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Ikegai To Cut Salaries, President's Wage Takes A Big Hit.

Ikegai Corp. (Kawasaki, Japan) is facing serious problems now--more than 100 years after its establishment.

As the famous builder sees lower sales and a net loss as inevitable for the year ended March, the management has proposed drastic plans to its union. The managers want to reduce workforce not through firing but through attrition by 131 to 462 by March 2005. This is the main feature of its newest five-year management strategy, which is intended to realize 7.5% in profit margin, or current income on sales.

In the near term, the management plans to resume generating profits in the year ending next March by cutting fixed costs, or more specifically personnel salaries. The union is contemplating the proposed cuts for a one-year period: 10% for the rank-and-file, 13-15% for managers and directors, 18% for board members and 36% for president Shoji Inagawa. There is no chairman.

These measures are intended to realize the profit margin even though sales would be virtually flat, at 17.1-billion yen or $162-million.

For the year ended March 1999, Ikegai suffered 1.2-billion yen in net loss on 16.0-billion yen in sales.

The long-term plans also call for the company to boost annual sales of environmental products to 1-billion yen ($9.5-million) from the current 150-million yen. They include wastewater pipes, plant equipment to process used green-house plastics, and facilities for recycling polyethylene terephthalate (PET) bottles.

One of the oldest M-T builders in Japan, Ikegai's predecessor dates back to a factory in Tokyo which Shotaro Ikegai (1869-1934) opened back in 1889. He was among the major suppliers to the Imperial Navy of Emperor Meiji before and during the Russo-Japanese War of 1904-1905.

From Tokyo via Wordservice International.
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Comment:Ikegai To Cut Salaries, President's Wage Takes A Big Hit.
Publication:Metalworking Insiders' Report
Geographic Code:9JAPA
Date:Apr 15, 2000
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