GEORGETOWN, Dec 19 — Penang’s industrial areas will turn into ghost towns between Dec 22 and Jan 5 as factories shut down longer for the year-end holidays amid falling demand from major markets that are already in recession. Some manufacturers have also sent back foreign workers as their contracts lapse.
But industry insiders say Penang’s multinational manufacturers, particularly in the electronics sector, face a bleak 2009 as demand dries up for components and accessories. They expect further job cuts even as the companies mull over shortening work weeks or closing production lines.
The DAP secretary-general said Penang has attracted RM8 billion thus far in investments for 2008 against RM4.7 billion last year, adding the state could have taken in RM10 billion in investments if there was no economic downturn.
Despite the rising investments, Penang businessmen are bracing for hard times. Manpower suppliers say one multinational had just sent back nearly 400 workers or 10 percent of their workforce when their contracts lapsed. “The MNC has another 100 foreign workers and they are expected to leave once their contracts expire too,” one labour consultant told The Malaysian Insider.
He added some companies are thinking of reducing work days to retain their staff and avoid retrenchment.
“Retrenchment is the last option as some don’t have the funds to pay severance packages,” he explained.
A senior executive at a multinational electronic maker said the situation will get worse in 2009.
“There is just no demand for anything electronics. We will have to let the workers go and close production lines very soon,” said the executive,
Source: The Malaysianinsider