Labor dispute over job cuts

Despite the establishment of Toyota Motor Sales Co., Ltd. in April 1950, the situation, far from improving, deteriorated further. In January of that year, the controlled price of iron and steel was raised by around 30 percent following a similar rise in September of the previous year. As for non-ferrous metals, price controls were abolished on lead, zinc, copper, and other metals in September 1949 and on aluminum in January 1950. Substantial rises in market prices followed.

In contrast to this surge in raw material prices, as previously explained, controlled automobile prices remained unchanged until April of the same year. Toyota Motor Co., Ltd. pressed ahead energetically with its business rationalization strategy, but in the four and a half months from November 16, 1949 to March 31, 1950 (irregular accounting period in accordance with the Business Reconstruction and Adjustment Act), the accounts showed a loss of 76.52 million yen. As the company's business results showed no sign of improvement, the Toyota Motor Co., Ltd. labor union decided that job cuts were inevitable, and was prepared for conflict by the end of March 1950. Thereafter, labor and management negotiations deteriorated into a protracted dispute.

On January 19, 1946, the Toyota Motor Co., Ltd. labor union was formed with the name Toyota Motor Co., Ltd. Koromo Labor Union, and the First Management Council meeting was held on April 7 of the same year. The Management Council, a discussion body consisting of labor and management, provided a forum for exchange of opinions on principal working conditions as well as production plans, management structures, and other subjects. On July 25, 1946, it concluded a labor agreement. Later, in March 1948, the All Japan Automobile Workers Union (JAWU), a nationwide industry-based organization, was formed with 94 branches and around 40,000 union members, and the Toyota Motor Co., Ltd. Koromo Labor Union became the Toyota Koromo Branch of the Tokai Regional Section of the JAWU.1

Meanwhile, Nippondenso (now Denso Corporation), which was formed in December 1949, became involved in a labor dispute over job cuts ahead of Toyota Motor Co., Ltd. On March 31, 1950, four months after its establishment, Nippondenso announced business reconstruction proposals including 473 job cuts. At the time, the Nippondenso labor union, like the Toyota Motor Co., Ltd. labor union, belonged to the Tokai Regional Section of JAWU and was known as the Nippondenso Branch.

To support the Nippondenso Branch as it entered dispute, the Toyota Motor Co., Ltd. labor union submitted a notification of dispute action on April 7 and informed the company that it would take dispute action from April 9. The labor union then issued repeated demands for submission of the company's reconstruction proposals, which the company complied with urgently.

At the 8th round of collective bargaining held on April 22, 1950, the company thus presented the following reconstruction proposals:

  1. 1)The company must reduce labor costs. Excluding the Shibaura and Kamata Plants, 1,600 volunteers for retirement will be recruited from among the registered employees of head office (excluding the clinic, consumer cooperative, and social insurance organizations).
  2. 2)Remaining staff will be subject to a 10 percent wage cut.
  3. 3)In addition to the sum indicated in Item 1 of the Retirement Allowance Regulations, voluntary retirees will receive one month's basic wage plus 3,000 yen for unmarried staff, and 5,000 yen for married staff.
  4. 4)The company wishes to close the Shibaura and Kamata Plants, but will reconsider where there is a prospect of independent profitability.
  5. 5)The social insurance union, the consumer cooperative, and the clinic will become separate or independent organizations.
  6. 6)The wage system will be reformed along with a radical redistribution of staff.
  7. 7)Discussions on the reconstruction proposals will take place for three days from April 24. Measures to be taken after the three days will be discussed in the three-day period.

The labor union expressed its unhappiness with the company reconstruction proposals centered on these job cuts. From April 24, discussions on the concrete strategies were held between labor and management. However the negotiations made slow progress, and the dispute continued for another month and a half until the memorandum was signed on June 10.

Table 1-22 summarizes the items discussed from January to August 1950 between the company and the labor union.

Table 1-22. Details of the Agreement between Toyota Motor Co., Ltd. and the Labor Union (1950)

Date
Negotiation Type
Details of Discussions
Jan. 13, 1950
117th Management Council
Calculation and payment of wages, January production volume, personnel organization, silicosis allowances
Feb. 5
118th Management Council
January wages, establishment of sale company
Feb. 12
Labor union meeting
Response concerning establishment of sales company
Feb. 14
119th Management Council
Establishment of sales company, correction of overtime wages and urban cost of living allowances
Feb. 28
120th Management Council
February wages
Mar. 6
121st Management Council
February wages
Mar. 15
122st Management Council
February wages
Mar. 27
123rd Management Council
Wages
Mar. 29
124th Management Council
Wages
Apr. 5
125th Management Council
Wages
Apr. 11
1st collective bargaining
Operation of the collective bargaining, notification of dispute action, March wages, memorandum
Apr. 13
2nd collective bargaining
Operation of the collective bargaining, March wages, notification of dispute action, memorandum, cause of buyback
Apr. 15
3rd collective bargaining
Operation of the collective bargaining, wages, notification of dispute action, memorandum, response of sales department concerning buyback
Apr. 18
4th collective bargaining
Operation of the collective bargaining, notification of dispute action, March wages, cause of buyback, memorandum
Apr. 19
5th collective bargaining
Company reconstruction proposals
Apr. 20
6th collective bargaining
Company reconstruction proposals (sales measures, materials costs measures, electrical equipment plant labor dispute, March wages)
Apr. 21
7th collective bargaining
March wages, Nippondenso labor dispute, company reconstruction proposals
Apr. 22
8th collective bargaining
Company reconstruction proposals (1,600 employees recruited for early retirement, severance pay, 10% wage reduction for retained employees)
Apr. 24
9th collective bargaining
Company reconstruction proposals, Nippondenso labor dispute, company pamphlet addressed to employees, Sanei union workers, company bulletin boards, branch plant collective bargaining
Apr. 25
10th collective bargaining
Company reconstruction proposals (use of sales department capital, 30 million yen loan, sales conditions and sales volumes)
Apr. 26
11th collective bargaining
Company reconstruction proposals (sales conditions, buyers, sales volumes, and relationship between Nissan vehicle price hike and reconstruction proposals
Apr. 28
12th collective bargaining
Company reconstruction proposals (labor union's petition for provisional disposition, use of sale department funds)
May 2
13th collective bargaining
Company reconstruction proposals
May 4
14th collective bargaining
Company reconstruction proposals
May 6
15th collective bargaining
Company reconstruction proposals, March wages
May 8
16th collective bargaining
March wages
May 11
17th collective bargaining
Revision of Retirement Allowance Regulations and provisional severance pay, April wages
May 14
18th collective bargaining
Revision of severance pay provisions and provisional severance pay, April wages, commendation and discipline committee, problem of Sanei union, removal of Tsutomu Mori, recommendation letter (recommendation to resign)
May 18
19th collective bargaining
Revision of severance pay provisions and provisional severance pay, April wages, recommendation letter, allowances to the needy, staple food credit sales guarantee
May 23
20th collective bargaining
Revision of severance pay provisions and provisional severance pay, April wages
May 27
21th collective bargaining
April wages, labor agreement, resignation of president, vice president, and Managing Director Nishimura, Retirement Allowance Regulations
May 30
22th collective bargaining
April wages, Provisional Retirement Allowance Regulations, Employment Regulations
May 31
23th collective bargaining
Provisional Retirement Allowance Regulations, Employment Regulations
Jun. 2
24th collective bargaining
April wages, provisional severance pay
Jun. 4
25th collective bargaining
Speedy resolution (request from company for speedy resolution)
Jun. 5
26th collective bargaining
Speedy resolution
Jun. 6
27th collective bargaining
Speedy resolution
Jun. 7
28th collective bargaining
Speedy resolution
Jun. 8
29th collective bargaining
Speedy resolution
Jun. 10
30th collective bargaining
Execution of memorandum
(31st through 35th collective bargainings omitted)
Jul. 17
36th collective bargaining
Disfellowship
Aug. 16
126th Management Council
Bonuses, management council member qualifications
Note:
After the 125th meeting, the Management Council was suspended and collective bargaining was started.

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