The Japanese model of labor relations is being put to the test under the economic recession. Lifetime employment and the nenko system, has probably been one of the most typical features of Japanese business culture. Jobs are offered for life, and part-time or temporary employment is restricted. Through a promotion system based on age, years of service and performance, the company gives its employees an incentive to accumulate the know-how and techniques particular to the company, with the effect of improving co-operation within the company. In the past, Japanese companies and their employees were like families: because of the nenko system, once you secured a position with a company, you were most likely to stay there until you retired. In other words, a stable livelihood was thought to be a matter of course.
Perhaps it is ironic then that Toyota, in the current economic climate are set to announce production and pay cuts. Nearly 4,500 staff at its plants in Burnaston, near Derby, and Deeside, Flintshire, are expected to accept a 10% pay cut as the working week is cut. The firm employs 3,900 workers at Burnaston, Derby. It has already cut 200 temporary jobs and opened a voluntary redundancy scheme last week.
Toyota also has a world famous production system that is steeped in the philosophy of the complete elimination of all waste and is in pursuit of the most efficient production method. The 'Just in Time' system aims to make the vehicles ordered by customers in the quickest and most efficient way, in order to deliver the vehicles as quickly as possible. Toyota is one of many manufacturing companies struggling to sell cars and therefore has to cut costs. BBC news article here.