Metal workers fear job losses from CARS revision

by Louella Desiderio (The Philippine Star), 21 Oct 2020

MANILA, Philippines — Labor group Philippine Metalworkers’ Alliance (PMA) is urging the government to consider employment implications in the grant of reprieve to beneficiaries of the Comprehensive Automotive Resurgence Strategy (CARS), as well as to use a portion of the budget for the program to support displaced workers of one of the program’s participants.

In a statement yesterday, PMA said the government should take into account employment in its evaluation of providing relief to CARS participants that are facing challenges in meeting the production volume target under the program amid the ongoing coronavirus disease 2019 pandemic.

“While the economy is currently in a crisis, this alone should not be the basis for granting reprieve to companies under the CARS program,” PMA national president Ruel Punzalan said.

The group said granting reprieve would only incentivize car manufacturers to pursue mass termination of workers, encourage reliance on imports, and defeat the objectives of making domestic car production competitive.

PMA’s statement comes as CARS participants are finding it difficult to achieve the volume requirement under the program as the crisis has affected demand for vehicles, as well as their operations.

Rommel Gutierrez, first vice president for corporate affairs at Toyota Motor Philippines Corp., said last Saturday the firm has started talks with the Department of Trade and Industry on the CARS program amid difficulties faced in meeting the production target.

Meanwhile, Mitsubishi Motors Philippines Corp. (MMPC) said in an email that while it remains committed to continue production of its enrolled model under the program, the pandemic makes it hard to predict when the target would be attained.

Under the CARS program, participating firms have to produce 200,000 units of its enrolled vehicle model within six years and in exchange, they would get fiscal and non-fiscal support from the government.

The government has allocated P27 billion for the CARS program, which is being implemented to revitalize the Philippine automotive industry, as well as create jobs.

PMA said that in 2018, however, MMPC already terminated about 400 workers, and another wave of termination is scheduled.

The group also said this is likely to be followed by an increase in imports of completely built units (CBUs).

“Enrollees in the CARS program will certainly not meet their production targets on time when they continue to rely on imports than expand local production. This clearly goes against the objectives of the CARS program,” PMA said.

“To start repairing the injustice, allocating a portion of the budget for the CARS program to provide social amelioration to those already displaced would be a good start,” Punzalan said.

When asked if the government would be open to PMA’s proposal, Trade Secretary Ramon Lopez said during the Laging Handa public briefing, providing social amelioration to address layoffs could be discussed.

“The reduction in jobs is connected to the big decline in the car industry,” he said.

Automotive industry players have been challenged given the imposition of higher excise tax on cars under the government’s tax reform program in 2018, the eruption of the Taal volcano earlier this year, as well as the pandemic.