Raw Japan

Slices of Japanese business, politics and life

Carmaker to reporters: “Sorry, no water; we’re cutting costs”

February 4, 2009

If only Extreme Cost-Cutting were a sport.

Japan’s Mitsubishi Motors today joined a growing string of automakers pulling out of cash-draining motorsports activities with an exit from the Dakar Rally. It’s part of the company’s attempt to squeeze out any cost savings it can, and it seems no effort is too small for consideration.

RALLYING-DAKAR/

At today’s news conference to announce third-quarter financial results, the master of ceremonies opened with the following remark: “You may have noticed there are no refreshments at your seats today. This is part of our effort to reduce spending.”

Sound silly? Mitsubishi Motors is certainly not alone.

Japanese manufacturers are known for their fanatical cost-cutting ways – low ceilings to reduce air-conditioning bills, turning off the lights during lunch hours and double-sided printing with two pages to a side, to name just a few. These endeavours reach extremes when times are tough, and the anecdotes are endless.

I almost fell off my chair once when an employee at one automaker told me that back in the loss-making days of the 90’s, office workers had access to only two or three lead refills at a time for their mechanical pencils. It was meant to prevent waste. (Not to mention the odd case of internal stationery theft.) Another former worker at the company told me they used to cut erasers in half.

I recently commented to a Toyota Motor official that I was surprised to see that even the electric hand-dryers at one of the company’s office buildings had been turned off as part of its “Emergency Profitability Improvement” initiative. He looked at me with an expression that seemed to say, “Why would you be shocked? Of course we’ve turned them off – we’re trying to save costs!”

One could argue that this sort of attitude is ingrained in the culture of a resource-poor country that struggles to live within its means. But when you talk to top executives at Japanese manufacturers, they reason that at the factory level, they’re measuring costs of components by fractions of a yen. When the going gets tough, it’s only natural for white-collar workers to share the pain. It’s all about team effort, they say.

Saving half an eraser or 100 bottles of Evian might be a token gesture, but token gestures go a long way in Japan. You can be sure that no Japanese CEO would have made the faux pas of flying their corporate jets to go begging for a government bailout.

Photo credit: REUTERS/Ariel Pacheco (ARGENTINA)

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