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No massive layoffs as a result of mergers

Nov 02 2015

GEORGE TOWN: Invest Penang director Datuk Lee Kah Choon expressed confidence that factories in Penang will not see massive retrenchments taking place.

Lee, who estimates some 150 jobs to be affected out of the thousands, said the companies involved were AMD, which had joint venture with Nantong Fujitsu Microelectronic Co, and Motorola Solutions’ manufacturing facility in Bayan Lepas, which had been taken over by Sanmina Corp.
He said Western Digital and Dell had also acquired SanDisk and EMC respectively while Amphenol would close one part of its business here.
“Mergers and acquisitions are commonly carried out nowadays not only to consolidate operations but to increase market share and technology synergies. This is happening globally in the semicon and E&E (electrical and electronics) technology companies.
“Penang, as an electronic hub with its many international companies, is invariably impacted,” he said at a press conference here yesterday.
Lee was responding to recent news reports that Penang might lose its position as the Silicon Valley of the East following news of relocations, mergers, retrenchment and even plant closures involving several major foreign electronic players in the state.
According to a report in a local daily, the series of moves, despite earlier reports of injections of tens of millions of ringgit in investment by two Chinese entities in six months, will affect more than 1,000 employees.
Lee said the acquisition of business did not equate to sacking of employees.
“Restructuring exercises will be carried out but it is more to making the business profitable and the expansion of technological manufacturing processes.
“Even if there is massive unemployment, these workers can be easily absorbed by other companies here. We are in a better position now to weather any possible unemployment scenario,” he said.
On German stereo system maker Blaupunkt and HGST, a subsidiary of Western Digital, Lee denied these companies would either close down, relocate or retrench their workers.
“I have been in close contact with Blaupunkt and they do not have any intention to do any retrenchment,” he said.
He described Penang’s investment as “healthy”, adding that the state had been ranked in the top five bracket for the past seven years.
“It is very important for us to bring in the technology to support the supply chain that Penang has already developed.
“We also want investments to create high-income jobs for Malaysians in order for us achieve the national objective of becoming high-income nation in 2020,” he said.

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