By Sergey Kadinsky & Joel Schectman
The public has now come out against the American car manufacters saying they have been sluggish in innovating their classic American guzzlers.
But a survey by the Japanese Trade Union Confederation showed more than a third of the nation’s companies have laid off workers or taken other steps to reduce labor costs in the past three months to cope with the global economic crisis. Nearly 40 percent of manufacturers are expected to lay off more temporary workers.
At the same time, much like their American counterparts, Japanese unions continue to defend wage increases, the Japanese Automobile Workers’ Union is demanding at least ¥1,000-a-month as a salary adjustment, while other unions are demanding even more.
Since 1986, Japanese law has made it easier for companies to hire temporary workers, who are largely non-union. Both Japanese trade union confederations, Rengo and UI Zensen, are working to enlist these workers, making substantial gains last year in recruiting part-time and non-regular workers into the union ranks, judging by a 12% increase in 2007.
Among Japanese Auto Workers, membership declined from a peak of 830,000 in 1994; to the 2004 membership of 699,000. Today, JAW is looking for further growth through part-time and temporary autoworkers. Their strategy is clearly forward-looking as major automakers recently announced that they would slash the number of contingent employees due to slow sales.
Toyota reports that its number of full-time workers will fall from 9,200 early this year to 3,000 by the end of next March. Mitsubishi Motors Corp. says it will not renew 1,100 contract staff from now until next March. Mazda Motor Corp. is eliminating 1,300 temporary jobs.

People often cite the $70+ per hour cost of American labor as the reason behind the Big Three’s financial losses, but it should be noted that in Japan, the pensions are paid by the state. As a result, labor costs are much lower for Japanese companies

Even Chris Sands of the conservative Hudson Institute says that a lot of the auto industry’s problems come from having to vest pensions, which often forces them to shift money from working capital. This is a problem not shared by the Japanese auto industry, that has state pension. In the past, American companies would borrow money to pay for this gap, and they’ve always been able to pay it back. But with the markets frozen this year, they didn’t have this option. That’s why they’ve come begging to Congress.