Japan's baking summer sun is hot enough to melt tar on the roads and inside the Nishijimax factory the thermometer is well above 30 degrees Celsius as Susumu Sugiura welds heavy steel plates, sweat pouring from his wrinkled brow. Next door, his wife Kimiko uses a solder and screwdriver to wire a junction box. The tasks are challenging for most, let alone a couple with a collective age of 145. In other parts of the world, the Sugiuras might be whiling away days like this watching daytime television in a retirement home. Here in Aichi Prefecture in Japan's engineering heartland they are gainfully employed and an example of how shifting demographics are transforming the global workplace. A 45-year veteran of this precision tool-making company, Sugiura, 75, never even considered retiring at 60, which was the national pension age at the time. 'It never really came up,' he says, wiping away sweat from under a baseball cap. 'I just carried on working.' Japan has millions of these fit pensioners. More than 22 per cent of its population is aged 65 or older and the figure set to rise to 40 per cent by mid-century. At the same time, the country is running out of babies: Japanese women now have an average of 1.3 children, well below the level needed to maintain the current population of 127 million. According to the National Institute of Population and Social Security Research, the working population peaked at more than 80 million in the late 1990s and will plummet by 40 per cent to about 49 million in 2050. Because Japan has shunned both mass immigration and workplace feminisation, it offers lessons to the West on how to deal with a problem that looms in many other advanced countries - the mass retirement of baby boomers. 'I believe it's a terrible waste to retire people at 60,' says Tokushi Nishijima, the president of Nishijimax. 'Sixty years ago the average lifespan for a Japanese man was 51, and 53 for women. Now it is 85 for women and 79 for men.' That means well over 36 million Japanese today are over 60, he adds. 'There are plenty of healthy people who want to continue working so why should we force them to quit?' The third generation of his family to run the 86-year-old firm, Nishijima's philosophy has attracted a lot of attention. Two years ago, a delegation of European politicians including German President Christian Wulff paid him a visit. 'Last year, 2.5 million boomers retired in Japan; this year and next year another five million will go,' he points out. 'That's a lot of people who could help this economy.' Nishijimax, a machine tool supplier with a US$44 million annual turnover, employs about 140 people, 25 of whom are over 60. 'Quitting hasn't entered my head and the boss hasn't mentioned it,' says fitter Isamu Matsui, who at 59 would normally be considering retirement. 'As long as I'm healthy and of use I'd like to stay.' Workers such as Matsui and the company's oldest employee, spindle assembler Katsuya Hyodo, who is 77 years old and has been with the firm for six decades, have accumulated years of priceless experience. 'Their experience can be passed on to the younger workers,' says Nishijima Jnr. 'Some of these machines should be in a museum,' he laughs. 'We need old-timers to show how it's done.' Nishijimax isn't the only company tapping its silver resources. Hitachi rehires 70 per cent of its workers after they reach 60 and many other blue-chip giants, including Honda and Toyota, are following suit. The Japanese government is also trying to make it easier for companies to retain older workers. In 2004, the labour ministry began raising the legal retirement age in stages, from 60 to 65 by 2013 while at the same time pushing the age at which workers can receive their state pension back to 65. Critics say measures to keep people working longer are exploitative and are being driven by a looming funding crisis in corporate and state pension plans. 'The government is in trouble because it doesn't know what to do with all these retirees,' says Fumihiro Seguro, editor of Hiroba Union, a journal on labour issues. 'In many cases workers over 60 are hired back to do the same jobs, but on about half to 60 per cent of their previous wages.' Seguro notes that many firms have been forced to scrap lump-sum pension payouts and now pay in instalments. He says the national pension is being paid out as a top-up for the wages of the over 60s - instead of retiring, the worker is re-employed and paid a mix of reduced company pay and state benefits. Nishijimax is coy about what it pays its workers, saying only that wages are decided according to ability - and that the national pension is used to supplement pay. 'It's a constant process of negotiation,' Nishijima says. 'Some abilities decline with age so we move people to other work. 'If they become ill, we tell them to look after their health first. If they want to quit, they can quit - it's entirely up to them.' Nishijimax has adapted its routine to the needs of its older staff. Every employee must undergo an annual health check to help decide who can keep working. Overtime is kept to a minimum. Asako Agata, the canteen's 77-year-old head cook, plans meals on a carefully calibrated nutrition plan - down to the reduced salt in the miso soup. 'My blood pressure is a bit high,' says Hyodo. 'But it's healthier to stay working. I wouldn't know what to do at home.' Will he ever quit? 'It's not something the company can tell you to do. You have to keep listening to your body and decide for yourself.' His colleague Takayoshi Hirao, 76, agrees. 'Once you reach 70, you need to be careful. But the boss has told me he wants me to keep going for another 30 years,' he quips. As she solders, Kimiko Sugiura reflects on what life would be like without her daily trip to this factory. 'I was sick for a while last year and had to stay at home,' she recalls. 'When I came back I was very grateful to be able to work. If I was at home, I'd go senile.'