Toyoda Sulzer

At the end of 1998, I began having telephone conversations with Mr. Nevins between Kansai and Tokyo. The first time we met was when I went to Tokyo in late January 1999.

Just as I arrived in Japan, the bottom was really falling out of our market, and we were selling only a small fraction of the weaving and other machines we used to sell. Something had to be done.

We needed to do a staff reduction, but wanted it to be a TMT style controlled exercise where only the people we designated had a chance to take the extra severance package. This effort was completely successful and everyone resigned quickly and smoothly. We also needed to cut costs wherever we could. This included the typical things TMT often does such as cutting back over generous overtime rates, holidays, increasing working hours and so on. In addition, we were completely changing our work rules. We wanted them to be more precise in describing our expectations and have clearly defined rules to give the company better legal protection for various potential contingencies. At the same time we were also introducing a new TMT style salary system and changed our pay practices to put more emphasis on each person’s individual performance instead of a fixed bonus system.

At first most employees were surprised and looked disfavorably on these things. Doing things like having to close the company canteen, with bento delivery instead of a more delicious hot meal is never fun.

In the process I learned a few things. If your head office is strongly pushing you to make changes, and is spearheading the program, it helps. If you, as the expat boss, are stepping out mostly on your own, because you know it needs to be done, you can expect your job to be a bit more difficult and less fun. If you are also sending the other expat(s) home to save money it can even be a bit lonely, and less comfortable. Of course we cannot reach the required numbers — sales targets and profits if we do nothing.

In any country, especially in Japan, people can be amazingly resistant to change, especially if everything had always gotten better, and everything was taken for granted. Some of our Japanese managers were very shocked and surprised that the Labor Standards Office allowed us to make the “negative changes” that were supposed to be impossible to do.

Although I did what I had to do, and improved operational efficiencies and our numbers, encouraged and guided by Mr. Nevins, next time I might look forward to learning less and growing less, and instead be dropped into a growing and expanding market.

Rolf Rihs
Director (and country manager)
Toyoda-Sulzer Sales Ltd.
June 2001