MALAYSIA’S automotive manufacturing industry is facing an acute shortage of workers and this can derail the national automotive manufacturing (NAM) ecosystem if not resolved immediately.
Proton Vendor Association president Datuk Wan Mohamed Wan Embong said the ecosystem might collapse with the loss of more than 500,000 jobs and wiping out up to 4.5% of the national gross domestic product (GDP) if the manpower issues in the industry are not addressed promptly.
“Malaysia should allow intake of foreign workers without any further delay and lower the recalibration cost for about three to five million illegal immigrant workers in the country to address the shortage,” he said.
Wan Mohamed said the current cost of legalisation of illegal foreigners, at RM4,500 per person, was prohibitively expensive, especially when the companies are struggling to recover from the COVID-19, lockdowns and also the recent flash floods.
He added that hiring of foreign workers by the automotive manufacturing ecosystem did not rob locals of job opportunities as the industry had been putting a lot of effort into hiring locals, even though most of them often resign within six to 12 months of hiring.
“We must understand that severe labour shortage derails the economic recovery of the automotive industry, causes stoppages and under-production at original equipment manufacturers.
“At present, vendors do not have enough workers. When they cannot produce the parts, other vendors are being affected, too. Hence, production cannot move according to target.”
He said the situation had caused many car buyers to wait longer for delivery of their vehicles. The waiting period is up to four months.
Due to the labour shortage, he said the cost of manpower had also increased from RM80 per day last year to RM125 per day, resulting in high turnover or higher wastages.
Meanwhile, Perodua Suppliers Association president Musa Zahidin Ahmad Zaidee said the industry had been equipped with training facilities for the people, especially for locals.
Unfortunately, many of them quit within a few months, leaving the vendors to face challenges in upskilling and increasing production to meet the demand.
“We must also bear in mind that foreign workers are not cheap as it becomes costly with the accommodation, levy and permit expenses.
“This is why the legalisation of illegal foreigners is crucial,” he said.
He said the automotive manufacturing industry needs 100% operations in order to build a car, which will have 20,000 to 25,000 parts in total.
“Even if 0.1% of the suppliers cannot operate, the whole line of a few thousand people cannot fix a car. This is the serious issue we are facing now.”
Apart from the shortage of manpower, Wan Mohamed said many vendors were also facing lack of capital to operate efficiently because of the prolonged economic, health and environment crisis caused by COVUID-19, flash floods and the ringgit depreciation, especially in the last one year.
“These people face lower revenue due to continued supply chain disruptions and operational stoppages due to the pandemic and shortage of raw materials.”
He suggested that the Government consider providing RM250 mil in soft loans, at less than 2% interest to all vendors in need to continue operating and save the whole ecosystem. – April 3, 2022
