overtime is the primary casualty in the race to stave off collapse

Auto-makers are slashing overtime to cope with the expected downturn this year, while looking to the government's eco-car project as the white horse to save the industry from the crisis.

Thavorn Chalassathien, chairman of the Federation of Thai Industries' Auto-Parts Industry Club, said recently that a meeting of 80 automobile and parts companies estimated that about 7,500 employees out of the total headcount of 114,000 in the industry would be out of work this year.

Some companies will choose to cut overtime instead of jobs, and the reduced hours would make some workers decide to quit because most of them depend on the extra pay.

He was talking at a seminar held by Krungthep Turakij newspaper.

The industry slump will last 18 months, during which time some companies should develop their human resources and upgrade staff skills to improve efficiency, he said.

Yongyuth Mentapao, chairman of the Federation of Thailand Automotive Workers Union, said employees in the industry would face tough times in 2009 because many companies will trim both overtime and production, which means that some staff of subcontract companies will be lost because their main income comes from overtime.

Anuphol Likhitprukpaisal, secretary-general of the Thai Automobile Dealers Association, said the local market would recover when new segments emerge, such as eco-cars.

Ajarin Pattanapanchai, deputy secretary-general of the Board of Investment, said that despite the financial crisis, the BoI would not review the criteria for granting investment privileges to eco-car production.

"The eco-car is not only a segment for Thailand but also for the whole world because this segment will be a trend and in demand globally after the recession," she said.

The country's car industry could go ahead despite the slowdown, she said. Assembly plants here are highly competitive in terms of both cost and manufacturing, so auto firms can survive the crisis.

The BoI forecasts that investment in this industry will return in the second half of the year after seeing some auto firms that won eco-car incentives start work on their projects.

Nissan has begun talking with auto-parts firms and Suzuki has already purchased land for the project, she said.

This will create employment and reverse the cut jobs in the first half, she added.