Labor NGO Ecumenical Institute for Labor Education and Research (EILER) expresses alarm as more and more corporations are laying off employees, contributing to the number growing of joblessness in the country.
EILER noted that already at least 2,626 employees are part of layoffs since the beginning of 2020 as specific divisions of Honda Cars Philippines, Inc. (387 plant workers), Wells Fargo & Co. (700 tech employees), and Nokia (700 IT professionals) close, and as PAL downsizes affecting 287 administrative staff. Before the four more talked-about companies, Yamada Technology Corp. (YTC), a manufacturer of furniture and Ecowalls products in Digos, Davao del Sur already closed on February 10 and laid off 552 workers. YTC, a subsidiary of Japan-based Yamada Denki, Co., one of the largest consumer electronics retailer chains in Japan, has been downsizing since 2015.
“The downsizing also affects workers along the supply chains, so the job loss is actually more. Take Honda Philippines for example, the closure of the car manufacturing plant may affect employees of their 60 parts and materials suppliers and 38 dealers nationwide. In England, as Honda announced its Swindon car factory will cease production in 2021, it will be laying off 3,500 workers. Honda said that another 3,500 jobs could be affected in its subsidiaries and partner companies, bringing the total to a massive 7,000 job losses,” Executive Director Rochelle Porras said,
EILER cited the companies’ annual reports and pointed out that they are generating income in spite of the economic downturn. For Honda, production might be slowing, but its profit soared in 2018 by 72% (988 million USD) and net sales is not drastically plummeting. Its forecast for the end of its fiscal year in March projects its operating profit to increase 68.2 billion YEN (635 million USD). For one of the biggest banks in the world, Wells Fargo’s profit in Q4 2019 may have declined to 2.87 billion USD from 6.06 billion USD the year prior, but it’s mainly due to low-interest rates and the litigation charges and fraud scandal it faced some years back finally weighing. Nokia’s profit went up to 821 million EUR (917.4 million USD) in Q4 2019 by 11% as compared to the year before. Meanwhile, PAL’s parent company, PAL Holdings Inc. has been able to trim down its profit losses. PAL’s labor costs are steady and cargo revenues are up. In 2019, it announced that it is ‘confident in swinging back to profitability’ with ANA’s investments and its upgrades and expansions to be a five-star carrier.
“Walang nalulugi even PAL is still generating high revenues. That’s why, the workers were shocked at the ill-announced layoffs,” Porras said.
Porras also identified a couple of similarities at least in the claims of Honda, Wells Fargo, Nokia and PAL management based on their official statements in the Congressional hearing on March 3. First, that they are reorganizing, strategizing on technological impacts. Second, they are relocating what they’re closing in the Philippines, to other countries, except for PAL.
“Honda and Wells Fargo see opportunities in Thailand and India. But these two countries, unlike the Philippines, have not ratified fundamental ILO Conventions 87 and 98 on freedom of association and collective bargaining and C095 on the protection of wages. With multinational corporations competing for lower wages and weaker labor regulations, it really is race to the bottom,” Porras said.
“COVID-19’s impact is felt worldwide and in many supply chains not just PAL. People are flying less; they are not booking hotels for travel. The environmental and health degradation that we have now is a consequence also of race to the bottom under an unsustainable economy and profit-driven production and consumption. As the situation continues, we need to brace ourselves for massive job loss,” Porras added.
“Only trade unions can stop the race to the bottom, but our labor unions are under attack. They are victims of union-busting, red-tagging, harassment, and police and military interventions such as the unconstitutional Joint Industrial Peace Concerns Office (JIPCO). There are so many barriers in organizing trade unions. We must eliminate these and build our national industry so we don’t have to rely heavily on foreign investments from corporations who can easily come and go as they please,” Porras concluded.
NEWS RELEASE
5 March 2020
Reference: Ms. Rochelle Porras, Executive Director, +63 920 127 6491
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