Local auto industry reports stable sales, no massive lay-offs planned

Leilani Chavez, abs-cbnNEWS.com

Posted at Feb 05 2009 04:53 PM | Updated as of Feb 06 2009 01:25 AM

Unlike the semi-conductor and business process outsourcing industries, the local car industry “is not in crisis" and will not undertake massive lay-offs, officials of Chamber of Automotive Manufacturers of the Philippines (CAMPI) said in a press conference Thursday.

This is despite the fact that two Japanese-owned companies that export automotive parts, Yazaki-EMI and Pilipinas Kyohritsu Inc, have laid off some 2,000 casual and contractual Filipino employees from November last year (2008) up to January 8 this year.

These companies are merely suppliers of members of CAMPI, those present at the press conference said. The lay-offs were due to decreasing in orders from client companies abroad.

Unlike their counterparts in other parts of the world, CAMPI president Elizabeth Lee assured the media that the Philippine auto industry is stable despite the global downturn.

Lee said auto sales in the Philippines have gone up by 6 percent (equivalent to 124,000 units) in 2008 from 2007 sales, the highest since the Asian crisis in 1997.  Comparatively, automotive sales fell by 37 percent in the United States.
 
The increase, according to Lee, was due to aggressive efforts in neutralizing illegal vehicle smuggling in the previous year.
 
"From 2004 to 2007, 60 percent of registered vehicles were from second-hand or informal sources. But from January to October 2008, there was a complete turn-around. Sixty-seven percent of the brand new registered vehicles are from formal sources," Lee said.  Informal sources include second-hand car shops and smugglers while formal sources include registered car dealers.
 
Angel Dimalanta, concurrent president of the Supervisory Union and the Auto Industry Workers Alliance, also added that there had been an increase in the sales of smaller and fuel-efficient vehicles because of current crude prices.

All these positive numbers mean that the 74,000 regular employees that CAMPI members currently employ are fairly “safe,” Frank Mero, President of the Philippine Metal Workers Alliance said.

There are no hints to lay-off workers at Toyota Motor Philippines. Dimalanta said that Toyota is even undergoing "right-sizing to regularize employees."
 
Mero said Toyota has regularized around 100 casual employees in the fourth quarter of 2008 alone and will probably hire more this year.

Mitsubishi, on the other hand, will hire additional employees by the third quarter of the year, said Mero.

But CAMPI representatives and union officials also admitted that their members are also adopting measures to cope with the crisis.

For instance Mitsubishi Motors, one of the oldest automotive manufacturers in the country, offered a redundancy program for 88 employees below 50 years old and early retirement for those 50 years old and beyond.

Mitsubishi will provide livelihood programs to affected parties to those affected by its redundancy program. "They will also be getting good compensation," Mero added.

Nissan also announced that they will reduce working days due to the reduced sales. Isuzu and Honda have not made any specific announcements.