First, we read that JVC is quiting Malaysia and relocating to Thailand.
About 500 workers from consumer and professional electronics devices corporation — JVCKENWOOD Malaysia Sdn Bhd — were laid off as part of the Japanese company’s plans to relocate its operations, shutting down its plant here.
News of the factory’s official closure today had been making its rounds over social media, attracting netizens to lament on the workers’ plight and the state of economy.
While some described the sudden closure as being unfair to the workers, checks by The Rakyat Post revealed that this was not the case.
“The workers were not laid off suddenly as they were already notified of the closure earlier this year,” a factory worker said.
While some of the staff were retrenched, appropriate compensation was paid and JVC had also assisted others to secure employment elsewhere.
“They told us that the factory operations were moving to Thailand,” said the worker.
Source: The Rakyat Post
And then we read about the possibility of Shell’s winding up their IT operation here in Malaysia.
Around 850 jobs could be at stake at Shell offices in Cyberjaya as the Anglo-Dutch oil major consolidates its IT functions at a new base in Bangalore, India.
While no decision has yet been made, a senior officer dropped this bombshell during a town hall meeting with staff in Cyberjaya late last month, said sources.
The Bangalore move could also affect some 1,000 third party contractors if they are unable to relocate to India, the sources said.
Source: RoyalDutchShellPLC.com
And we always read about how our government provides tax rebates, free trade zones and many other perks to get these multi-national corporations (MNCs) to setup their operations here. These MNCs provides job opportunities and brings money to invest, so goes the logic.
Anyway, I’m rather amused by the way these MNCs just close shops like that, citing higher cost of operation as their main reason. In a way, as a business strategy, I totally agree that when the environment becomes hostile, a business should always relocate to a more business-friendly environment, e.g. cheaper labor, lower tax rates etc.
But bear in mind, these corporations do not have any loyalty to the Malaysia, or it’s likely they pledge no allegiance to any countries. They will stick around as long as the countries are conducive to their operation. Instead of spending resources to attract these MNCs, I suggest that we put more effort to build up the local businesses in Malaysia, specifically the small and medium enterprises (SMEs). These local businesses are the ones that faithfully contribute taxes and keeps the economy going even during the worst recessions. They are also likely the business segment that is responsible for the majority of the employment in Malaysia.
They are a lot of reasons why we should boost local businesses. Perhaps you can name a few.
While there’s nothing wrong with making Malaysia a lucrative place for foreign corporations to setup shop, but I really think that there’s nothing much being done to make life easier for local businesses.