Wednesday, March 26, 2014

The economy that is Japan

Also (last one, promise) from this week's C&EN, an amusing aside on the need for the Japanese chemical industry to restructure (by Jean-Fran├žois Tremblay): 
The complexity is no greater in Japan than it is elsewhere, Harnick says. But cultural differences play a role. “In Japan, there is a long-standing tradition and business practice where large corporations don’t like to be seen downsizing” or cutting jobs, he notes. 
At Mitsui, for example, no employee will be laid off when the phenol, acetone, and polyurethane facilities cease to operate, Tannowa says. Laying off employees, he explains, is impractical both financially and in terms of the harm it does to labor relations. “It is not wise to conduct such layoffs,” he says. The 200 or so employees affected will be redeployed, and Mitsui will lower its headcount over the coming years through natural attrition. 
I wonder at what point US companies transitioned from "we're closing your division, but transferring you elsewhere" to "see ya later." I don't think we're going back. 

9 comments:

  1. The Japanese example says that management is creative enough to come up with new activities for the employees. By contrast, the US examples says...

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  2. And yet companies in the US whine when people bolt for the door as soon as there's a sign of trouble.

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  3. Japan is supposed to have serious labor shortages due to their disastrous demographics. And since they don't have immigration, companies are scared to lose workers.

    This might sound good for the worker, but the blog I'm reading on Japanese economy mentions that mostly due to these demographics: real wages have fallen by 15% in the last 20 years; deflation has stagnated the economy; energy prices and the phasing out of nuclear power have led to a current account deficit of increasingly large proportions, Abeonomics is a failure as the yen has not inflated as much as hoped and companies have not raised wages to an appreciable level so consumer driven economic growth will likely be a bust, the coming sales tax increase is likely to push the country into a recession, and the pile of more than 200% of GDP debt keeps growing and growing.

    In short, Japan is DOOOOOOOOMMMMMMed!!!!!11!! eleventy. Though I really hope that this economist is wrong.

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    1. DOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOM

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    2. Some people say Japan is actually doing quite well...

      http://www.forbes.com/sites/eamonnfingleton/2013/08/11/now-for-the-truth-the-story-of-japans-lost-decades-is-the-worlds-most-absurd-media-myth/

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    3. The author in that article mentions demographics, but doesn't it take it far enough. Unwritten about is the rapidly equalizing ratio between dependents and workers, and the rapidly shrinking working age population. All while the debt keeps climbing toward 300% of GDP. Sorry, that article was not enough to call off my DOOOOOOOOOOOOOOOOOOOOOOOOOM forecast. Not yet.

      Damn. I wonder whether I should take that job in Japan...

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  4. If you work for a Japanese company, you will likely never be laid off. But you will be randomly moved between work sites with little or no input on the matter, and you will likely living in a dorm while your family remains behind. For mid-level folks, you might get a really small apartment instead. Also, almost everyone is forced to retire at age 60. You receive a lump-sum payout worth a couple year's worth of salary and that is the end of it. On top of that, switching jobs is very difficult. Big companies prefer to only higher 22-year-olds straight out of college and keep them for precisely 38 years.





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  5. Concrete DovetailMarch 27, 2014 at 8:57 AM

    I work for a Japanese company in the States. Our main customers are Toyota and Honda. One thing I often hear is that Japan has an aging population and that their automakers will be shifting more and more manufacturing work to the US, which is good for US Chemical Companies.

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  6. Such claims as Japanese companies never lay off is totally incorrect. J corps may find jobs for laymen, but they have a widespread policy to lay of both researchers and mid management above in their 50s when they get too expensive (ie their salary is too high to pay). Technically it may not be a layoff, as they are not fired in the legal sense, but "reasoned" to leave for other position, smaller companies or governmental jobs. In short: this is BS.

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