***** The New York Times September 9, 2000, Saturday, Late Edition - Final SECTION: Section A; Page 3; Column 1; Foreign Desk HEADLINE: Japan Wonders What Became of Quality Control BYLINE: By HOWARD W. FRENCH DATELINE: TOKYO, Sept. 8
Since a crisis at Firestone over dangerously faulty tires erupted in the United States early last month, shareholders of Bridgestone, the large Japanese tire maker that owns Firestone, have watched in horror as the value of their shares has been sliced in half.
At virtually the same time, Japanese prosecutors raided Mitsubishi Motors twice in a single week over its systematic cover-up of manufacturing defects stretching back 30 years, and public confidence in a once proud automaker quickly evaporated -- as did more than 25 percent of its stock value.
Mitsubishi's president resigned today, and DaimlerChrysler, which had agreed to acquire a huge interest in the company, installed its own executive as chief operating officer and renegotiated a lower price for its stake. The German automaker plans to send more managers to try to improve the quality of Mitsubishi's car and trucks.
Coming so soon on the heels of another quality-control crisis in Japan this summer -- the sickening of nearly 15,000 people by contaminated products sold by the leading dairy producer -- many in this country once credited with perfecting quality control have begun to shake their heads over what they fear may be the most worrisome sign of decline yet in Japan: an end to its sterling reputation in manufacturing after a decade without growth.
Like the latest crises, the Snow Brand milk debacle carried a strong whiff of scandal about it.
After the outbreak of a summer staphylococcus epidemic afflicting consumers of Snow Brand products, an investigation of the company showed that workers had routinely recycled milk returned from stores, falsifying the certificate of freshness that accompanies dairy products.
News of the Snow Brand scandal has inspired a wave of consumer complaints against other food producers, and the press has been filled recently with the unsavory details from the discovery of dead lizards in potato chips to flies in canned juice.
At a recent parliamentary hearing, Deputy Health Minister Yukata Fukushima deplored the spate of defective products, calling it the result of "sloppiness and complacency."
Although they often disagree fundamentally on the details, other commentators have begun drawing much broader conclusions from the decline in product quality controls and safety, saying they reflect profound changes at work in Japan.
The theories about declining standards in industry here range from simple smugness to a lingering managerial inability to negotiate the transition from the dizzying prosperity of the 1980's to the era of downsizing and cost controls in the '90's.
Perhaps most sweeping, though, is the idea, carried in newspaper editorials and discussed seriously by noted economic experts, that Japan's prosperity has destroyed its old work ethic, casting things like the Japanese worker's vaunted attention to detail and dedication to the task into history's dustbin.
A recent column in Yomiuri Shimbun, Japan's largest-circulation daily newspaper, deplored what it called the "disdain for hard work" among young adults. Among other facts, it cited government statistics showing that about half of the country's university graduates prefer temporary jobs and part-time work to full-time employment or graduate studies.
"The first generation of Japanese are those who rebuilt the economy amid the postwar confusion," wrote the columnist, Norio Mochizuki, Yomiuri's business news editor. "The baby boomers are the second generation. The baby boomers' children are the third generation, unwilling to work after graduation and yet strangers to poverty."
This generational theme to the hand-wringing over the recent industrial scandals, and over Japan's economic doldrums generally, has become almost fashionable, and comes in as many varieties as flavors at an ice cream shop.
With much talk of national drift in Japan, government and industry leaders have recently begun a huge drive to promote information technology, with some even saying the goal should be to quickly surpass the United States. But adherents of the generational decline theory scoff at that notion and say it overlooks basic problems with people that must be addressed first.
"For the 30 years that we struggled to rebuild the country, we were blessed with high-quality workmanship and great discipline," said Masao Kamei, 84, the chairman of Sumitomo Electric Industries and a senior adviser to past governments. "If we want to recover, we will have to recover these virtues. Without them, information technology cannot save us."
Far from simply having a problem of workers, Mr. Kamei said, Japanese managers have been made arrogant by success and lost all sense of accountability.
"We had a motto, 'Visit the manufacturing floor often,' " he said. "If this kind of principle is established, the kind of incident that happened at Snow Brand would never have happened."
Other experts dismiss the theory of a generational decline. To them the problem lies in Japan's failed adjustments to its changed circumstances, dating back to the explosion in the value of the yen in 1985.
For these experts, blame for the country's steady decline lies at the feet of the managerial class and the government. Supposed changes in social values or the work ethic are merely excuses.
According to this view, Japanese management put a heavy emphasis on cost controls during the yen's steep rise in the mid-80's, more often cutting corners on the shop floor than paring back increasingly lavish corporate spending.
Then suddenly, during the wildly speculative "bubble" period when land and stock prices soared in the late 80's, management practices became as loose as the period was overly optimistic.
Facing unexpectedly intense economic competition from a revived United States during the last 10 years of drift here, Japan has again turned its focus to cost-cutting, with the worker and the workplace suffering the sharpest cuts.
"The overemphasis of cost reduction over so many other things a firm has to think about is the common thread linking all of these recent crises," said Hiroyuki Itami, a professor of management at Hitotsubashi University in Tokyo.
Mitsubishi, he said, was seeking cost savings by avoiding expensive recalls. Snow Brand was recycling a stale product and passing it off as new. And Bridgestone was trying to revive the Firestone brand and recuperate its investment at the lowest possible cost.
"I have seen so many examples of false cost reductions in quality control circles recently," said Mr. Itami, who is writing a book on Japanese corporate governance. "The end result of this kind of thing is the kind of abuses that no engineer would advocate. This is about a failure of management: a failure to weigh cost and quality considerations in the right perspective."
Yet another view of Japan's recent industrial scandals holds that things were never as good as the country's manufacturing reputation would have had it in the first place. Instead, only now for the first time, given a coincidental spate of product quality crises, consumers are stepping forward in large numbers demanding accountings from companies for a broad range of defective products.
In the past Japanese consumers were patient and accepting. And without a strong consumer movement, companies have been able to get away with things like discriminatory pricing, or quality controls that favor export markets, and handle consumer complaints as individual grievances, ignoring systemic problems with products.
"The fact that people are finding things in their food and complaining doesn't mean that these kinds of problems have suddenly skyrocketed," said Hiroko Mizuhara, secretary general of the Consumer's Union of Japan. "There have been these problems all along. It is just that in the past the companies would replace the products to the individual consumer and put a lid on it.
"The consumer is getting stronger, and now the companies cannot avoid acknowledging these crises. With the help of the media they are being forced to deal with it."
GRAPHIC: Photos: Katsuhiko Kawasoe, president of Mitsubishi Motors, bowed yesterday to Transport Minister Hajime Morita in apology for his company's cover-up of manufacturing defects. Mr. Kawasoe resigned soon afterward. (Agence France-Presse); Employees at a Tokyo supermarket discarding Snow Brand milk in July after bacteria in some of the company's products sickened 15,000 people. (Associated Press) *****
Yoshie