Japan's steel industry is in serious trouble. While it is generally understood to be the?
Japan's steel industry is in serious trouble. While it is generally understood to be the most efficient and modern in the world, the industry is languishing because of a slump in demand. In an effort to cut costs, steel companies have been forced to close down furnaces and retrench workers.
SYNOPSIS: Demand for Japanese steel basically comes from three sources: exports, domestic shipbuilding and the car industry. But steel exports, which accounted for about one-third of supply in 1977, are suffering because of protectionist policies on the U.S.A. and Europe. As in the rest of the world, shipbuilding demand is declining and the Japanese car industry also is experiencing difficulties abroad.
The situation is particularly grave in Kitakyushu, Japan's "steel town" in southern Kyushu. Steel has been made here for over 100 years and such is its dominance that out of a population of one million people, over 700,000 are either directly or indirectly dependent on the industry.
As more and more of Kitakyushu's blast furnaces are closed down so more and more workers become redundant. It is an effect not confined to the factories themselves but to a large section of sub-contractors who rely on steel to support their families. One estimate is that 25 per cent of the 200,000 workers are not necessary.
In Fujisawa, the Isuzu factory workers have been transferred from Kobe Steel in an effort to utilise available manpower. But the car industry itself is suffering serious problems in overseas markets where local manufacturers are pressuring governments to cut the flow of Japanese vehicles. Japanese steel production reached its peak in 1973 at nearly 120 million tons; the same year that OPEC drastically increased oil prices, an event from which neither the world economy nor Japan have yet recovered.