PETALING JAYA: Three electronics factories, two in Penang and a third in Kulim, have initiated cost-cutting measures in response to global economic uncertainties, leading to fears that as many as 1,000 jobs may be on the line.
The management of one of the factories said that it was “stopping some production lines” and reducing output by 30%.
However, it refuted allegations on social media that it was retrenching workers. The management of the other two factories were not available for comment.
The Malaysian Trades Union Congress (MTUC) expressed fears that up to 1,000 jobs could be made redundant by the exercise.
Its Penang chapter secretary, K. Veeriah, said MTUC had received reports that steps were being taken to downsize operations, reduce wages and bonus payments and even initiate periodic shutdowns.
The three multinationals that own the factories are household names in the northern region. Collectively, they employ about 50,000 workers.
Veeriah said among the reasons given for the move were the negative impact of both the US-China trade war and Brexit, as well as the sluggish demand for electronic components.
“We have received many reports that factories are closing down, offering voluntary separation schemes (VSS) or downsizing from the end of this month,” he said.
“However, we believe there is more that we still do not know.
“For a start, any market impact would affect all companies in the electronics sector, not just these three manufacturers,” he said.
The Federation of Malaysian Manufacturers (FMM) said a survey showed that 63% of manufacturers said their exports were not affected by the trade war.
“Only 15% felt the negative impact while 73% did not feel any impact at all,” it said in a statement.
But FMM also warned that the manufacturing sector could see a slowdown in the first half of this year.
“There are concerns over weak demand, higher capital investments, lack of clarity on tax exemptions from the Sales and Services Tax (SST) and the extension of the retirement age.”
Veeriah said MTUC would ask the state government to be “more forthcoming on what is happening in the manufacturing sector”.
“We feel that the state has not been transparent in dealing with the impact of the global economic downturn,” he added.
Penang Deputy Chief Minister Dr P. Ramasamy and InvestPenang, the state’s investment authority, could not be reached for comment.
