Car firms, labor urge progressive policy

Published January 25, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

Car companies operating in the Philippines and the labor sector have urged government to adopt a progressive policy that promotes a competitive business environment to preserve the remaining local vehicle assembly/manufacturing in the country.

The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), a group of over 20 motor vehicle companies operating in the country, and the Philippine Metalworkers Alliance (PMA-SENTRO), which groups labor unions in the steel, metal and automotive sectors, issued their separate statements following the closure of the manufacturing plant of Nissan Philippines Inc., the most recent in a spate of plant closures since last year.      

The industry and government should work together towards a more progressive policy to preserve the remaining local vehicle assembly/manufacturing in the Philippines,” said CAMPI in a statement stressing that the decision of Nissan to cease assembly operation highlights the importance of government support to local manufacturing/assembly of motor vehicles.

CAMPI, which slammed the recent decision of the Department of Trade and Industry to impose a safeguard measure on imported completely built up (CBU) vehicles (P70,000 per unit of imported passenger cars and P110,000 per unit of imported CBU light commercial vehicles) on efforts to protect the domestic car manufacturing and save jobs, stressed that car companies will only invest in a country that offers competitive environment. 

It insists that CBU importation is necessary for the survival of companies engaged in completely knocked-down operation.

“The remaining local assemblers need more support to stay competitive without undermining regional complementation on supply chain, among others. There should be a balance between complete knocked-down (CKD) operation and imports of completely built-up unit for local plants to survive. CKD operation cannot survive without a combination of CBU importation,”CAMPI said.

Meantime, PMA-Sentro said the imposition of the safeguard measure is not enough to save the domestic automotive industry and from to stop car companies from their exodus from the Philippines.

“There is clearly a need to address the cost of doing business, particularly the exorbitant cost of power that hamstrung local production of automobiles as well as the need to improve infrastructure to lower cost of transportation to link production centers to ports and its supply chains,” said PMA-Sentro citing the 133 workers who lost their jobs following the closure of the Nissan car assembly assembly plant in Laguna.

Nissan is the latest episode in a series of company closures that made the issuance of a safeguard measure absolutely necessary.

 “Government should ensure that this will be the last closure,” Ruel Punzalan, President of PMA, said. “This is why it is high time for the government to revisit its automotive development program,” he added.

PMA said that pouring billions of tax-payers money to support the industry while leaving its development direction to the hands of transnational corporations alone would only consign the country’s productive capacities to the minor role in their global plans.

The PMA was referring to the Comprehensive Automotive Resurgence Strategy (CARS) program that dangles tax and fiscal incentives for companies to assemble their car models in the country. “What we now need is to gear the industry towards producing what the country needs for its own development, such as re-fleeting our public transportation,” Punzalan said.

The 3rd tranche of the CARS Program, which was earmarked for the production of eco-PUVs, would have been a step towards the right direction. Unfortunately, the program seems to have been put on hold.

As the automotive industry continues its spiral down, PMA has calling for a high level tripartite discussion among industry players – employers, workers and the government – to discuss how to save an ailing industry. This is part and parcel of realizing its constitutional mandate to promote local industries and their workers.

“If the automotive industry is the lynchpin of our industrial development, then the government must step in to save it,” Punzalan said.