Car parts manufacturers concerned over job losses

Automotive parts manufacturers expressed alarm over the state of local car manufacturing and assembly industry and warned of more job losses following the shutdown of Nissan Philippine Inc.’s local operations.

Philippine Parts Makers Association Inc. president Ferdinand Racquelsantos said members were among the first affected whenever there was a shakedown in the automotive industry. 

“This is very alarming because this was aggravated by pandemic. But even before that, the assembly industry is already on a downturn. Car makers were already having difficulties. The decline in CKD [completely knocked-down] assembly has been going down for several years,” he said over the weekend.

Honda Cars Philippines Inc. also terminated the assembly of Honda City and Honda BR-V in 2020.

Racquelsantos said parts makers shed about 35 percent of their employees during the strict lockdowns.  He said the closure of more assembly facilities would make it even more difficult for parts makers to continue their operations, unless they could easily pivot to making other parts for other types of vehicles manufactured locally that would require more if not new investments.

“Like in my company, I have reallocated my workers from my seatbelt manufacturing plant to my solar business,” said Racquelsantos who also owns the seatbelt manufacturing firm AutoFir Enterprises.

The lack of opportunities for parts makers, he said, forced majority of members to shut down. He said there were only 49 firms in operation this year, down from 128 in 2015. Sixteen companies closed shop in 2020 at the height of the health crisis, he said.

Racquelsantos said the only hope for parts manufacturers was the proposed imposition of safeguard measures on imported vehicles.

“Parts makers have reached 60 percent operability in 2020. We all hope that we’ll get to normalize operations this year,” he said.

Meanwhile, the Philippine Metalworkers Alliance called for a review of the development plans for the auto industry, after two major car assemblers stopped assembly in the Philippines.

The group said the latest shutdown made it clear that the issuance of a safeguard measure is “absolutely necessary.”

“Government should ensure that this will be the last closure. This is why it is high time for the government to revisit its automotive development program,” said Philippine Metalworkers Alliance president Raul Punzalan.

PMA said imposing the safeguard measures alone would not be enough to save the automotive industry.  It cited the need to address the cost of doing business in the Philippines, particularly the cost of power, improve infrastructure and reduce cost of transportation.

“What we now need is to gear the industry towards producing what the country needs for its own development, such as re-fleeting our public transportation,” Punzalan said.

The third tranche of the Comprehensive Automotive Resurgence Strategy, which was earmarked for the production of eco-PUVs, would have been a step towards the right direction, he said. “If the automotive industry is the lynchpin of our industrial development, then the government must step in to save it,” Punzalan said.

Topics: Philippine Parts Makers Association Inc. , Nissan Philippine Inc. , job losses , Honda Cars Philippines Inc.
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