Government is hopeful the closure of the assembly operations of Honda Cars Philippines Inc. (HCPI) would be offset by other foreign automotive companies wishing to set up theirs here.
Ramon Lopez, secretary of the Department of Trade and Industry (DTI) said as HCPI’s Sta. Rosa plant will not be sold yet, he is hopeful the Japanese company would reconsider in the future to come back.
Lopez expressed this to HCPI president Noriyuki Takakura in a meeting yesterday.
Lopez said there are new brands that are in the market which are importing right now and which could take over the plant to be vacated by HCPI once the company decides to sell it.
He said with the coronavirus disease and the difficulties in China, manufacturing companies have to diversify their production sources.
According to Lopez, the Board of Investments has received inquiries from interested companies but he did not identify these.
There are a number of Chinese brands that are in the market. These include FAW, MG, Foton and Geely.
Korean brands wishing to spread their production can also consider the Philippines, he said.
In their meeting, Lopez said Takakura clarified that the decision to close the assembly operations was made by their headquarters.
“It’s a global decision. Apparently, the reason they cited is the global slowdown in the automotive industry. It’s a more competitive industry so they have to make this rationalization and distribution of resources,” Lopez said.
Takakura, according to Lopez, said the rationalization started last year with other plants closing earlier. These are in the United Kingdom, Turkey, Argentina and Mexico.
But Lopez said Takakura also cited coronavirus disease as a major issue affecting demand worldwide.
“There may even be more countries that they will close as they rationalize their operations.
Initially, the global slowdown was started by the US and China trade war… and then the coronavirus,” Lopez said.
But Lopez said the DTI is banking on the imposition of a safeguard duty on imported vehicles, which will only benefit local assemblers, for HCPI to decide to stay.
“Maybe (HCPI) headquarters can consider that in the future. We are not saying they will come back here, but considering all factors, that is possible,” Lopez said.
Lopez said HCPI considered cost competitiveness in their decision to shut down their assembly here.
“It’s cheaper for them to produce in other countries where the volume of production is high. Case in point is that Honda in Thailand produces more than 200,000 units compared here where HCPI produces only 7,000 to 8,000 units. That’s a huge difference in terms of spreading the fixed cost,” Lopez said.
Meanwhile, the Senate committee on Labor, Employment, and Human Resource Development will call for an inquiry to determine the root cause of the impending shutdown of HCPI’s manufacturing plant.
Sen. Joel Villanueva, committee chair, said the pending closure “is a cause of concern” since around 378 employees will lose their jobs.
Louie Soriano, HCPI spokesman, said the company was set to meet yesterday afternoon with the National Conciliation and Mediation Board after HCPI plant workers claimed the decision to close was abrupt.
Soriano clarified HCPI notified the 387 workers of the plant of the decision on February 22 in a town hall meeting. HCPI also sent out individual notices.
Soriano added the workers were advised not to report for work beginning yesterday.
He said that is within the 30-day notice required by law for termination.
“We complied with the 30-day requirement to inform the workers and the Department of Labor and Employment (DOLE),” he said.
Soriano said in addition to separation packages, HCPI is coordinating with the DOLE in helping the affected workers to be given alternative livelihood.
He said the 310 employees who attended the town hall meeting last Saturday stayed behind the premises of HCPI and some held up placards protesting the closure.
As of yesterday, about 100 were still inside the premises.
Labor Secretary Silvestre Bello III said the issue of closure is non-negotiable but said DOLE would be pushing for the best possible compensation for the would-be displaced workers.
“We cannot force them in making the decision. We don’t know what’s the reason for the hastiness of their closure,” he said.
He said DOLE has started negotiating with the company for additional benefits that could be provided to the 378 HCPI workers.
“Considering the automotive industry is booming, it may not be difficult for us to relocate them,” added Bello. (I. Isip, G. Naval and R. Africa)
