By on July 29, 2015

2015-Subaru-Forester

Reuters Investigates has a scathing report on foreign workers in Japan at some of Subaru’s most important suppliers. According to the news agency, due to the combination of a booming “Abenomics”, Japan’s 2010 asylum seeker program, and manufacturers looking for cheap sources of expendable labor, foreigners are taken advantage of and treated as second- and third-class workers. Another program meant to help Chinese citizens learn manufacturing skills in Japan is also implicated in helping Subaru take advantage of marginalized immigrant workers.

Subaru isn’t the only automotive manufacturer named as the same suppliers also feed parts to Honda and Toyota.

The long, detailed report states there are nearly 18,000 foreign residents in Ota, Subaru’s manufacturing home base in Japan, “making it a rare example of multiculturalism in a country stubbornly resistant to immigration” at three times the national average by percentage of population.

However, that immigration isn’t officially of the economic variety as is typically seen between industrialized nations, but of asylum seekers looking for a better life and finding their way into Japan through labor brokers and as indebted trainees. The situation has also been an example of institutionalized racism within Japan.

From Reuters:

In Ota’s auto industry, labor brokers and a manager at a Subaru supplier said ethnicity plays a part in how workers are placed: Japanese workers are at the top of the chain, followed by Brazilians of Japanese descent, who have been in the country longer under a special visa category and can speak the language. They’re followed by South Asians, many of them asylum seekers, and lastly, African workers at the bottom of the pyramid. An executive at one local manufacturer said he favored asylum seekers from Nepal, Sri Lanka, India and Bangladesh, who he said are more willing to take on difficult jobs for lower pay.

“We carefully examined the matter and confirmed that this was not the case,” Subaru said in a written response to questions from Reuters.

The conditions for asylum-seekers-turned-workers in Ota are fueled by Subaru’s popular Forester, Reuters states in the report, running counter to the company’s “Love Promise” to make “a positive impact in the world.” Some workers make as little as minimum wage — $6.60 an hour — before labor brokers take their own cut off the top for housing, utilities and “dispatch fees” for arranging employment.

Many of the employees, typically on short-term contracts, are working illegally while on provisional release from immigration detention centers.

From Reuters:

Asked how people on provisional release were supposed to survive if they were barred from working, Hidetoshi Ogawa, a senior official at the Ministry of Foreign Affairs, said they should rely on support from their relatives, friends and local charities. He said provisional release was a humanitarian measure to avoid long-term detention, “but in truth, these people should leave the country.”

The terms of employment, conditions of work, and treatment of the workers is fully detailed in the report and not what you’d expect from a supposed First World country like Japan.

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61 Comments on “Reuters: Subaru Success Fueled By Marginalized Foreign Workers...”


  • avatar
    CoreyDL

    “Many of the employees, typically on short-term contracts, are working illegally while on provisional release from immigration detention centers.”

    This is why the workers aren’t complaining about it. Being an illegal, they’re happy to have found safe work, even if the pay is garbage.

  • avatar
    FreedMike

    Wow, this is not going to set well up in the Peoples’ Republic of Boulder, where Subaru has about 30% market share.

    My, what will they cart themselves around to Trader Joe’s in now?

    • 0 avatar
      CoreyDL

      I meant to say this too. The crowd who buys Subarus is very nature-friendly, green, and granola-y fair trade. How is this going to sit? Will they bail on the brand and turn to… Mazda?

      Except Mazda lacks AWD options across the line (because they’re dumb).

      Audi? Volvo? Probably Audi.

      • 0 avatar

        Whoever starts Vegan Motors and develops a big engine that also runs off castor bean oil will make a fortune until the next granola fad comes around.

        • 0 avatar
          APaGttH

          The Vegan Motors Clear Conscious seven-passenger SUV will come with heated leather seats – correct?

          That’s very important to me when I’m driving five hours one way into the mountains for a one hour bike ride.

          • 0 avatar
            bball40dtw

            Does Planned Parenthood have leftover stuff they can turn into leather?

            Too far?

          • 0 avatar
            RideHeight

            Don’t mess with my stem cell supply!

            I aim to live long enough to see the Cubs win the World Series.

          • 0 avatar
            Lou_BC

            APaGttH – not heated leather but heated hemp.

          • 0 avatar
            TrailerTrash

            This takes me back…

            I once had a close friend who was a vegan. It was difficult going out to eat with him as everything had to be examined.
            Trouble was…he had leather shoes.
            The leather use, he tried to explain away, was because so many cows were killed regardless of his lifestyle choices the leather would go to waste.
            Do not waste, you see.

            Hmmm….so the Vegan Motors Folk will have no trouble with leather OR the continued purchases of Subies.
            They always find a way to reason themselves out of trouble.

          • 0 avatar
            stuki

            Of course. And it saves almost pop can worth of CO2 on the trip from Boulder to DEN, for the flight to the eco vacation in Bali. Where the highlight is getting to listen Al Gore speak about how he painted the tail of his jet green. To raise awareness.

      • 0 avatar
        RobertRyan

        I wonder if they have Latin American workers from Central America etc, working for peanuts? Oh the irony

    • 0 avatar
      CJinSD

      Will they use their iphones to trend it on twitter?

    • 0 avatar
      brn

      Don’t worry about the tree huggers. They’ll conveniently forget this.

  • avatar
    friedclams

    “Love. It’s what makes a Subaru, a Subaru.”

  • avatar
    friedclams

    I assume Subaru’s assembly plant workers are unionized. So this is true only for supplier employees?

  • avatar
    DeadWeight

    “Gaikokujinrōdōsha Edition Subarus. Now available in Kathy Lee Gifford trim. Exploited labor. It’s what makes a Subaru a Subaru.”

  • avatar
    Steve Biro

    “Exploited labor. It’s what makes a Subaru a Subaru.”

    And what makes a Honda a Honda and a Toyota a Toyota, apparently. I just hope my new Forester doesn’t get vandalized by radical activists.

    • 0 avatar
      dantes_inferno

      > I just hope my new Forester doesn’t get vandalized by radical activists.

      Rumor has it that the Earth Liberation Front (ELF) has turned their attention away from Hummer vehicles and towards Subarus upon reading this blog.

  • avatar
    APaGttH

    And this is different from two-tier wage systems, the use of contract employees versus fulltime employees, exactly…how?

  • avatar
    RideHeight

    Hey! Europe is getting a lot of “asylum seekers”… boatloads, in fact.
    This idea has got legs!

    Why go to the wretched of the earth for cheaper workers (Mexico) when they’ll come to you?

    As always, Japan; One Step Ahead.

    • 0 avatar
      onyxtape

      I remember reading a similar story about BMW. They use boatloads of illegal Turks and North Africans and pay them as low as legally possible. They constitute a significant percentage of their workforce.

      • 0 avatar
        RideHeight

        “They constitute a significant percentage of their workforce.”

        I was just fixin’ to ask about that. Given the likely menial nature of the tasks doable by these people (or that they’re allowed to do), just how important to the manufacturing process and therefore how numerous are they? Enough to tip the balance toward keeping an otherwise high-cost domestic plant open versus offshoring?

  • avatar
    Xeranar

    And another story of how advanced economies exploit the poorer segments of society in the name of shaving a few nickels off production costs. It’s amazing to see major industrialists have no problem exploiting anything under the sun, like witnessing evil personified. But when Germany is trying to figure out how to fuck everybody in the EU to keep a few more Euros in their coffers, America’s now the 2nd largest middle class economy (Canada just passed us and we’re likely to be passed by a few more countries soon), Britain is being run by Conservatives who are attempting to dismantle the remaining commonwealth institutions in the name of Capitalism (and completely missing the point why they exist), and Japan is exploiting workers across the board to fight off the slave system in place in China I have to wonder if we have any hope of reforming it before it all comes crashing down around our feet.

    I try to think positive but I sometimes wonder if we can break the fingers of capitalists before they squeeze humanity to death.

    • 0 avatar
      Dave M.

      “Do you have a job?”
      “Yes”
      “Do you like the conditions of your job?”
      “No”
      “Have you looked for another job?”

      Problem solved.

      • 0 avatar
        Xeranar

        So are you going to admit that you don’t control your own destiny yet or are you still trying to claim that good jobs magically exist because of sheer willpower?

        The whole point of the article was that these groups have found an exploitable workforce and have no problem exploiting them because they did try to find a better job outside of China and were instead foisted into exploitation only slightly better than the other one. Capitalism is built on the idea that everybody can make money with capital but the reality is as settlement creates status quo the people with money continue to have all the money.

        As for CJ, I’m not even going to bother. You’re just too stupid to explain any more to.

    • 0 avatar
      CJinSD

      Don’t worry. When the minimum wage is raised, inflation will no longer be deniable. When inflation is acknowledged, interest rates will go up. When interest rates go up, total tax receipts will no longer cover debt maintenance because of all the unsustainable government spending that started with the New Deal. When the Fed has to print money for debt maintenance and for every penny of government spending, the dollar will collapse. When the dollar collapses as a result of Keynesian economics, “capitalism” will have failed.

  • avatar
    PandaBear

    Sadly you will probably find this anywhere in the world except 3rd world, which instead would exploit their own labor.

    Have you wonder why a lot of the manufacturing is now separated into businesses contracted to another company or nation? Because then you are just a buyer and off the hook for any potential liability or violation.

    Don’t like it? Well, you pretty much have no choice as everyone else in the industry or industries are doing it. Heck, we even do it in the US for 1099 works.

  • avatar
    Mullholland

    Love hurts.

  • avatar
    STRATOS

    Slaves from the Thai fishing industry have found freedom in the Japanese car industry.

  • avatar
    TrailerTrash

    I forgot to ask Alex in his great Subaru Legacy review earlier today IF the car was built in America.
    I understand the suppliers are a big part of the issue here.
    But I was also wondering if some of their cars were built in the USA, Canada or Mexico.
    I suppose, like Mark explains, other Mftr also use the same suppliers. Production outside of Japan must limit this abuse somewhat.

  • avatar

    “Subaru isn’t the only automotive manufacturer named as the same suppliers also feed parts to Honda and Toyota.”

    2nd paragraph, yet only Subaru is in the headline.

  • avatar
    jimbob457

    Something no one mentioned is that Japan is undergoing a demographic collapse. Their population aged 18 to 65 is shrinking year by year.

    One solution discovered and implemented by the US and Canada over a hundred years ago is immigration. Seems even the Japanese are doing it.

    • 0 avatar
      stuki

      +1

      When your options are either “exploting” young Africans who have willingly traveled halfway around the world for the pleasure; or “enslaving” a bunch of octogenarians under threat of withholding their pensions, what’s a poor love peddler to do…

      The only bad taste left by this “expose,” is that laws, as always, do noting more than ensuring some of whatever meager pay the world’s destitutes do manage to get their hands on, go to well connected “labor brokers.”

  • avatar
    shaker

    It is the aim of rich industrialists to make profits and please the shareholders.

    It is the aim of cheap bastards (like me) to pay less for a vehicle, so I can increase investments in my 401(k) plan, in case Social Security (which is constantly under threat from conservatives) is compromised.

    All of this money funnels upwards, but some crumbs fall to the bottom – which, ironically is enough to feed the immigrants who mow the lawns, clean the hotels, care for our elderly and make our multi-function steering wheels.

    We’re all complicit in this game.

    As has been noted, in a capitalist economy where the demographic is shifting older, immigration (and all of its issues) is the only way to keep the house of cards standing.

    In the case of the Japanese, their autonomous robot technology is too nascent to save them from needing immigrants to prop up the aging population.

    (I’m sure this is a simplistic assessment, but I’m to tired to educate myself further on the subject.)

    • 0 avatar
      TW5

      Social Security is under threat from its paranoid recipients. The current rules are far too lenient, and they allow wealthier seniors, including seniors who aren’t even retired, to rip-off Social Security while also maxing out all of their tax-deferred private retirement savings. In essence, SS becomes a giant tax subsidy for trust fund babies. Wall Street benefits because people use SS rather than drawing on their personal retirement savings. Conservatives want to cut benefits to wealthy seniors. Dems want to “cut” Social Security benefits to wealthier Americans by raising the estate tax.

      SS and MED spending need to be reformed, but people imagine a conspiracy is afoot so we continue dismantling middle class investment and borrowing money to fund SS and MED.

      Dismantling the middle class is what harms immigrant labor. Japan hollowed out its middle class long ago, and now the American middle class is committing suicide at the ballot box. It’s not a corporate or consumer conspiracy. It’s a socio-economic catastrophe caused by OECD voters who are relatively wealthy, yet acquire relatively little economics training.

      • 0 avatar
        shaker

        “Conservatives want to cut benefits to wealthy seniors…”

        I’m not well informed, but I’ve seen enough calls for privatizing SS and Medicare from Conservative Republicans (and how poorly it was received by seniors) to think that this new position is entirely a political ploy.

        • 0 avatar
          TW5

          It’s an Australian policy, though Australian employment taxes are higher. Half of the payroll tax (company side) goes to public pensions and the other half goes into a 401k at the employees direction.

          The main problem with the idea is that the US has never shown the courage to reduce SS or MED spending. We can’t increase spending every year and give more private retirement benefits. That’s how we reached our current impasse.

    • 0 avatar
      See 7 up

      One had to wonder if any economy can survive without an exploited class. Never in human history has trade and capitalism flourished long term without one.
      Over time, global markets should eventually bring most to an even playing field. It will be interesting although there are plenty of poor to exploit in the meantime

      • 0 avatar
        TW5

        In capitalist economies, “exploited” workers are the people who voluntarily trade compensation for job opportunity.

        In mercantile monarchies, exploited workers were forced to surrender their productivity to the nobility and monarchy.

        Exploitation in the market isn’t the problem. The problem is that OECD political leaders have found that it’s easier, safer, and more comfortable to leave the bottom quintile in the gutter, especially if they’re willing to take transfer payments in lieu of a robust employment market.

  • avatar
    bullnuke

    What would cause a negative headline about Fuji Heavy Industries (that ignores similar Honda and Toyota transgressions) on the 28th of July, 2015….oh, yeah. Quarterly earnings for Fuji Heavy Industries will be reported on the 31st of July, 2015.

  • avatar
    TW5

    Three arts majors try to write a relevant business article, fail miserably.

    The article is comical. Quotes about car manufacturing come from the mayor of Ota. Japan’s foreign worker training program is criticized by the US and UN, but the article doesn’t say why. They mention that one of the laborers who works as a painter must wear a mask to protect himself from the horrible fumes (okay?). The immigrant workers are paid a min wage as low as $6.60/hr, ($.65 less than US min wage).

    They set out to write a hit piece on Japanese manufacturing, they found nothing, other than a few anecdotal stories of mediocre healthcare and Japanese racism (not specific to Subaru or immigrant worker arrangements). So they tried to pin what little they did find on the Japanese manufacturer most likely to grab headlines in the US.

    I’m ashamed for the authors and Reuters. I hope they enjoyed frolicking in Japan with pre-tax dollars.

    • 0 avatar
      ccode81

      In financial field, many companies are canceling Reuters 3000 xtra terminal, leaving Bloomberg as only information tool.
      Never miss it besides of their help desk who were well educated people from first world. Bloomberg help desk number always connects me to someone named Amit, working on night shift, hardly understand what they are saying.

  • avatar
    See 7 up

    Hey, at least use the money saved to certify a manual equipped forester XT for US sales. I’ll trade in my 2.5i 6mt pronto.
    Or better yet – mazda. Put the 6mt in the awd cx-5.

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