Understanding at all levels crucial in pulling through the current crisis

Toyota Motor Thailand and Siam Cement Group believe that understanding at all levels of the organisation is vital for survival during the current crisis. Employees must be aware of business direction and the efforts taken to mitigate the crisis, or morale will plunge dramatically amid fears of sharply rising unemployment.

At the "Mission: Impossible" seminar hosted yesterday by Krungthep Turakij, Ninnart Chaitheerapinyo, vice chairman of Toyota Motor Thailand, said top management must communicate with staff at every level.

"Everyone must understand the crisis correctly, so that the company can create inspiration and a fighting spirit among employees as well as suppliers and dealers," he said.

At Siam Cement Group (SCG), the board will constantly review business direction at meetings that take place eight times a year. On a quarterly basis, 400 manager-level employees convene so that they are fully aware of the company's finances. Then, there is a monthly magazine - launched last year - to update lower-level employees.

SCG employs about 27,000 people.

"Everybody must know all the risk factors. But they must not be in a state of panic, or we will not be able to solve the problems," said SCG president Kan Trakulhoon.

Ninnart said that this year, the domestic auto industry was running at 60 per cent of capacity, planning to manufacture 1.08 million vehicles from an overall capacity of 1.8 million.

As overseas markets are unpredictable, he urged the government to boost domestic demand.

At Toyota, the company must update information on a weekly basis. In focus is a study of Thai lifestyles. Previously, pickups accounted for 68 per cent of the domestic market, but now the ratio of pickups and passenger cars is nearly 50:50.

"We don't know if this trend is temporary or permanent," he said.

To deal with liquidity problems, Thanwa Laohasiriwong, general manager of IBM (Thailand), said a telecom company in India had agreed to pay suppliers a percentage of its revenue. "Thai companies could adopt this practice at a time of short liquidity," Thanwa said.

According to Ninnart, the crisis offers an opportunity for the company to strengthen in-house training efforts as well as provide personnel for outside training programmes. In-house training focuses on financial risks, foreign-exchange risks, productivity and cost-reduction. This would also enable personnel to be sent out to help networks like auto-parts makers and dealers.

In cooperation with universities, Toyota will host four-day training programmes for fresh graduates, who will be trained in subjects such as business management, productivity improvement and practical problem-solving.

"Participants will receive certificates, which could be used as references for their job applications," he said.

In another project, Toyota will help the Industrial Promotion Department in training 20,000 small and medium-sized enterprises, which are increasingly at risk of laying off many workers. Ninnart said Toyota would work with other auto-makers and dealers who still have the capacity to help.

"We can do this when the economy is heading down. We have ample time," he added.

Kan said training had become more intensive, especially with regard to sales and marketing. Through cooperation with partners, the supply chain is improved while employees' morale must be boosted.

"Not that we tell them that there will be no lay-offs, but we must do things that encourage them to fight the problems," he said.

Both Ninnart and Kan believe the crisis should bottom out in the third quarter, but it could take a year or two before their industries return to pre-2008 levels.

However, this depends on government stimulus packages, the speed of disbursement and the government's ability to restore law and order to restore investor confidence. The government must focus on confidence restoration as well as unemployment, they said.

"The government should evaluate the effectiveness of the stimulus package after six months and see what else the public needs," Ninnart said.

Kan said budget disbursement was the most crucial factor in ensuring the effectiveness of the package. He believes the government will need to come up with new measures, and the cost could be huge.

He also suggested that the government reduce corporate taxes in a bid to attract multinational companies to set up regional headquarters in Thailand. He said that if companies could send 200,000 expatriates to Thailand, this would create demand for 200,000 housing units and lead to huge additional spending.

"Many companies want to move to Thailand, but they are concerned about the tax level," he said.

Last but not least, Kan and Ninnart urged Thais to spend.

"Confidence is crucial to boosting spending. If political stability is maintained, people will resume spending. The government budget will lead to higher spending initially, and then the private sector and the general public would add to the momentum," Kan said.