DTI’s Lopez: multinational HQ decisions driving plant closures
TRADE-SECRETARY Ramon M. Lopez warned that multinationals could continue to rationalize their operations amid trade tensions and epidemics and acknowledged that the Philippines might not be viewed as a significant market by many corporate headquarters.
“Look at the world, we’re a small country compared to global world demand so you can expect a lot of this rationalization ‘pag global HQ ang nag-aral ng mga resources nila (when global organizations review the distribution of their resources,” he told reporters on Monday.
He was being asked about the recent plant closures and job losses in the Philippine operations of multinational companies.
Honda Cars Philippines, Inc. (HCPI) announced that it would halt operations at its Laguna facility in March. Wells Fargo & Co. is planning to cut 700 Manila jobs and Nokia Technology Center Philippines is closing its research and development unit in Quezon City.
After a meeting with HCPI on Monday, Mr. Lopez said that Honda’s global headquarters decided to shutter its Philippine operation after overall weakness in automotive industry influenced the company to review its global operations.
Mr. Lopez said US-China trade tensions and the coronavirus outbreak as factors that have impacted the world market.
Mr. Lopez said the Philippines is not the only country vulnerable to factory closures, noting that companies will retain manufacturing in certain locations if they are competitive.
“They may not be competitive in the Philippines, but it has something to do with the competitiveness structure ng industry nila (of their industry)… Look at Honda. Ang patok dito ‘yung (What sells here are the) motorcycles, not the cars,” he said, referring to Honda’s continued manufacturing of motorcycles in the Philippines.
“In reality, ‘yun ang malakas na negosyo nila dito, so meron sila negosyo na bagay dito i-ke-keep nila.” (In reality, the motorcycle business is strong here, so they will keep the business that suits this market).
He said that if the global economy improves, multinationals may once more expand and diversify their production bases. — Jenina P. Ibañez
