Privatization of Japanese National Railways and Labor Unions

Osamu Yomono
Vice President of Japan Confederation of Railway Workers' Union (JRU)

Nowadays, the capitalism, under the latest form of globalizm, has been creating tremendous number of victims among workers and citizens worldwide. Due to the self-centered behaviors of capital who endlessly pursue profits in the international arena, workers and citizens have been targeted to exploitation and plunder, communities and their cultures been degraded, natural environment been devastated. Those who resist capitalistic violence are labeled as terrorists by capitalism guards lead by George W. Bush, and become subject to military targets and violent oppression. Under these circumstances, how labor unions should face realities in the 21st Century?

 In 1987, the privatization of Japan National railways was implemented. This was coincided with the shift toward globalization in Japanese capitalism. Through various kinds of struggles, we labor unions developed new territories of our actions. I would like to report to you regarding our 15 years of struggles of Japanese railway workers, and further bring up issues regarding how labor union movements are supposed to be in the fight against globalizm.

1. Process toward privatization of Japan National Railways (JNR)

 In 1987, Japan National Railways was privatized, and seven companies and some corporations succeeded their business. First, let me summarize how this privatization was implemented. There were two reasons for the privatization of JNR. The officially stated one was to reconstruct the financial management of JNR that had been failed due to vast amount of debts. The other reason that has not been discussed much was to suppress the labor unions' struggles.

1-1 Management failure of JNR and privatization plan

 JNR used to be a public corporation with independent finance. While management and budgetary plans including capital investment needed decisions made at the national parliament, deficits had to be dealt with by JNR in the form of JNR's own debts. The government of Japan utilized this convenient system for its economic stimulus package in Keynesian way to supplement the national expenditures. Particularly since the latter half of the 1970s, approximately 10 billion- dollar worth of capital investment per year, including the bullet train system constructions, were imposed on JNR.
A number of politicians planned and introduced new railways and stations into their hometowns to attract more votes for their campaigns. There were even those who bought up planned railway sites and sold them back to JNR at higher price, making vast amount of profits. Along with politicians, corporations got together to make profits out of JNR's capital investment, and insinuated in politicians' favor to obtain contracts for railway construction. JNR's financial status had been deteriorated due to the collusion of JNR bureaucrats, politicians, and corporations. The collusive structure of politicians, bureaucrats, and corporations was called 1955 Structure in Japan, and this was an example of it within JNR. This so-called 1955 Structure had been stabilized through the high-growth era in Japan.

 When Japanese economic growth slowed down and vast amount of capital investment continued to be sought as before, the financial status of JNR slumped drastically. JNR had accumulated its deficits since 1964 when the first bullet train went into operation, which had lead to the first deficit. Since the latter half of 1970s, JNR's deficit further inflated and the debts snowballed up to 200 billion dollars. The government's several attempts to rescue JNR's financial deficit turned to be a drop in the ocean. It was inevitable to deal with the vast amount of debts and improve the system that kept creating debts. This was one reason why the privatization of JNR was proposed.

1-2 Suppression on resistant labor unions

 In 1975, Japanese labor unions had a turning point since the World War II. Under the direct effect of the Oil Crisis, Japanese economic growth went into stalemate. Amid the economic crisis inflicted with both economic slump and inflation, wages increased dramatically each year. In the spring of 1975, leaders of large private companies' labor unions changed their positions to restrict their demand of wage hike, due to the strong pressure from the government and corporate management sides. These labor unions expressed voluntarily that they would be cooperative with companies' management side to stabilize Japanese economy.

 In contrast with labor union movements on private sector, in the fall of 1975, workers in state-run companies and public corporation carried out a massive strike to obtain right to strike that had been deprived since 1948. The eight-day strike was a total defeat. It didn't attract any support from workers in private sector and couldn't withdraw any sort of compromise from the government. The nearly 200 million dollar damage claimed by JNR put tremendous burden on the two JNR labor unions.

The ruling parties that had obtained the full support from labor unions in private sector started their careful preparation for weakening the two key resisting JNR labor unions, Japanese National Railway Workers' Union (NRU-"KOKUROU") and National Railway Motivepower Union (NRMU-"DORO").

 Since 1982, media campaign criticizing various practices at JNR workplaces started. Its aim was a thorough isolation of JNR labor unions. The campaign carried propaganda in which excessively strong labor unions and poor working attitudes under them are the causes of JNR's financial crisis.

1-3 Background of JNR's privatization

JNR's privatization in the aim of reviewing the collapsed management and shift of the stance toward labor unions showed the new move of capital from the stalemated conventional mechanism to a new accumulating mechanism of capital.

Mainly during 1960s, capitalism created a circle of mass production and mass consumption based on the increase of productivity, which lead to an unprecedented economic growth. Along with that trend, the labor-management relationship changed. In Japan, there were some fierce strikes over the issue of closing of aged plants and reduction of work forces. Through the defeat of the labor sides, labor unions in private sectors left the solution of everyday problems entirely to their management, and focused their activities merely on their increase of wages. On the other hand, companies made it a custom not to fire workers easily, accepting partnership with labor unions and established a close relationship. After all, this was a system in which labor unions in each corporation went under control of corporate orders in Japan.

Proper wage hikes are indispensable for consumption expansion. Also, obtaining cooperation in various measures to increase productivity in exchange of wage hikes was a proper strategy for the accumulating mechanism in those days. However, from the viewpoint of labor unions, that meant that they had been losing regulatory forces on their workplace in exchange of wage hikes.

In case of workers for public sectors, the same kind of process progressed at a slower pace. Promotion of Keyenesian style financial policy expanded the Japanese public sector under the name of public benefits, which was sustained by social economic surplus created during high-growth era. In the public sector whose incentives for profit-seeking was not functioning, workplace management had some deficiency, and nothing-is-wrong policy was prevailed. Particularly, workplace management was drastically deteriorated in JNR, due to the labor unions' strong resistance against the movement to increase productivity. This increase-productivity-movement aimed for suppressing labor unions and for increasing efficiency, and was emerged in the beginning of 1970s. In fact, it had already been prevailed among private sector in 1960s, thus the management side intended to prevail the same in public sector.

JNR labor workers mistook that they had gained unrestrained union activities through their own competence, and not through the freedom on their activities during the moratorium they enjoyed temporarily. Subsequently, due to the defeat of their strikes for the sake of strike right, workers in public sector had to face a bitter reality.

Since the latter half of the 1970s, the conventional accumulating mechanism got into an impasse, and the capitalism shifted its direction seeking for revitalization in multinationalism, and for a new type of capital accumulation through global deprivation. This new kind of mechanism was also accompanied by a shift on attitude of capitalists toward workers into appeasement. In Japan, supported by cooperative response from private companies' labor unions, economic growth based on export had been continued for some period. However, since Plaza Agreement in 1985 when yen's value was drastically boosted, Japan's export oriented economic growth was terminated, and Japanese companies also started treading the pathway toward multinationalism. Thus, the shift toward globalizm became eminent in Japan.

 In the state level, review was started on the public sector whose financial collapse became eminent. Coincidentally, companies drastically changed their attitudes toward labor unions. Companies started to pressure labor unions into compromise with workers' one-sided sacrifice, while they used to nurture labor unions as their partners giving them wage hikes as a carrot. They further promoted their maximum streamlining policy in their production procedure by cutting labor forces, equipment, and finance, calling for downsized management. They pressed labor unions to accept their management policy, and the privatization of JNR was implemented in this period of time.

2. Choices of labor unions and their consequences

 The 1982 conclusion reached by a committee founded by the government that was reviewing the reconstruction of JNR's management was to implement privatization based on the new liberalism. Most of JNR's bureaucrats were against this idea. Politicians who used to gain benefits through the conventional structure also opposed. Accordingly, conflicts were created within government ruling parties and JNR's bureaucrats, which led to twists and turns. However, in 1985, the government reached the final decision toward the privatization. The opposition among JNR's bureaucrats was excluded. It was also a matter of granted that this government bill would pass the national parliament considering the structure of the diet members in those days. The reaction from labor unions were separated into three.

2-1 In case of NRU

Before the privatization, the National Railway Union (NRU,"KOKUROU") used to consist of 70% of total JNR workers. NRU insisted their opposition against privatization, calling for the protection of public services of railways. NRU's opposition was also based on their wish to protect their acquired rights that came from the union members' honest feeling. Yet, they had to depend on the oppositions among JNR and ruling parties who wished to keep their benefits in the conventional interest structure. The defeat of their previous strike for the strike right already showed that there was no chance of winning if they fought against privatization by themselves.

As soon as privatization policy was ensured, contrary to the prediction of NRU leaders, NRU was divided into two factions that continued to pursue the opposition and adapt themselves to privatization with flexibility. The former group that strongly protested against the privatization took over the leadership of NRU in its general assembly of 1986. The defeated faction that pursued changeover of the policy seceded from NRU and transferred to the unification with Japan Railway Workers' Union (JRWU,"JR-RENGOU"). Having been fed up with internal conflicts, many NRU members moved to the other unions or resigned from companies.

There were no strategic perspectives among those who were against privatization in NRU that took over the leadership. Though the privatization had already been in the process of implementation, they continued their resistance out of their sentiment, which generated many dismissed personnel and union members who obtained negative evaluation in the selection standard. As a result, 1000 workers became unemployed.

Consequently, how to deal with the 1000 dismissed workers became a major issue for NRU's movement since then on. In the beginning, NRU demanded that all of the unemployed workers be reemployed to any Japan Railways company as they wished because they were unduly dismissed. However, since 1995, NRU shifted its strategy toward political solution, which was to deal with ruling parties.

These several years, NRU has been tried to solve the issue with so-called Four Party Agreement, in which some of the unemployed workers shall be reemployed at Japan Railways and the government shall pay the reconciliation money. The Four Party Agreement was established among three ruling parties plus Social Democratic Party to solve this issue in a humanitarian viewpoint. Though NRU reached their decision to accept the privatization of JNR and not to accuse JR companies legal responsibility any further at their general assembly, the Agreement was nullified by ruling parties due to the alleged opposition among NRU in the fall of 2002.

 NRU has been spending most of their energy on dealing with the government and also with internal conflicts for 15 years. It further abandoned its original demands one after another as having been wished by the ruling parties. NRU thus stepped up their compromising attitude toward companies and the government. Yet, the nullification of the Four Party Agreement even made this direction tough for NRU to proceed.

2-2 In case of JRWU

Japan Railway Workers Union (JRWU,"TETSUROU") had been opposed to struggles of workers at their workplace and had been advocated collaboration with management side since it was founded. They supported the plan to privatize JNR faster than any other unions and wished to take the leadership of labor unions through the privatization. With this intention in their mind, JRWU merged into a new labor union when JR companies were established. However, they lost their influential power drastically in the new labor union. Their yes-man attitude toward management, explicit system of controlling the union from the top and their extremely militaristic ideology lost their union members' support.

The leaders of former JRWU who had been panicked to see their influence being shrunk, after planning further division of unions several times, took a major role to carry out the division carried out by a part of JR companies in 1991. They attempted to regain their reduced power in the union by cooperating with the management side who tried to thoroughly control the labor unions.

The seceded faction from NRU established Japan Railway Trade Unions Confederation (JRTU) by merging with the divided JRWU. This became a union that represented the will of management side as in most cases in big private companies' labor unions in Japan.

They let management do whatever they wanted to do at their workplaces. Accordingly, in companies where JRTU are the majority in their labor unions, management-side decision was directly reflected, which led to reinforcement of control over workers. Particularly in JR-West Japan, wage and personnel policy based on the merit system was introduced, and controlling of workers through competition was intensified. As a consequence, there are cases of workers' suicide one after another under heavy stress. The number of workers who committed suicide amounted to 10 in only one and a half years.

 In the same JR West, there was an accident where a rescue worker was killed by an express train. He was treating a boy who was hit by another train, while the express train rushed toward the site. This was a result of a management-side attitude that placed the top priority on the train schedule.
In stead of criticizing the managerial attitude, JRTU stood on the side of the management.

2-3 In case of National Railway Motive Power Union (NRMU)

NRMU did not have any theoretically clear recognition, but it sensed a shift of Japanese society in the privatization movement. Thus NRMU tried to find how they should respond to this shift. Since 1985 when the privatization became unavoidable, NRMU transferred their policy toward; 1) Maintenance of railway operation and security of employment and working conditions, 2) Smooth reemployment of unavoidably dismissed workers, 3) Security of activities by independent labor unions.

Compared to private companies, the number of workers in JNR was obviously high. Therefore, JR's new basic policy after the privatization included "productivity as high as private companies." NRMU had predicted labor force reduction could not be avoided by any means. At the same time, it predicted that elderly workers and active union members would be excluded under their selection if the labor reduction had been entrusted to the government or national railway business bureaucrats. So, NRMU conducted negotiations with JNR officials and the government over the issue of labor cut, and took the strategy of clarification of the procedures and standards in advance. The government and JNR bureaucrats who wanted to proceed privatization in a smooth way accepted this NRMU's demand.

Furthermore, NRMU made the management introduce the workers with the reemployment workplaces, and also built a system where workers can retire from their jobs with rewarding conditions. It also established a system where workers can change their jobs and workplaces among different work operations and different regions to solve the unevenness on the job availability. Moreover, NRMU pushed the management to secure the full salary for the workers and provide three years' of occupational training period for job hunting.

After that, NRMU had a talk among union members who would be staying in the same job place, who would be reemployed to another company, and who would change their workplace and work operations. They talked about their age and family background, and decided about the position of each member in accordance with the predicted numbers for each position. NRU laughed at NRMU saying that it was nothing but subordination to JNR, and on the contrary, JRWU entrusted entirely to JNR.

 In 1987 when new privatized JR companies went into operation, the NRMU was dissolved into new labor unions at each company.

3. The struggles in privatized railway companies

 We chose the path to do activities in labor unions under each privatized railway company. We thought that by breaking through the limit which private companies' labor unions were facing, and by overcoming the isolated situation of JNR's labor unions, we can show the way to revitalize Japanese labor unions.

3-1 Challenge toward limits of labor union under each company

Since Japanese labor unions aimed at wage hike as a single purpose, they came to under the influence of corporate orders. In another word, they took the increase of productivity and corporate records as the best way to increase wages, and thus they were all-out cooperative with management side policies.

Leaders of labor unions had close ties with management side. Management side also protected and cooperated with the leaders of labor unions so that they could have stable labor union management.

This kind of labor union stance seemed to be realistic in the high-growth era. However, leaders of labor union under the protection of management side became at a loss when capital imposed sacrifice on their workers and pressed compromise on labor unions during the shift of globalization. Ironically, Japan Trade Union Confederation was established in this impasse for the future perspective.

On restarting as a labor union under a large private company, we JRU (Japan Confederation of Railway Workers' Unions) decided to go through this deadlock of movements.

 On the other hand, in 1995, JRU sought for unconditional talks with NRU who kept its resistance against privatization leaving a number of dismissed workers. We hoped to search for some common ground and have solidarity with them. However, it did not become realized since NRU refused to have a talk. Since then, NRU treaded its path to depend on ruling parties' influence and indulged in the corporate orders themselves.

3-2 Pursuit of safety

The new area of activities started unexpectedly. After the establishment of JR companies, a serious train collision accident occurred, which lead to the voices calling for improvement on safety from management side. However, the safety measures the management side took were to list up workers' small mistakes and violation of rules and punish the workers in front of others. We opposed to this kind of measures.

People make mistakes. It will be impossible to prevent these mistakes by imposing punishment. The important thing is to build up a system where mistakes hardly occur and even if there were mistakes, it would not lead to an accident (fail-safe or fault-tolerant system). To do this, we have to learn from mistakes. However, to avoid punishment, workers try to conceal their mistakes. It will be then impossible to establish a system where we can learn from mistakes so that we can establish a preventive system. Accordingly, a drastic policy change is needed from blaming workers' responsibility to investigating causes and properly responding to an accident.

However, this pursuit for safety theory triggered strong reaction from JR management side. They insisted, "Safety should be considered by management officers and not by labor unions." Because of this conflict, they made JRU divided. Regardless of the management side's attitude, we demanded that causes of accidents should be clarified and measures for preventing recurrence of accident be implemented. At the same time, we consistently criticized the way of companies that thrust responsibility on workers and inflict punishment on them in stead of implementing counter accident measures.

 The pursuit of safety was to achieve a shift from beings who are manipulated as puppets by management people to beings who can work voluntarily for better quality of labor with consciousness. We didn't want to consider our labor as a mere mean of obtaining salary. Rather, we aimed to continue to make our effort to review our work under universal value that goes beyond the safety of railway operation. We have repeatedly negotiated with our management and the government, providing press release for newspaper and TV stations, through which we achieved a lot of improvements.

3-3 Pursuit of peace

While we were pursuing safety at our workplace, we have been doing activities for world peace. Recently, we established an office in Afghanistan where many people were victimized by US-British military attacks in the name of war against terrorism. We have been doing aid activities for people to restore their independent lives through cooperation with some NGOs. Before that, we had built elementary schools in rural part of China, and also extended food supplies to railway workers' children in North Korea.

We didn't carry out these activities solely for helping out people who were in miserable conditions. Through these activities, we encouraged our union members to be liberated from the framework of company ethics, and to see the reality of the world and understand the world through their own eyes and experiences.

What we came to see were devastating influences of globalizm and military actions of super power lead by the US, which crushes rebellious people with forces. In Japan as well, under a strong pressure from the US, wartime mobilization system is being built up legally, which will lead Japan to aggressively take part in helping the oppressors' side against poor people. On the other hand, there are countries that paved a system of an oppressive dictatorship with reinforced army to stand against the capital and military force lead by the US. In these countries, too, people's sufferings are the same with those who are oppressed by the superpower.

 As we have been supporting the people who have been oppressed, we clarified our views to oppose to current wars, oppression, plunders, and exploitation in the world. We also opposed to the participation of Japanese government on the oppressors' side and expressed our thoughts in various forms. We believe that we should further step up our efforts on this issue.

3-4 Fight against those who tend to follow corporate orders

Up till today, our organization has been targeted to be divided for several times. JR management side who reacted strongly against our slogan, "From blaming workers' responsibilities to investigating causes," mobilized the former JRWU to implement massive division of our labor union in 1991. As I mentioned before, these seceded members merged with members from NRU who were generous to the privatization and they establish JRTU .

Management was always behind the scene of these manipulations for dividing our union. Regarding the 1991 division, due to a whistle-blower, a detailed scenario prepared by JR-Tokai management officer was exposed. In other occasions as well, because of various circumstantial evidences, it was obvious that management side had been involved.

>From the view of management side, labor unions must be tremendous obstacles, since labor unions maintain their independent organization at workplace, and check and criticize management from their own perspectives. It is quite natural that the management side does not feel at ease toward unions that outspokenly oppose to the government policy. Therefore, continued efforts are needed for labor unions to stand against the pressure from hostile management and government and to maintain our own independence.

 JRU is now consisted of 75,000 members in all the JR companies, while 73,000 for JRTU and 23,000 for KOKUROU (According to the figure by Health and Labor Ministry in 2002).
 In 2002, Yuji Oda, the president of JRU published a book called, "Declaration of Anti-globalism Labor Union Movement," seeking for a new direction of labor union movement to the society. We are in the midst of our efforts to create a new trend among Japanese labor movements.

4. Conclusion

Currently, Japanese government started its oppression against JRU in a stepped up manner. On November 1, 2002, seven union members were arrested by the police. The seven members were accused of compulsion by merely having criticized and persuaded one member who disturbed the union's solidarity. The arrested seven are still being detained and a lawsuit will start in this coming February.

The government is making propaganda at question and answer session in the Diet, saying, "Extremists have been rooted within JRU," and thus it tries to justify the oppression toward us. This oppression obviously violates the Japanese law that secures workers' right to organize. Now, we are struggling to realize our union members' acquittal and release, through appealing to the people widely and spreading critical public opinion toward the government.

 While JRU was under obvious oppression, not only JRTU("JR-RENGOU"), but also NRU("KOKUROU") have willingly joined in the campaign against JRU. Sharing the same propaganda with the Japanese government and police, they are also chanting that JRU should be excluded from JR labor union. This fact elaborately shows the eventual position they had selected through the privatization of JNR.
 The following are the lessons we have learned throughout the 15 years of struggles before and after the privatization of JNR.

1) The important things for labor unions facing the issue of privatization are: a) To maintain and create public services that are sustainable and socially valuable, b) To sustain regulatory forces of labor unions against management. Therefore, the most important issue for us is, whether we are in private company or in state-run company, how we could stop the influences from globalizm and create useful social services.

2) The foundation of regulatory forces of labor unions lies in the organizational skills of workplaces. Unless workers at their working places do not have intention and power to find problems and face with them, there will be no regulatory forces on management. Workplace activities are the sources of empowerment of labor union activities including negotiations with management and involvement in political issues.

3) Self-centered and narrow-minded sense of values will mislead the path labor unions are supposed to take. Labor unions should grasp the overall influence of globalization on people in the world, and pursue universal values based on society, international relationship, and global environment. The safety of railways and pursuit of peace are major issues along with protection of workers from various kinds of negative impacts stemmed from neo-liberalism.