Electronics contract manufacturer Jabil Circuit is set to cut its manufacturing capacity in certain regions and close 10 of its facilities worldwide.
It will reportedly retrench 3,000 of its 85,000 workers; 90 per cent of these retrenchments will take place outside the United States.
The company has more than 55 facilities in 22 countries, including sites in Bayan Lepas and Sungai Petani.
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I have audited a few EMSs in Penang before, and safely to say those poorly managed EMS will be hit harder than others. I cannot say which is the company openly, but you can guess it yourself. 🙂
China SunTech, an indigenous solar panel manufacturer is becoming world number one in volume within ten years, while Malaysia is still overdependent on foreign investment for knowhow.
Without holding our own IPs in the niche sectors, Malaysia is forever a cheap labor factory in the low to mid value chains for MNCs.
It is a world wide phenomena. This is also the right time to develop to sling shot into the next up. In the last down in 1987, China took up the boom with High Volume Manufacturing. All the companies that survived and did well in Malaysia were the High Mix Low Volume Manufacturing. After Y2K, Intel made the biggest mistake by focussing purely on speed and did not move to hardware applications on motherboard and CPU. I was laughed at by the GM of Intel Penang, SS G, when I told him the right move was horizontal development, and not… Read more »
When factories are closing, bloggers blame the CM for doing nothing. When developers are doing some building works, golf course and development around the heritage fringes, he is being accused of being business friendly. So the CM is always wrong and bloggers are always right!!!!
Companies will move to the place where they can smell money. When KTK was CM, there were a lot of talk about China + 1. I think LGE should look into that. Afterall, not everyone is so hot about putting everything in China. For multi-nationals, especially EMS with global footprint, re-balancing among plants are normal. Who knows, Penang could benefit from all the closures if we can demonstrate better value add. The closed plant will still have some residual business that needs to go somewhere. Afterall, Tier 1 EMS in Malaysia are multi-billion ringgit companies. Something must be right. As… Read more »
Dear Anil
I’m worried about the incompetent BN regime’s lack of action in tackling the
worsening economy. I hope that PR’s economic experts such as Tony Pua can take a look at what
Takahashi Korekiyo and Hjalmar Schacht did in Japan and Germany during the 1930s Great Depression?
Although both countries were under loathsome fascist regimes, their economic policies seemed to help the two countries to rebound quickly. One can even learn useful things from loathsome regimes (including Stalinist Russia)!
Phua Kai Lit
No need to boycott US goodies already. They aren’t welcome here so they moved out from Malaysia. I think the happiest person to see this event come is MAHATHIR. At the end, who will going to suffer most…..Bumi or Non-bumi. Never mind-lah.
For those who are rich, remember to grab some good properties around the Bayan Lepas area. These highly paid engineer is going to lose their job soon and most of them unlikely to pay housing loan.
Cheers……Rich People.
All politician are same. Next time we vote for Anil to be our CM of Penang.
Malaysia needs to wake up and be more competitive. For starters, we have just too many public holidays…….more holidays than the Arabs in the Middle East. They only have 2 religious holidays, ie First Eid (Hari Raya Puasa) and Second Eid (Hari Raya Haji). Malaysia has more “Chinese” religious holidays than China…
Dear Happy, I would like to say that, yes, there is nothing much (not too much to say, that nothing they can do) our government can do right now when the Corporate HQ of all these MNCs decided what to do next. But with the policy (reduce corporate tax ect) that is in place is not favourable for investor to stay put and pump in more investments, change that. In fact, when I read about all those news from Ministry of Human Resources asking all these MNCs to only retrench workers at the last resort which I would like to… Read more »
Will we see LGE come out and say Jabil Penang won’t be re-trenching and there will be no job loss ? This is just a start, more coming soon. I had predicted Jabil earlier, watch out for (other electronics MNCs). The impact on local SMEs (there are thousands of them in Penang depending on these MNCs) will be even worse. Yet like Nero when Rome burned, LGE is seems to enjoy all these limelight that comes with his CM post and spending most of his time jetting around and playing politics and cheerleading Anwar. DCM2 seems to be more interested… Read more »
The money will go into building low cost houses in places, that no one want. Yes. Money into cronies pocket.
The Federal Government has done Zero to mitigate the impact of the current global economic slowdown on employment in Malaysia. I leave out the reduction in EPF contribution, which is the worker’s money anyway. The Rm 7 Billion stimulus plan has no implementation and have not seen any implementation plans made public. What are they going to stimulate, and where and how are they going to spend the money ? In every constitutuency I have no doubt there are worthwhile projects which would benefit the welfare of the residents, and the expenditure will help pump money into the local economy.… Read more »
Robert Kiyosaki says, “If he is retrenched or out of job, he would go into MLM.”
KM perhaps you have never worked in one of such MNCs … really there is nothing the govt can do when their Board of Directors have decided. I remember when I was working for one back in 1997, even the country managing director of MNC’s Penang operation also do not know of the decision and is simple asked to convey the retrenchment news the following day. his views was not even being sought … the more realistic thing to do is to make this nation more entrepreneurial irregardless of race and to start with is to change the MECD’s mission… Read more »
The worst is yet to come people.
Rakyat is directly impacted by all these retrencement exercises almost every now and then and yet the current federal government isn’t do anything (not enough) to cushion the impact of the people in the streets. Revise/reduce whatever (ie: tariff, taxes and ect)that is possible in helping these companies to cope at least, they can try to hold on a little bit longer rather than just cut their workforce.
Check your source. Good to always check it well ahead of time.