About 5,000 workers have been recently laid off in the city of Rayong, Thailand, a regional car-making hub known as the “Detroit of the East”.
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Thailand is particularly vulnerable to the global crash in car sales, having positioned itself as a key production base for foreign automakers including Toyota and Honda, which assemble vehicles for export across the region, an Agence France-Press report said.
Thai auto exports fell 42.11% in December from the same period a year ago while the Federation of Thai Industries (FTI) has forecast that auto exports will fall nearly 25% this year from 2008 to 592,000 vehicles.
Mitsubishi Motors said this month that it would halve production at its Thai plants in the first half of this year after lating off 1,100 temporary workers in January.
If the projections are realised, about 20,000 workers, or 5% of the 400,000 people employed in Thailand’s car factories could lose their jobs in the first six months of 2009, FTI deputy head Adisak Rohitasoon told AFP.
So far, Adisak said, job cuts among permanent staff have been confined to workers in car parts and accessories factories, rather than assembly plants.
“But if auto exports drop even lower… in the first six months, we could see job cuts among permanent workers, though that will be our last resort,” Adisak said.
The government predicts a recovery for the industry from the third quarter of 2009 when it says a fiscal stimulus package will reignite the economy.
Union officials told the news agency around 80% of the workers in eastern Rayong originally came from the poor north and, even for those still in work, the crunch meant that companies were cutting overtime payments that many low-paid workers rely on to get by.
“If their extra work hours are cut many may be forced to resign meaning that by law they cannot ask their employer for any compensation,” Lae Dilokvidhyarat, director of the labour and management department at Bangkok’s Chulalongkorn University, told AFP.
Many casual workers at production plants received no compensation or advance warning before being laid off, Sema Suebtrakul from Organising Labour Union Centre, a car workers’ union, was quoted as saying.
Other permanent workers at car parts factories had been forced to sign documents that falsely showed they had voluntarily resigned, he alleged.
“We are concerned that several companies have just exploited the news of the bad economy to cut costs,” Sema said.
The government’s industry ministry has said it is talking to factory owners to try to retain as many jobs as possible and ensure workers are not exploited.
A training framework is also being developed to improve skills during the production slowdown, said Somchai Harnhirun, deputy secretary-general at the ministry’s industrial economics office.
