or bad parts, but I know one thing was they could get cheaper labor in Mexico,” Bradley said. “I feel bad. . . . They’re taking jobs from the U.S. to Mexico because of cheaper labor, and it hurts the states and it hurts the people.
“I know they’re human, they’re out to make a dollar just like the rest of us are, but it’s just that it would have been better if they would have just tried to work a little bit more with us, instead of just ship everything out.”
It sounds like an all-too-common story of American business in the 1980s, but there is a twist--Annette Bradley’s company, Sanyo, is Japanese.
Sanyo, which once employed as many as 2,000 production workers here making microwave ovens and television sets, now has just 190 hourly workers and has all but shut down in Forrest City. Much of the production has been shifted to Tijuana.
This move and others like it by Japanese companies have fostered a growing disillusionment among some of the at least 160,000 Americans working in 600 Japanese-owned plants in this country. Less than a decade after the first wave of Japanese companies moved in earnest to set up shop here, the honeymoon between the Japanese and some of their American blue-collar workers seems to be coming to an end.
American workers are finding that there is no benevolent Japanese industrial monolith. A number of Japanese companies do indeed have plant closings and layoffs; others demand unexpected sacrifices and hard work in return for the job security and the voice in shop-floor decisions that assembly line workers often profess to crave. And while some Japanese companies accept unions and are willing to acquire unionized American factories, U.S. workers who support unions sometimes encounter fierce resistance from Japanese management to any attempt to organize their plants.
Although the ranks of workers unhappy with their Japanese employers may still be relatively small and get little attention, the phenomenon could have important implications as the Japanese continue to expand their presence throughout the American economy.
Disappointment Sets In
“The bloom is off the rose a bit,” said Michael K. Young, a specialist in Japanese law at Columbia University Law School, who has testified in lawsuits brought by American workers against Japanese employers. “It would have been hard not to happen.
“These companies have been around long enough now that disappointment has begun to set in,” Young added. “For some, it’s been a case of inflated expectations of what the Japanese are like.
“I mean work is work, it can only be so (much) fun. You can only dress it up so much.”
All the same, many Americans are quite happy with their Japanese employers. They frequently say they have found both security and a new sense of involvement with their work that was missing in their previous jobs with American companies.
“This is my last job,” said a happy Dottie Everett, who works at Honda’s Marysville, Ohio, auto assembly plant.
Indeed, the allure of working for the Japanese remains strong; everybody wants to be with a winner. Thousands of applicants continue to line up whenever a Japanese plant opening is announced.
Took Pay Cut in New Job
Jim Smith, 31, took a one-third cut in pay to go to work at Diamond-Star Motors, the Bloomington, Ill., joint venture between Mitsubishi and Chrysler that will begin making cars for both firms this fall. Smith left a $15-per-hour job at a John Deere factory in Iowa when he was hired last month for $9.68 per hour at Diamond-Star.
“They were still cutting jobs in the plant (at Deere), and it didn’t look good to me,” Smith said. “I was ready to leave for the security aspect of it. I couldn’t see any real future” at Deere.
Young and other specialists believe, however, that many American workers get their hopes up too high when they are hired by Japanese companies. The workers often believe in stereotypes about Japanese management techniques and employee benefits such as lifetime job security that were never completely true, even in Japan.
“When I first went there, I bought all their propaganda, and I had high hopes,” said a bitter Joel Catalano, who has worked at Nissan’s auto assembly plant in Smyrna, Tenn., for five years, and who complains that Nissan is now pushing its American workers too hard. “I felt good about my job, I looked forward to going to work, I felt it was a company that was going to have a big future, was on the move, with good chances of advancement.
“I consider it nothing but a job and a paycheck now.”
Few Make Promises
What many Americans do not realize is just how diverse Japanese industry is; only about one-third of Japanese employers are believed to offer even an implied guarantee of lifetime job security to their workers in Japan, analysts say, and far fewer seem to make such implicit promises in the United States.
In fact, such Japanese firms as Sanyo, faced with both fierce competition from Third World nations and high production costs in Japan because of the rising value of the yen, have proved willing to shut down or even leave the United States in search of cheap foreign labor. The Mexican-American border region is now filled with Japanese factories that are supplying the American market.
“All of the Japanese consumer electronics companies (with plants in the United States) are being faced with difficult decisions on job security,” noted Darrell Carter, vice president for operations at Sanyo’s Forrest City plant. “They can’t compete with imports from Korea and Taiwan, and so they are setting up feeder plants in Mexico, building parts and products they used to make in the U.S.”
When it took over an import-ravaged television plant from a Sears supplier in late 1976, Sanyo at first seemed like a lifesaver to the workers in Forrest City. According to a 1982 study of the plant by the Conference Board, a business research group, Sanyo increased employment from 500 to a peak of 2,400, production soon soared from 500 sets a day to 3,000, and the company added a microwave oven assembly line. Sanyo sought to improve morale by holding family outings such as “company Olympics” and plant-wide holiday dinners. Union officials also say that Sanyo management pledged to avoid the repeated layoffs and recalls that had plagued the work force under its previous American owners.
Asked to Bow and Applaud
But labor relations at the unionized plant soured after a violent 1985 strike, when local police were forced to arrest rock-throwing pickets as well as truckers whose vehicles hit strikers as they forced their way through the picket lines to deliver supplies. Later, workers said they balked when they were asked to bow and applaud for visiting Japanese executives who toured the shop floor, although Sanyo executives said they do not remember such incidents.
“They weren’t paying us enough to do it,” joked Bernice Gardner, another laid-off Sanyo worker. Former workers also maintain that they had no employee involvement programs and little say in shop-floor operations.
“They had a suggestion box, but if there was some kind of employee involvement program, they didn’t tell us about it,” said Barbara Hamilton, who is now laid off from Sanyo. “The only time you would sit down with your foreman, you were with your (union) steward and you were in some kind of trouble.”
Finally, a flood of cheap imports from Korea and Taiwan prompted Sanyo to cut back. It dropped microwave oven production at Forrest City earlier this year, and has moved the production of all but its large television sets to Mexico.
“Everything was peaches and cream for a while, but the Third World imports really cut us to the quick,” conceded Charles Green, a Sanyo executive. “Morale is real low now. All these people are waiting to see who is next.”
25% Unemployment Rate
Hundreds of former Sanyo workers now spend their days at a state-run worker dislocation program in Forrest City, wondering where they will find new jobs in a poverty-stricken area with a 25% unemployment rate.
“You know, you had such high hopes, and then all of a sudden, boom, it seems like everything is gone,” said Bradley, a former microwave line worker who still is looking for a job.
The end came just as suddenly for the 250 workers at a Kyocera International chip capacitor plant in San Diego.
After Japan’s Kyocera bought the plant from an American company in 1980, the workers claim, they were given the impression by Kyocera executives that they would have jobs for life if, in return, they dedicated their “hearts and souls to the company,” said Robert B. Rothman, an attorney representing 131 former Kyocera workers who have filed suit against the company. They were told, Rothman said, that in return for sacrificing for the firm by accepting any job, no matter how menial, they would become permanent members of the Kyocera family.
Yet in August, 1981, only 18 months after acquiring the plant, Kyocera shut down without notice. When the plant’s non-union employees went to work on the day of the closing, they were gathered together in the parking lot, told they were terminated, and then were told they could reapply for new jobs, Rothman said. The plant reopened the next day staffed mainly with new, lower-paid employees, he said.
Allege Broken Promise
The workers’ suit, now before the state Court of Appeal in San Diego, alleges that Kyocera broke its promise to provide lifetime employment. Rothman said he believes that it is the first court case in the nation to test whether the Japanese have oversold their American employees on the potential for job security in their plants.
“These people were taken in,” Rothman said. “They did what they were asked to, some washed floors, because they thought they had lifetime jobs. I think they (Kyocera) very deliberately used that policy (the offer of lifetime employment) to get workers to do what they wanted, and to keep unions out.”
Kyocera officials denied that they ever promised the workers lifetime job security. “A lifetime guarantee is ridiculous; you can’t give a lifetime guarantee, and I’ve never heard anybody here say there were any,” said Grant Bryce, manager of the legal department for Kyocera in San Diego.
Bryce added that Rothman’s account of the plant closing was “roughly speaking, accurate,” but he denied that the plant closed to get rid of the original work force. “It was closed because it was a financial disaster,” he said.
Bryce also stressed that only a few workers were brought in a day after the closing to clean up the plant and that manufacturing did not resume until “some months later,” under a different unit of Kyocera. He said the plant closed again several years later and remains shuttered.
Even at Japanese companies where management would like to bring a new style of labor relations to this country, the speed with which they are moving into American industry may be making it more difficult to promote change, and thus may be leading to disappointment on the shop floor.
Eager to quickly establish a presence here, Japanese firms are increasingly buying existing facilities from American companies, thus often inheriting union contracts and American shop-floor supervisors who are reluctant to change their ways.
In 1986, for example, Japanese firms opened about 100 new plants, but also acquired about 30 existing facilities, according to the Japan Economic Institute, a Washington research group financed by the Japanese Foreign Ministry.
The percentage of Japanese operations in America that are unionized has rapidly increased over the last few years, and now nearly matches the overall rate for U.S. factories. As of 1985, 20.1% of the Japanese manufacturing firms with operations in the United States had unionized shops here, according to a survey of more than 200 Japanese companies by the Japan External Trade Organization, which is affiliated with Japan’s Ministry of Trade and Industry. The unionization rate for American manufacturing overall was 24.7% in 1987, according to the U.S. Bureau of Labor Statistics.
Bridgestone Acquisition
Those figures for the Japanese may have increased, however, as a result of a spate of recent acquisitions of big unionized companies, including the March purchase of Firestone Tire by Japan’s Bridgestone. Firestone, whose production workers are represented by the United Rubber Workers, is now the largest Japanese-owned manufacturing firm in the nation; yet Bridgestone’s Japanese management adopted a hands-off approach in the recent contract talks between Firestone’s American management and the union, according to Bridgestone and Firestone officials. Firestone and the union recently settled after a brief strike.
With so many of their plants now unionized, Japanese attitudes about organized labor in America seem quite varied. Nissan and Honda, for instance, remain strongly opposed to efforts by the United Auto Workers to organize their workers, while Mazda agreed to recognize the union as the bargaining agent for its employees even before it had hired any.
Yet the existence of a relatively strong and active labor movement in America, which the Japanese are increasingly encountering as they plunge more deeply into the economy, has forced changes in labor relations policies at firms that accept unions as well as those that oppose them. Companies with unions here must modify their Japanese work rules to accommodate them, while firms that do not sometimes offer special incentives such as bonuses to keep unions out. In the end, the pressure from unions seems to be Americanizing the Japanese factories at a more rapid pace than might otherwise be the case.
At the same time, most Japanese companies now rely heavily on Americans to run their plants here, further diluting the unique quality of the Japanese-American workplace. Workers at Japanese-owned plants across the nation--including many workers who say they are happy with their jobs--claim that they rarely come into contact with Japanese managers.
‘Convergence Going On’
In fact, one reason some workers may sense that Japanese firms are not so distinctive is that so many American companies have adopted Japanese labor practices, said William Freund, an economics professor at Pace University’s Graduate School of Business in New York, who has done comparative studies of American and Japanese factories. “There is a convergence going on between American and Japanese companies, and I think the differences are narrowing,” Freund said.
Unfortunately, some hourly workers say, Japanese employers sometimes adopt bad American habits. They say their supervisors, virtually all American, are no different from those at non-Japanese factories, and that their managers sometimes let Japanese-style labor programs slide after most of the Japanese executives return home.
At Nissan’s non-union Tennessee plant, for example, which largely has been run by Americans--including many who formerly worked for Detroit auto makers--morning exercises have been all but dropped. Angry workers there also complain that the American managers have pushed for quantity over quality; demanding higher production speeds and lower manning levels. Workers claim that fatigue and injuries among workers--along with lower-quality cars and trucks--are the result.
“You’ve got management that came from up North, where they couldn’t run roughshod over people because labor had a say so,” said Mike Williams, a Nissan assembly line worker. “Now, they’re down here, they got a free rein, they can do anything they want with their labor force, and that’s what they are doing. They are exhausting their labor force. We’ve got one job in our area where you’ve got to use two air guns (pneumatic drills) at once--one in each hand--just to keep up” with the assembly line.
Nissan officials, however, argued that they carefully study assembly line speeds and workloads, and that most workers believe that they can keep up.
Some Disenchantment
“We certainly do have a few people disenchanted with the workload, but for the most part we’re in pretty good shape,” said Gail Neuman, vice president for human resources at the plant.
“I think that historically, some of our managers have found using participative management principles difficult in a union environment,” Neuman said. “Our managers who have come from the U.S. auto industry have found great success here in communicating with our workers without the intervention of a third party.”
Still, worker frustration at Nissan and other Japanese firms does seem to be growing. At Nissan, once a bastion of anti-union sentiment, the United Auto Workers says it now has signed union cards from more than 30% of the work force, enough to call for a federally supervised certification election. The union plans to wait until it has a majority in the plant before it calls for a vote, and Nissan seems prepared to fight.
