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Desperate workers fight to rebuild bankrupt businesses AIKAWA, Kanagawa Prefecture-Bankruptcy has brought a heavy silence and a whiff of revolution to the factory floor of Aiko Co. , an auto parts maker located in this nondescript suburban town southwest of Tokyo. Since its sudden closure on Oct.31, most of the 74 workers have occupied the company’s premises, in shifts of two or four, guarding machinery against confiscation by unpaid creditors. The workers aim for nothing less than to rebuild the business. hoji Yatsuyanagi, a 52-year-old engineer who says the loss of his job of three decades has turned him from a meek “sheep” into a radical “wolf,” points to the hulking lathes and industrial presses. “These are all ready to go at the flip of a switch,” he said. But flipping that switch requires significant funding, and appeals for backing have so far fallen on deaf ears. Bank of Yokohama, badly burned as Aiko’s main lender, rebuffed a request for new loans last month. Yatsuyanagi and others are keeping up the pressure on the bank by picketing its branch in Machida, Tokyo, every week. Bank officials declined to comment on their protest. Likewise, Isuzu Motors Ltd., which accounted for up to 70 percent of Aiko’s sales, said it cannot afford to sponsor rehabilitation because of the prolonged slump in truck sales. As joblessness mounts, workers at many failed companies like Aiko have tried to rebuild their firms on their own, but with little success. Experts say it is often easier to start from scratch than try to breathe new life into a moribund business. Ippei Torii, general secretary of Zentoitsu Workers Union, says it is “a very difficult task” for redundant workers to rebuild their firm, though trying to do so tends to be their first impulse. RC Ltd. -which emerged in March from the ashes of commercial-use refrigerator sales firm Reiki Tokyo Hanbai following the collapse of the Reiki Co. group-is a rare success story. With a sharper business focus and an awakened sense of egalitarianism, five of the 19 workers set up shop in the bankrupt entity’s Tokyo headquarters. They transformed operations by focusing on selling directly to retailers, squeezing distributors out of the company’s formerly multilayered sales network. “We used to sell refrigeration units at a loss but now, by selling direct, we make 15 percent profit on each one,” said company President Masahiko Takiguchi, who was sales chief at Reiki Tokyo Hanbai. More importantly, RC is focusing on maintenance services, which yield margins of 50 percent to 70 percent. Management philosophy has changed even more dramatically. Gone are the days of top-down decision-making. Now, business strategy, spending and salaries are decided by staff. Crucial to the revival was the Zentoitsu union, which, like other unions, is increasingly acting as a business consultant for workers whose redundancy has pushed them toward entrepreneurialism. “We handled about five or six such cases per month in 2001, about twice the figure for the previous year,” said Torii. The union, which represents mostly individuals at small and midsize firms, also offers advice on occupying former workplaces. Though their legal basis is unclear, such occupations are generally considered lawful when an enterprise has clearly failed or workers are owed back pay, said a lawyer familiar with bankruptcy cases. As a more realistic approach, however, Torii’s union encourages putting energy into setting up new businesses-it helped to create eight in 2001-rather than into the arduous task of rebuilding a fallen company. That is sound advice, says Minoru Ito, senior researcher at the government-affiliated Japan Institute of Labor. Ito notes that because bankruptcy usually undermines the trust of suppliers and customers, workers are most successful when they break completely from the failed firm. In Tokyo’s Arakawa Ward, another group of middle-aged men are pondering how best to kick-start their working lives. The five former colleagues at 70-year-old faucet maker Yukosha hastily dropped plans to rebuild the business after it went belly up in May. Armed with a 100 million yen enterprise-creation fund provided by their former employer, the men have been entrusted with exploring new business possibilities on behalf of former colleagues. Seeking inspiration, the group has visited small firms set up by other laid-off workers, including a cut-price funeral services company in Shizuoka and a cooking-oil recycling enterprise in Tokyo. After eight months they are still unsure which business area to enter. “We have to do something fast,” said Isao Yoshizawa, leader of the group. “Our unemployment benefits will soon run out.” Desperation is also growing among the Aiko occupiers. “If we don’t get new loans, there is only a 10 percent chance that we can restart,” Yatsuyanagi said. He acknowledges that failure could mean he will never work again. “Job-seekers over 45 are treated as senior citizens,” he said. Asahi Shimbun |