GM THAI unit targets 156 jobs

General Motors (Thailand) has announced an early-retirement programme for nearly 160 employees, as its financially troubled US parent struggles to get a massive bail-out package from the US government.

However, Toyota Motor Thailand, Honda Automobile (Thailand) and Tri Petch Isuzu, the country's top-three auto companies, said they had no plan to reduce their headcounts at this stage.

Overall, the Thai automotive sector is bracing for tougher export and domestic markets.

Executives of the three Japanese auto firms said export orders had declined, which meant they would have to reduce output, resulting  in less overtime payments.

Production lines will be readjusted so that no employees are laid off, however. Thailand's auto production capacity is 1.8 million vehicles per year, of which 1.2 million units are exported.

The global financial crisis and the economic slowdown in major markets have significantly reduced orders for vehicles assembled in the Kingdom.

Honda Automobile (Thailand) director Pitak Pruthisarikorn said the company's export sales had dropped by 10 per cent, as a result of which it will reduce working hours, instead of laying off employees.

A Toyota executive, who asked not to be named, said the company was closely monitoring market conditions so that it could adjust production lines to cope with declining demand, or reduce work shifts if things get even worse.

As for General Motors (Thailand), the early-retirement plan has spooked the labour unions of Thai auto companies. Announcing the scheme last Friday, the local unit called for 156 employees at its sprawling Rayong plant, including 102 team leaders, to tender their resignations, as production capacity would be cut from next month.

The employees are entitled to minimum compensation as specified by labour laws, plus an extra amount equivalent to two months' salary.

The company employs more than 3,000 people, according to its website. It operates the group's Asean manufacturing site, which can produce up to 130,000 passenger cars and trucks a year.

Chartchai Suwanasevok, director of public relations for GM Asean/Thailand, said the early-retirement programme was part of the parent company's policy.

"Today, we cannot predict what the world economy will be like, so we need to take precautionary measures," said the executive, who tendered his own resignation before the programme was launched.

General Motors (Thailand) exports 70 per cent of its output to Australia, the Middle East and other parts of Asia. All markets except Australia show signs of slowing demand.

Falling demand both overseas and in the domestic market have led to fears that other Thailand-based auto-makers will shed workers.

Yongyuth Mentapao, chairman of the federation of auto labour unions of Thailand, said he is gathering data on lay-offs, adding that some companies like Ford have launched early-retirement programmes and others such as Toyota and Isuzu have allowed workers to take leave from December 25 to January 7, but with only 75-per-cent pay.

He said Toyota would reduce capacity by 40,000 units from December to May, and Isuzu by 30,000 units from December to March.

"I'm afraid that unemployment will get more serious, considering the production plans. We're worried that about 30 to 40 per cent of 500,000 [Thai auto sector] workers could be laid off, " he said.