The economic tsunami has reached our shores. Regionally, the numbers look dismal: Singapore is experiencing its worst downturn in post-war years, Korea down over 5 per cent of GDP, Japan exports down 35 per cent, China growth down to 6.8 per cent.
And now Intel is shutting “two existing assembly test facilities in Penang”. The two plants in Penang are among four Intel facilities worldwide that have been targeted for closure in 2009. The closures could shed at least 5,000 jobs globally within the firm, which employs 83,000 worldwide.
The Star, however, reports:
Intel Corp’s corporate affairs manager in Penang Loo Cheng Cheng said the two affected facilities, the PG6 and PG7 plants, where manufacturing takes place, were the company’s older and smaller plants.
“We have a total of six plants in Malaysia running manufacturing, research and development and other services.
“With three plants in Penang and another three in Kulim, Kedah, Intel Corp in Malaysia has about 10,000 employees,” she said.
Loo said the closure of the two plants in Penang would affect over 1,000 of employees but the company would be offering the effected workers comparable job positions in its other Malaysian plants.
“It is safe to say that the company has no plans to lay off any workers for now,” she said.
However, it is still unknown when the two facilities will stop its operations in Penang.
Following the move to close the two plants here, the company’s operations in its Kulim Hi-Tech Park site will assume the role as Intel’s global manufacturing hub.
But Guan Eng is denying that the two plants are closing down; instead he says the company had sought relocation of the two plants to the Kulim Hi-tech Park.
Intel has seen the demand for its processors slow in the last quarter of 2008 as profits plunged by 90 per cent. The firm said it would “consolidate and streamline some older capacity without impacting the deployment of new, leading-edge 45-nanometer and 32-nanometer manufacturing capacity”.
New facilities are being planned for Intel’s new 32-nm chip manufacturing later in 2009, but Penang has not been mentioned in this eWeek.com report:
Right now, those 32-nm processors, code-named Westmere, are being developed at another facility in Oregon, and when those chips are ready for full production, Intel intends to manufacture them at one or more facilities throughout the world. Mulloy said the plants that are being considered for 32-nm production include facilities in Oregon, New Mexico, Arizona, Ireland and Israel.
This clearly shows us the vulnerable and tenuous nature of FDI. The plant closures are proof that even the bluest of blue-chip multinational companies will not hesitate to discard workers the moment their bottom lines are affected. When a global economic recession strikes, jobs are likely to be lost at these MNCs.
Yet, we still do not have a national retrenchment fund to support workers who have lost their jobs. How will the retrenched workers support their families and repay housing loans? “Re-training” schemes are not the solution. The principal beneficiaries are the training institutions, which mushroom when the money is provided but then disappear when it dries up.
It’s time the government moves to strengthen our public sector by investing in key areas such as education, general hospitals, affordable housing, sustainable agriculture, public transport, and renewable energy. These sectors will create more sustainable and meaningful jobs that are unlikely to be lost due to external forces while at the same time providing valuable services for all.