By: SANTAN SANTIVIMOLNAT
Published: 18/02/2009 at 12:00 AM
Newspaper section: News
GM Thailand is laying off 790 workers after its offer to production staff of temporary leave on 75% wages failed to help allay the effects of the economic downturn.
The company recently introduced a voluntary retirement programme offering production staff 11 months in severance pay, in line with the labour law, plus another 15,000 baht.
Outside the GM Thailand main factory in Rayong. - From GM Thailand website
The layoffs at GM are a blow to the local automotive industry following similar actions by a number of Japanese car makers including Toyota and Mitsubishi.
The US car maker earlier shut its factory in Rayong for two months to avoid an inventory buildup in the face of weakening orders from home and abroad.
Local orders until last month were down 56% compared to the same period last year.
Since only 700 workers came forward to join the voluntary retirement programme, forced layoffs have been introduced for another 90 staff.
Some 50 workers who were forced to resign have lodged a complaint with their union demanding action against GM Thailand's management.
GM Thailand's Rayong plant employs about 3,000 workers.
The company has issued a statement saying the layoffs were unavoidable after it fell victim to the economic downturn.
It said the economic crisis was affecting all industries, including the automotive sector, and GM had to restructure its operations to get through the slump.
"Unfortunately, this restructuring plan is affecting the organisation in terms of reduced human resources," the company said in the statement.
"That's why we have had to implement the voluntary layoff programme. Production staff joining this programme would receive payment packages in accordance with the labour law.
"However, with the crisis we're all facing, the company may have to implement another restructuring option if the voluntary programme doesn't yield sufficient reductions.
"Nevertheless, all employees who resign under any options of the restructuring plan will surely receive compensation packages consistent with the requirements of the Thai Labour Act."
Staff have been told layoffs were happening worldwide and in all industries.
It said the temporary leave programme turned out to be an unrealistic solution to the problems faced by the company as employees received only half or less of their salaries over a short period.