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Tepco minutes reveal staff exodus concerns

Top executives fretted over future as pay cuts caused workers to bolt

by Tsuyoshi Inajima and Yuji Okada

Bloomberg

Tokyo Electric Power Co. executives spent dozens of meetings fretting about the utility’s future as hundreds of younger employees quit over salary cuts after the Fukushima No. 1 reactor meltdowns, according to minutes obtained by Bloomberg News.

“The company could quickly deteriorate” as workers leave at “a rapidly accelerating rate,” an unidentified executive said at an Oct. 4 meeting last year of the government-backed fund designed to bail out Tepco, which faces an estimated ¥11 trillion in cleanup costs from the nuclear crisis.

The comments are in redacted proceedings of 23 meetings of the fund’s steering committee from Oct. 3, 2011, to this April 8, obtained through a freedom of information request.

Almost 1,200 employees voluntarily resigned in the two years that ended in March, Tepco Managing Executive Officer Mamoru Muramatsu said in an April 8 meeting, according to the minutes. Turnover among employees under 30 accounted for about half of all voluntary departures, Tepco President Naomi Hirose said at a Nov. 12 meeting.

“The biggest reason is money,” Hirose said, according to the minutes. “It’s difficult for us to stop them when they say they have loans and have to take care of kids and so on.”

The notes offer the first full view of the committee’s operations and talks among senior officials involved in the utility’s revival following the March 2011 meltdowns at its Fukushima No. 1 plant. The workings of the committee are contained in 227 pages, parts of which mask most attendants’ names and agenda items deemed too sensitive to be made public, according to a letter provided by the Nuclear Damage Liability Facilitation Fund to Bloomberg as part of the request.

The utility cut annual salaries by 25 percent for managers and 20 percent for workers under its turnaround plan released in May last year. The average annual salary of Tepco employees over the three years ending in March 2015 will be reduced to ¥5.9 million, the utility said in a July 25 statement.

Motivation among remaining Tepco employees may flag because of uncertainty about how much of the Fukushima cleanup costs the company will be required to shoulder, three unidentified attendants of the Oct. 4 meeting said, according to the minutes.

Tepco, which has accumulated ¥2.7 trillion in combined losses for the past three fiscal years, had a workforce of 48,757 on a consolidated basis as of March 31, down about 5,300 from the beginning of fiscal 2011, it said in a May 9 statement.

Kansai Electric Power Co. and Chubu Electric Power Co., Japan’s second- and third-biggest utilities by generating capacity, added workers in the two fiscal years to March 31, 2012, according to data compiled by Bloomberg. Kepco’s workforce expanded 2.7 percent to 32,961, while Chubu Electric’s rose 2.3 percent to 29,774.

Tepco had around 3,000 workers at its Fukushima No. 1 plant and 1,300 at its No. 2 plant as of early June, spokeswoman Kaoru Suzuki said, adding that staffing fluctuates depending on operations.

Peak staffing after the disaster started totaled 4,000 at the Fukushima No. 1 complex and 2,250 at the No. 2 power station. Tepco has secured enough workers to continue operations at the two plants for the time being, she said.

Bullet point summaries covering the major topics discussed by the steering committee have been released previously, but not the full minutes.

Members of the state-backed damage liability fund’s steering committee include Central Japan Railway Co. Chairman Yoshiyuki Kasai, former Dowa Holdings Co. Chairman Hirokazu Yoshikawa and Tadashi Maeda, a senior official at the Japan Bank for International Cooperation.

In addition to staffing concerns, discussions related to the size of the Tepco’s cleanup bill for the Fukushima meltdowns arise frequently in the minutes.

Final costs associated with Fukushima are unknown because decontamination projects are at an early stage, meaning the time isn’t right to request additional aid from the government, an unidentified source said during meeting last Nov. 12 of the steering committee, after the utility sought state support.

“The biggest concern is that the company will collapse if we wait until the cost is fixed,” Takashi Shimada, a former senior official at the Ministry of Economy, Trade and Industry who is now an executive officer at Tepco, said in response, according to the minutes.

The government should review the structure under which Tepco must pay all decontamination costs, Shimada said at the time.

Tepco had paid ¥2.21 trillion in compensation by late April, it said in an April 30 statement. The utility asked the government’s bailout fund to increase compensation aid by ¥666 billion to ¥3.79 trillion on May 31 after revising for a fourth time its estimate on compensation payments to those affected by the disaster.

The March 11, 2011, quake and tsunami shattered the Fukushima No. 1 plant, causing three of its reactors to suffer core meltdowns, forcing around 160,000 people to evacuate the ensuing radioactive fallout and leaving some areas uninhabitable for decades. The catastrophe also led to the eventual halt of all the nation’s nuclear reactors, only two of which have been restarted, effectively shutting down a critical energy source that once supplied more than a quarter of Japan’s electricity.

More than ¥10 trillion will be needed to pay compensation to those affected by the nuclear crisis and to clean up areas contaminated by radioactive substances from the Fukushima No. 1 plant, Tepco estimated Nov. 7 in a two-year business plan. Decommissioning the smashed reactors of the Fukushima No. 1 facility may “far exceed” the ¥1 trillion allocated by Tepco, it said at the time.

The government should “promptly consider establishing a new support framework to handle the huge amount of financial risk that exceeds the limit under the Nuclear Damage Liability Facilitation Fund Law and the cost of decommissioning of the reactors,” Tepco said at the time.

Asimo kin to probe plant

Kyodo

Tokyo Electric Power Co. said Monday it will conduct a probe at its crippled Fukushima No. 1 nuclear plant with a remote-controlled robot that uses technology originally developed for Honda Motor Co.’s Asimo humanoid robot.

The new robot, jointly developed by Honda and the National Institute of Advanced Industrial Science and Technology, will be sent into the reactor 2 building Tuesday to check the radiation level and condition of high areas on the first floor.

The robot has an arm with 11 joints and it can examine areas as high as 7 meters even in a narrow space using a zoom camera, laser range finder and dosimeter at the tip of the arm.

In developing the robot, Honda said it has applied technologies used for the Asimom, including a system that enables simultaneous control of multiple joints.

The outcome of the probe is expected to be used for the planning of cleaning the radiation-contaminated building. Tepco is also considering using the robot to check the inside of other damaged buildings.

The utility plans to decommission reactors 1 to 4 when the process can be safely accomplished. The work is expected to take decades.