By Rick Jurgens
©2004 Contra Costa Times
February 9, 2004
Like many employees of big corporations, Kei Sugaoka's frustration and
disillusionment with his employer -- in his case, General Electric Co. -- grew
over the years.
But unlike many other unhappy employees, Sugaoka, a 51-year-old Martinez
resident laid off in 1998 from his job as a senior field engineer, carefully
preserved in his memory and on his computer hard drive a detailed record of
letters he wrote, incidents he observed and events that occurred during his
career.
Hurt and angered by his sacking, Sugaoka set out to make a case against his
former employer. He sifted through a haystack of records accumulated during his
more than two decades at GE. Eventually, he found a needle that would wreak
havoc on one major GE customer, although it would barely scratch GE itself.
Sugaoka acted in late June 2000. He sent Japanese nuclear regulators a copy
of a report on a 1989 reactor inspection and a letter alleging that regulators
had been kept in the dark about a serious maintenance problem found then.
At first, nothing happened. But eventually, Sugaoka's charge triggered a
chain of enforcement actions, economic reactions and public outrage that shook
Japan's largest electric utility and prompted extensive reform in that nation's
nuclear industry.
Sugaoka grew up in Sunol, where his father -- who served in the U.S. Army
during World War II -- raised strawberries. Sugaoka's mother lived in Japan
during the war, not far from Hiroshima, where, in August 1945, the United States
first used the atomic bomb as a weapon. The family's home sat near the cluster
of nuclear facilities in the Tri-Valley area that includes GE's Vallecitos
Nuclear Center south of Pleasanton. Sugaoka's early jobs included work at GE's
small test reactor and at nearby Lawrence Livermore Laboratory.
After graduating from Pleasanton's Amador Valley High School in 1970, Sugaoka
took a few courses at Ohlone and Chabot junior colleges and worked at various
jobs, including some at nuclear sites monitoring employees' radiation exposure.
In 1980, he got a full-time spot on the roster at GE's Vallecitos-based service
unit that sent crews to inspect and repair nuclear reactors around the world.
Sugaoka traveled across America and to Japan, Taiwan, Spain and Italy, often as
the leader of a three-member team that looked for cracks and signs of wear in
reactors.
Sugaoka took to life on the road. "We were mavericks," he says.
"We moved around. Two weeks here, a month here, two months here, all over
the world." A football-sized shaving kit, a gift from his wife, with
"Kei" monogrammed on the side and duct tape reinforcing the seams,
sits in his bathroom as a reminder of those days.
But there were frustrations. Sugaoka still has a copy of a 1995 letter he
sent to former GE Chief Executive Jack Welch protesting what Sugaoka saw as the
harsh and arbitrary firing of two younger Asian-American employees that he had
recruited for GE. A white employee, caught in the same expense account
violation, got a second chance, he says.
Sugaoka also found it hard to advance his career. "They wouldn't let me
advance," he says of the later portion of his career at GE. He recalls
training and supervising young engineers with college degrees, then seeing them
move up the corporate ladder.
Sugaoka's accumulated gripes likely sound familiar to many working Americans,
who have seen corporate jobs that once promised stability, security and
prosperity exposed to a cold world of outsourcing, downsizing, wage cutting and
reductions in health and pension benefits.
Lacking a college degree, and with a low-level management job without
seniority protection, Sugaoka was especially vulnerable to a reversal of fortune
in what he now describes as "the vicious world of corporate politics."
Others tried to warn him. After he wrote his 1995 letter to Welch, Sugaoka
recalls: "A couple of buddies of mine said, 'Kei, they're not going to
forget that.'"
Later, some managers urged him to work out his problems with one boss.
"They were saying, 'You've got to stop the venom.' And I was saying,
'You've got to remember who started it,'" Sugaoka says.
In 1998, Sugaoka's string ran out. He says he found out from supervisors that
they had been ordered not to pick him for upcoming projects. "It bummed me
out to get laid off when I was 46," he says.
Last year, Sugaoka got an e-mail from a GE lawyer that said he was "laid
off due to a reduction in force which was caused by a need to reduce the level
of the work force with your skill set, not due to any other issue." A GE
spokesman confirmed the authenticity of that e-mail.
Sugaoka didn't accept his fate. He launched a challenge to what he calls GE's
"lack of integrity toward my layoff." He filed an unsuccessful
age-discrimination complaint with state regulators. He paid a lawyer $3,500 to
press unsuccessfully to get GE to allow an outside mediator to hear the case.
While Sugaoka made little progress proving his allegations of mistreatment,
he still had some ammunition that was far more explosive: records of a 1989
inspection of a nuclear reactor owned by Tokyo Electric Power Co., Japan's
largest utility. Using an underwater camera, Sugaoka and a co-worker found six
cracks in the reactor's steam dryer, a metal component the size of a small room.
Then, his boss discovered what had caused the cracks: the dryer had been rotated
and incorrectly reinstalled during a previous inspection. "I remember him
looking down and his eyes bulging out, going, 'Oh, man, this thing's 180
(degrees) out.'"
That Sugaoka could reconstruct the event 10 years after the fact didn't
surprise his former co-workers. Sugaoka "always kept wonderful records for
all of his work," says Donald J. Barbee of Pleasanton. "He often said,
'I have everything written down to cover myself if anything happens.'"
What he did directly after the inspection is in dispute. Sugaoka says he told
GE higher-ups about the reversed dryer, but his boss wrote up a report on the
cracks omitting any mention of the installation error. Peter Stack, a GE
spokesman, says Sugaoka didn't do that, despite a GE policy that requires
employees to report such omissions to superiors or through an ombudsman process
that offers anonymity.
In any case, Sugaoka's June 2000 letter caught the attention of Japanese
regulators. "General Electric deliberately failed to note" the
installation problem in its report, he wrote. What Sugaoka knows now but didn't
know when he wrote his letter was that, according to later investigations, GE's
final report to Tokyo Electric Power had disclosed the installation problem.
So, it was the utility that hid the problem from regulators. And it was the
utility that bore the brunt of the regulatory actions and controversy ignited by
Sugaoka.
Sugaoka's letter set in motion company reviews and investigations by
regulators that found that, for years, cracks and maintenance problems in
Japanese reactors had been repeatedly hidden from government overseers. TEPCO
disclosed that it reviewed 14 years of inspections and found 73 instances where
reports to regulators contained errors, omissions or discrepancies between TEPCO
and contractors.
While TEPCO and regulators concluded that the reporting problems did not
directly cause safety hazards, nuclear experts say it was still a serious issue,
since the reports are the source of data used to develop inspection and
maintenance rules for the industry.
On Aug. 29, 2002, the reporting problem burst into public view. Japanese
regulators, GE and TEPCO all issued releases acknowledging widespread reporting
problems. Soon after, five TEPCO executives quit, including the company's
chairman and president. Later, regulators ordered one TEPCO reactor to shut down
after the company disclosed that in the early 1990s its managers had instructed
a contractor to rig a test for leaks in a radiation container. Demands from
local governments and residents prompted TEPCO to voluntarily turn off and
inspect the rest of its nuclear fleet.
The completion of that shutdown, on April 15, 2003, knocked capacity roughly
equal to eight Diablo Canyon nuclear plants off the Japanese grid. While mild
weather erased the threat of rolling blackouts, TEPCO posted operating losses
because of the cost of buying coal, oil and gas to fuel non-nuclear plants.
TEPCO's stock price fell 24 percent in three months.
GE fared better. Its name has barely appeared in U.S. media accounts of
Japan's massive nuclear shutdown. The affair had no adverse impact on General
Electric's nuclear service business in Japan, says Tadashi Matsumura, a company
spokesman. Some employees were fired, according to media reports. Matsumura
would confirm only that the company took disciplinary actions.
GE wasn't even a target of the extensive investigations that followed
Sugaoka's letter, according to Naoki Kajita, director of the nuclear-power
inspection division of Japan's Nuclear Industrial and Safety Agency. "I
appreciate GE's cooperation," he says.
Still, it was Sugaoka, the disgruntled former employee, who started the ball
rolling. "Thanks to the allegations submitted by Mr. Sugaoka, the Japanese
nuclear industry's safety culture has been actually improved," Kajita said.
"I think that's a good consequence" of Sugaoka's action, says Kajita,
who regrets that the controversy has undermined the Japanese public's faith in
the safety of the nuclear industry.
But Kazuhisa Koakutsu, international spokesman for the Citizens Nuclear
Information Center in Tokyo, remains skeptical. While the controversy spurred
some reforms, expanded protection for whistle-blowers wasn't extended to outside
contractors and more flexible maintenance rules weren't adequately reviewed, he
says.
Sugaoka thinks he did some good. After spending a week in Japan in October
doing television interviews and meeting with officials and residents in towns
near reactors, he concluded that the reforms that followed his letter made
companies less secretive and more cooperative toward local governments.
Sugaoka's action hasn't attracted much attention here. After returning from a
yearlong stay in Taiwan, where he worked on a nuclear fuel project, he took a
part-time security job and settled into life in his modest home in a Martinez
cul-de-sac. When his wife leaves early for work at the post office, he
chauffeurs their 11-year-old daughter to school. For fun, he fishes and attends
concerts.
Asked about his plans and aspirations, Sugaoka has to stop and think. "I
wish I could get back in the (nuclear) business and be part of the
watchdog," he says. He would like to work in Japan to help beef up that
country's reactor oversight, he adds.
For now, Sugaoka does his watchdogging on the basketball court, as a referee
for high school and adult league games in Contra Costa County. Racing up and
down the court with players one-third his age, he blows his whistle to call
fouls and traveling violations.
Jane Sugaoka, 79, who still lives in the family home alongside a creek near
downtown Sunol, has read about her son in Japanese magazines and newspapers and
heard from relatives who still live in Japan about the attention he was
receiving. "All Japanese appreciate what he's done," she says proudly.
But Kei Sugaoka's desire for redress from GE still smolders: "I feel
like it's a mission not accomplished, a void I have to fill."