Pioneer Tells 35 to Retire or Be Fired : Downturn: The electronics firm departs from Japan’s treasured lifetime employment system.

In a sign that Japan’s lifetime employment system is fraying under the pressures of recession, a major electronics manufacturer said Friday that it has told 35 managers to retire early or be fired.

Kazuya Yamamoto, a spokesman for Pioneer Electronic Corp., said the managers were asked to quit before their retirement age of 60. If they refused, they would be fired by the end of this month.

“Some of these older employees used to work very hard,” Yamamoto said. “But there are cases in which they keep on staying and become a problem.”

In trimming staff, major Japanese companies usually have targeted part-timers and women, groups who tend not to be unionized and are generally considered to be excluded from the lifetime employment system. But the continuing domestic slowdown has led to deeper job cuts at Pioneer and, analysts said, could set a major precedent throughout Japanese industry.

The 35 Pioneer managers, all men over age 50, apparently had expected to stay with the company until their 60th birthdays. Instead, they will receive between 12 and 24 months’ severance pay if they accept early retirement, a device commonly used by U.S. managers to eliminate older and highly paid employees.

“Selecting personnel (to be laid off) is common sense from the Western sense. But Japan, which has had years of uninterrupted growth, has not had to deal with the problem,” said Steve Myers, a senior analyst specializing in consumer electronics at Jardine Fleming Securities.

Like other electronics makers, Pioneer has been suffering from plunging sales because of the global recession. The firm’s pretax profit for April through September, 1992, totaled $88 million, a 44% drop compared to the same period the previous year.

Yamamoto said personnel officials selected the 35 men among 1,160 managers on the basis of their productivity. But he said Pioneer planned to help some of the retiring managers find other work and give additional bonuses to their retirement pay.

They were, Yamamoto acknowledged, what Japanese call mado-gawa-zoku, which means “folks by the window”--old, unproductive employees who are kept on the payroll and relegated to seats by the window on the fringes of the workplace.

The folks by the window are common in many Japanese firms because of the nation’s treasured lifetime employment system at major companies.

That system and seniority rule are pillars of Japan’s paternalistic corporate management style, which has often been credited for helping bring about spectacular postwar economic development and a relatively crime-free society. Japan’s unemployment rate stood at 2.3% last November.

The number of companies that laid off more than 30 workers a month in the first 11 months of 1992 reached 313, more than double the total for the same period the previous year, according to the Labor Ministry.

While those companies were all small, many large companies have announced plans to gradually decrease their work forces by attrition and have begun to cut back on hiring.