Japanese consumer electronic giant Panasonic Corp has closed a liquid crystal display (LCD) manufacturing plant in Selangor in January this year, making nearly 500 people jobless.
According to a former employee, Panasonic Liquid Crystal Display Malaysia Sdn Bhd (PLCDMSB) has closed its manufacturing plant in Shah Alam, less than four years since it began operations in February 2009.
“We didn’t expect the closing. Our severance is one month salary for each year of service and as the plant has only been in operation for less than four years, we didn’t get much money,” said a former employee, adding that Panasonic did not help them get re-employment.
He was told that the reason for the closure is because the company is relocating its LCD operations to China.
When contacted by The Malaysian Reserve, a Panasonic Malaysia Sdn Bhd official did not deny the plant closure but said an official reply will be given next week, while Malaysian Investment Development Authorities also said it will reply to queries on the closure by next week.
The former employee said another undisclosed Panasonic subsidiary is downsizing without giving further details and opined that many manufacturing plants in Shah Alam are suffering from low production capacity due to slowing business activities. “The job market is getting tough, especially in manufacturing,” he lamented.
According to an industry source, Panasonic would only close a plant if it has not been profitable for three consecutive years, adding that PLCDMSB could likely have been producing at a low capacity of 20%. He pointed out that many companies, especially Japanese firms, are losing out against the giants — Korea’s Samsung Electronics and LG Electronics.
The closure came after stories of downsizing, retrenchment or closing by multinational companies in Malaysia.
According to a recent electronic media report, electronics giant Western Digital had earlier this month offered its staff in Malaysia a voluntary separation scheme, targeting to slash its employees by up to 20% or about 1,200 people.
The report added that the decision is a result of the company’s move to relocate its manufacturing operations to low-cost China.
According to a newswire report in December 2012, Sharp Corp, as a part of its turnaround plan, had agreed to sell three of its overseas factories including one in Malaysia to Foxconn Technology Group.
In another recent report, electronics contract manufacturer Sanmina-SCI Corp (M) Sdn Bhd retrenched more than 800 workers from its plant in Kuching, Sarawak. The report cited that the company moved its operations to a facility in Wuxi, China.
Panasonic said in October 2011 that it would cut another 17,000 jobs and close up to 70 factories around the world over the next two years in a bid to pare costs and keep up with Asian rivals.
The report added that Panasonic is seeking to shift its focus to environmental- and energy related businesses such as rechargeable batteries in order to duck competition from Samsung, LG and other competitors in consumer technology.
In a news report last month, Panasonic said it will shut down its assembly plant for plasma display panel TVs in Shanghai as part of efforts to streamline its flagging TV business. The report added that with the closure of the Shanghai factory, Panasonic’s plant for LCD TVs in Shandong Province will become its main production base for TV assembly in China.