Date: Sun, 14 Feb 1999 14:38:23 -0600 (CST)
From: (Rich Winkel)
Organization: PACH
Subject: US Porkorations Hit Japanese Workers
Article: 54963
To: undisclosed-recipients:;
Message-ID: <>

/** 213.0 **/
** Topic: US Bosses Hit Japanese Workers **
** Written 12:47 PM Feb 12, 1999 by labornews in **

Salaryman vs. the Yankee Invader: Once-Sure Jobs at Risk as Ailing Japanese Firms Sell to U.S. Ones

By Sandra Sugawara, The International Herald Tribune, Paris, Wednesday 10 February 1999

TOKYO—The ominous warnings are everywhere—in Japanese magazines, best-selling books and popular television shows: The American boss is coming and your life will never be the same. Consider Sara Stanton, Japan's fictional vision of an American boss—aggressive, impersonal and obsessed with profits.

Performance is everything, Ms. Stanton declares in a prime-time television melodrama. The plot: a U.S. company acquires a Japanese bank. Despite years of loyal service, the Japanese employees receive an ultimatum from Ms. Stanton: Bring in new business or risk being fired.

[...] bosses presumably would deliver the message with more finesse. Nevertheless, as ailing Japanese financial companies sell out to American ones and corporate pillars such as Nissan Motors Co. seek foreign investors, these messages are seeping into the once-insulated Japanese workplace.

The defining theme of the Japanese economic system—protecting jobs—is being undercut by global economic forces. Overnight, Japanese employees have been catapulted from a secure world of lifetime jobs and guaranteed raises to a potentially scary, yet for some workers exhilarating, world of mega-bonuses, faster advancements and abrupt firings.

Japanese companies, financially drained after years of sacrificing profits to protect employees, are experimenting with similar changes. But Japanese bosses, conditioned for years to think of employees as family and friends, are trying to phase in employment changes gradually. In contrast, American firms swooping in to take over distressed firms often have no such patience or inclination.

Consider the deal between Citigroup Inc. and Nikko Securities Co., Japan's third-largest brokerage, billed at first as a union of two mighty brokerage firms, as East meets West. But it soon became clear that the real purpose of Citigroup's $1.6 billion investment was to buy Nikko's corporate client list and its star performers. Teetering near financial collapse, Nikko had no choice.

About 400 of Nikko's 8,000 employees made the cut, moving over to the nearby modern, plush offices of Salomon Smith Barney Inc., which is owned by Citigroup. Left behind at the still-struggling Nikko are those involved in selling stocks to individuals and others that Citigroup thought were unlikely to generate new corporate business.

When news of the deal hit us, we became despondent, not being able to cope with the shock, one Nikko worker said. He was not asked to join the new company, Nikko Salomon Smith Barney, and suspects it was partly because his English is weak. Indeed, a source close to Citigroup said that in jobs where employees need to brief foreign clients, English language skills are important.

At Toho Mutual Life Insurance Co., English skills are less critical. Most insurance sales are to Japanese families. So when U.S.-based General Electric Capital Corp. rescued the company last year, Japanese employees hoped their jobs would become more secure. The investment would give the firm a fresh start and perhaps allow employees to gradually rebuild the company.

But the more aggressive GE Capital culture prefers quick to gradual. And GE Capital's urge to move fast was helped by a clever deal it struck, giving it the ability to fire without having to take the blame. GE Capital basically bought Toho's operations, but not its financial problems. Under the agreement, 1,973 Toho Life employees were loaned to a new company, GE Capital Edison Insurance. The contract had a clause allowing GE Capital to cancel the employee contracts and send them back to Toho.

Much to the shock of employees, GE Capital did that to about 180 employees just months after taking over. Since the hollowed-out Toho Life had no jobs to offer them, they were given early retirement payments and sent packing.

Toho people are upset, said Issei Daichi, who has written extensively on the insurance industry. They think if it were a Japanese company, this would not have happened to them.

Merrill Lynch & Co. has tried to attack the cultural issues head on, spending three months training about 2,000 employees from the failed Yamaichi Securities on the Merrill Lynch way. But it is not clear whether Merrill Lynch's efforts to transform Japanese stock salesmen into American-style investment advisers will work. The company acknowledges it is losing more money on its Japanese retail sales effort than expected.