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Wal-Mart Heading to Japan - 2002-03-15


The world's largest retailer is going to Japan and many Japanese workers will receive record-low pay hikes this year. VOA's Amy Bickers in Tokyo has those stories and more in our weekly look at Japanese business headlines.

American retailing giant Wal-Mart and Japanese supermarket chain Seiyu have agreed on a broad relationship that will give Wal-Mart access to the world's second largest economy and a consumer market of more than 126 million people.

Under the deal, Wal-Mart will pay $46 million for a 6-percent stake in Seiyu with an option to increase its holding.

Seiyu President Masao Kiuchi says that the deal will help his struggling firm move forward with a corporate restructuring plan and that now is the time to ally with a stronger company.

Wal-Mart will have some stiff competition in Japan from other foreign firms, including U.S. based Costco and Carrefour of France which entered the market in 1999.

Major Japanese industrial firms are tightening salary increases amid the country's severe economic slump and workers have accepted the move. Following a round of negotiations with employers, labor unionists at Toyota, Honda and other major carmakers approved a management offer to keep pay levels unchanged, except for an increase based on seniority.

That is likely to set a precedent for tens of thousands of other workers in the automobile, steel, electrical and shipbuilding sectors.

It is the first time since the labor unions were established nearly 40 years ago that most companies did not raise salary scales. Instead, of more money, workers are asking for greater job security, a concern for many Japanese as the country's unemployment rate hovers near a record high.

In the technology sector, Mitsubishi Electric and Toshiba have unveiled a plan to jointly develop a third-generation mobile phone system. The move follows other similar alliances, which analysts say reflects the cut-throat environment for mobile phone companies around the world. Many firms have been hurt by weak sales and are teaming up to reduce costs and save time on research and development.

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