April 26 (Bloomberg) -- Tokyo Electric Power Co. workers agreed to a management proposal to cut their pay by as much as 25 percent out of a sense of responsibility for the world’s worst nuclear disaster since Chernobyl, their union said.
“Most union members didn’t object to a pay cut, considering the situation at the company and the effect on society from the nuclear accident,” Koji Sakata, secretary-general of the Tokyo Electric Power Workers Union, said by telephone today.
The utility known as Tepco is battling radiation leaks at the Fukushima Dai-Ichi power plant north of Tokyo after a March 11 earthquake and tsunami knocked out its cooling systems, causing the biggest atomic accident in 25 years. More than 50,000 households were forced to evacuate and Bank of America Corp.’s Merrill Lynch estimates Tepco may face compensation claims of as much as 11 trillion yen ($135 billion).
“Tepco is facing a situation that no other Japanese company has before,” said Keiichiro Hamaguchi, research director at the Japan Institute for Labor Policy and Training. “In tough financial situations, Japanese companies hold labor-management talks on wages. Companies normally prioritize protecting jobs.”
Tepco shares fell 2.7 percent to 426 yen today in Tokyo. The shares are down 80 percent since the quake and tsunami struck, leaving about 26,000 people dead or missing.
Board members including Chairman Tsunehisa Katsumata and President Masataka Shimizu will take a salary cut of 50 percent, the company said in a statement yesterday.
Tepco, Japan’s largest power company, expects to save about 54 billion yen a year from the reductions, according to the statement.
Managers will have their salaries reduced by 25 percent and workers by 20 percent. Tepco won’t hire new graduates in the next financial year, according to the statement.
Executives will have their pay cut from this month, Tepco spokeswoman Ai Tanaka said by telephone today. Salaries of general employees and managers will be cut from July and bonuses from June, Tanaka said.
Katsumata and Shimizu have said they will resign at an appropriate time. Shimizu told lawmakers again today no decision has been made on a resignation date. He was speaking at a lower house session where Prime Minister Naoto Kan said it’s time to consider setting up a committee to investigate the Fukushima crisis.
Tepco was again criticized by the government for acting too slowly in the early days of the crisis.
“The corporate culture of the company made it difficult for them to make bold decisions,” Goshi Hosono, an advisor to Kan, said yesterday, referring to hesitation by Tepco over flooding reactors with seawater and venting steam to relieve pressure on overheating cores.
Hosono was speaking at the first joint press conference held by Tepco and the Nuclear and Industrial Safety Agency. About 250 journalists attended the briefing, which lasted almost four hours. Hosono answered most of the questions.
Farmers protested outside Tepco headquarters today, demanding compensation for losses and an early return to their land. They parked two trucks carrying cows outside the company’s offices in central Tokyo and carried boxes of vegetables included cabbage and spinach.
About 300 farmers from Fukushima and other prefectures attended the protest and sent a delegation into the offices to meet Tepco officials.
The company said on April 20 it will start compensating residents evacuated from areas around its crippled nuclear power station. The government has said it will support Tepco’s aid efforts.
The utility will begin distributing claim forms and payments will be made as soon as possible, spokesman Tetsuya Terasawa said at a briefing in Tokyo. Initial compensation totaling about 50 billion yen was promised by Tepco last week.
Twenty-five years ago today the No. 4 reactor of Chernobyl exploded, sending a radiation plume across Europe from what is now Ukraine. The meltdown killed at least 31 plant workers and firefighters in three months and forced the evacuation of a quarter of a million people in what was then the Soviet Union.
Ukraine last week failed to raise the $1 billion needed to seal Chernobyl’s reactor with more permanent methods, as budget concerns and the accident at Fukushima caused some governments to balk at further spending.
Fukushima “has created fear of radiation exposure and radioactive contamination not just in Japan, but throughout the world,” the Tokyo-based Citizens’ Nuclear Information Center said in an e-mailed statement to mark the Chernobyl anniversary. “We refuse to allow the earth to be further subjected to radioactive contamination and radiation exposure.”
To contact the editor responsible for this story: Amit Prakash at email@example.com