Postwar Industrial Relations and the Origins of Lean
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Postwar Industrial Relations and the Origins of Lean Production in Japan (1945-1973) By John Price B.A., The University of British Columbia, 1986 M.A., The University of British Columbia, 1987 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE STUDIES (Department of History) We accept this thesis as conforming Signature(s) removed to protectto privacythe required standard THE UNIVITY OYBRITISH COLUMBIA 1993 @John Price, 1993 in presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of The University of British Columbia Vancouver, Canada Date ‘(a% .9q DE-6 (2/88) Postwar Industrial Relations and the Origins of Lean Production in Japan (1945-1973) by John Price Abstract This thesis examines the evolution of postwar industrial relations in postwar Japan from 1945 to 1973. It analyzes the impact of postwar industrial relations institutions on the origins and development of “lean production” or, as it is otherwise known, the Toyota production system. It uses three case studies, Mitsui Coal’s Miike mine in Kyushu, Suzuki Motors in Hamamatsu, and Moriguchi City Hall as an empirical basis for analysis and constructs a schema of industrial relations institutions that challenges the conventional “three pillars” interpretation (lifetime employment, seniority-based wages, and enterprise unions). From a historical perspective there were three distinct stages in the evolution of industrial relations. The first, from 1945-1947 was a labour-dominated period during which unions began to develop a distinct factory regime in which they were equal partners with management and could veto layoffs. Employers rejected this regime, however, and led an offensive against the independent union movement. This offensive was relatively successful in weakening labour and overturning the new institutions, but it engendered further antagonism. Thus the 1950s were characterized by instability in labour relations and new institutions had to evolve out of the U workplace. A stable Fordist regime consolidated in the 1960-1973 period. From a comparative perspective and in the context of the development of lean production, the author stresses four institutions: tacit and limited job tenure; a performance-based wage system controlled by management; unions with an enterprise (i.e. market) orientation; and joint consultation. These institutions gave Japanese industrial relations their distinctiveness and also help to explain why lean production developed in Japan. Under the traditional Fordist model, work was broken down into short, repetitive cycles and organized along an assembly line. Employers exerted control by keeping conceptual activities as their mandate and workers were to simply follow instructions. This study found that work itself did not change substantively under lean production but workers participated more in conceptual activities. One of the key reasons for this was that employers in Japan were able to exercise control not only through the division of labour but through the wage system and enterprise unions as well. These mechanisms put discrete limits on the scope of worker innovations. They also limited the benefits workers could expect from the system. Lean produc tion represented a new stage in production, identified as lean, intensified Fordism. ili Contents Abstract • . .11 Contents Tables • . •v11 Figures • . ix Acknowledgement . x Glossary Chapter 1: Introduction . Page 1 I. Issues II. The Ubiquitous Three Pillars ..10 III. History: Critical and Comparative Approaches • .20 Iv. A Specific Comparative Framework .40 V. Case Studies .53 Chapter 2: Testing the Limits: Workers’ Challenge (1945-1948) .Page 58 I. Revolution from the Top • . .58 II. Revolution at the Workplace • . .65 III. Labour’s Achievements • . .81 Iv. Shift in Alignments • . .92 Chapter 3: The Japan-U.S. Business Alliance: Capital Retaliates .Page 108 I. Public Sector Attacked ...109 II. The Employer Offensive ...115 III. The Effects on the Labour Movement ..134 Iv. Anti-Communism and the Korean War 150 iv Chapter 4: Forms and Substance of Labour-Management Relations • .Page 160 I. Nikkeiren and the Managerial Arena • ..163 II. Resurgence of Independent Unionism • . .182 III. SOhyO: Splits and ShuntO .202 Chapter 5: A System Emerges: Tensions, Limits and Challenges ...Page 213 I. Signs and Sources of Conflict .216 II. New Standards in Industrial Relations ...231 III. Miike Challenges Management Rights • . .248 Chapter 6: The Politics of Production in the Automotive Industry: Lean, Intensified Fordism (LIF) Page 258 I. The Suzuki Regime • . .261 II. Lean, Intensified Fordism: Toyota .279 III. Institutional Support for LIF .296 Chapter 7: Miike 1960: The Limits of Coercion ...Page 314 I. Prelude to Confrontation: Production Politics and the Energy crisis ...315 II. Phase One: Isolation and Division ...331 III. Phase Two: Breakaway Union • . .339 IV. Phase Three: Nation-Wide Mobilization .343 V. Phase Four: Summer Showdown .349 VI. Commentary • . .354 Chapter 8: High Speed Growth and Unequal Development Page 357 Uneven Development: Ascent of the Automobile Industry .362 II. Uneven Development: The Decline of Coal .377 III. The Public Sector: Moriguchi City Hall .393 IV. Consolidation of Hegemony .408 v Chapter 9: Conclusion . Page 417 I. Postwar History and Class Conflict .. .428 II. The Workplace Regimes: Case Studies .. .435 III. Japan’s Market Hegemony .. .442 IV. Some Comparative Assessments .. .465 V. Postwar Industrial Relations and Lean, Intensified Fordism .. .470 Bibliography . Page 480 vi Tables Table 2.1: Union Formation, 1945-1948 .82 Table 2.2: Managerial Councils in 1948 .88 Table 3.1: Union Members by Labour Law Jurisdiction ...111 Table 3.2: Private Sector Layoffs • ..122 Table 3.3: Employment Adjustment Standards for Regional Public Sector • ..123 Table 3.4: Contract Coverage, 1948-1950 ..138 Table 3.5: Decline in Unions and Union Membership, 1949-1951 ..139 Table 3.6: National Union Affiliations, 1948-1951 • ..144 Table 3.7: Firings in Private and Public Sector during the Red Purge ..152 Table 4.1: Grievance Committee Functioning in a Representative Sample 170 Table 4.2: Management Councils and Functions from a Representative Sample .171 Table 4.3: National Personnel Authority Reports and Government Implementation, 1949-1955 173 Table 4.4: Organizational Strength of the Miike Local, 1953 .191 Table 4.5: Union Members as Percentage of Employed, 1949-1955 •..211 Table 5.1: Affiliated Membership of Union Centrals, 1954-1959 .217 Table 5.2: Average Monthly Hours Worked, by Industry, 1952-1958 .222 Table 5.3: Wage Gap in Manufacturing, by Size of Workplace, 1950-1958 • .223 Table 5.4: Unions and Members in Medium and Small Industry Organized by SOhyo, 1956-1963 .228 Table 5.5: Bonus Agreements Negotiated by JCU and Major Coal Operators, 1956- 1958 • .232 Table 5.6: Bonuses at Moriguchi Compared to National Civil Service Employees .234 vii Table 5.7: Wage Increases at Suzuki, 1954-1960 . .239 Table 5.8: Bonuses at Suzuki, 1954-1959 . .240 Table 5.9: Forms of Union Organization, 1959 . .244 Table 5.10: Male/Female Wage Gap in Manufacturing, 1948-1958 . .248 Table 5. 11: Stages in Workplace Struggle Movement at Miike, 1954-1959 . .250 Table 7.1: Replacement Coal Supplies by Source ...336 Table 7.2: Nation-wide Mobilization to Support Miike Union . .344 Table 7.3: Söhyo’s Miike Supporters, by Affiliation . .345 Table 8.1: Fixed Assets and Productivity Levels, Suzuki Motors, 1959-1969 .. .364 Table 8.2: Suzuki Plant Expansion, 1960-1971 .. .365 Table 8.3: Employment at Suzuki, 1959-1974 . .366 Table 8.4: Suzuki Motors Wage and Bonus Increases, 1960-1975 . .367 Table 8.5: Japan’s Automobile Production and Exports, 1960-1973 . .373 Table 8.6: Vehicle Production and Employment . .374 Table 8.7: A Japan-U.S. Comparison of Nominal Productivity, 1960-1975 . .375 Table 8.8: Basic Coal Industry Statistics, 1960-1973 . .386 Table 8.9: Personnel Reductions by the 18 Majors . .387 Table 8.10: Urbanization of Moriguchi, 1960-1972 . .394 Table 8.11: Wage Discrepancies by Age, Moriguchi City, 1974 .. .402 Table 8.12: Moriguch City Employees Wage Scale, 1974 . .405 Table 8.13: Wages, Labour Productivity and Labour’s Share . .414 viii Figures Figure 1.1 Fortune Summary of Production Systems . .4 Figure 1.2 Regulation Theory and Fordism . .33 Figure 1.3 State Intervention and Factory Regimes . .38 Figure 1.4 Location of Case Studies . .54 Figure 2.1 Mitsui’s Miike Facilities . .66 Figure 2.2 Miike Union’s Affiliations . .70 Figure 2.3 The Densan Wage Formula . .91 Figure 9.1 Figure 9.1, Comparison of Labour Relations, Japan-U.S./Canada . .465 Figure 9.2 Union Centralization and Level of Bargaining .. .466 Figure 9.3 Unionization Rates and Level of Bargaining . .466 ix Acknowledgements Many people have contributed to this study and I sincerely appreciate the help, kindness and advice offered by so many on both sides of the Pacific. First, to my immediate family, my parents Gwen and Bernie Price, my partner Margaret McGr egor, and my children Tommy and Mae, for having put up with a student so “mature” that retirement may arrive before employment. This work would not have been possible without extensive help from many people in Japan. Among the many I would like to offer special thanks to Harada Yözö, Iribe Shöji, Kamehara Yoshiaki, KatO Toshio, KOno Kazuo, Kubota Takeshi, Kurumi Yoshiaki, Matsui Susumu, MatsuO Kamachi, Michiyama Fusahito, Nishimura Yasunori, Ogawa KeizO, Sanada Noriaki, Sugita Tomoji, Uchiyama Tashiro, Watanabe Akinori, Yamada Shin, and Yamamoto Kikue, all of whom helped me gain a basic understanding of the workplaces studied here.