Cracks In The Mighty Baht...

[sfokevin]

http://www.bangkokpost.net/News/12Jul2007_news01.php

[andy1308]

The story in full for when the link disappears...

FURY OVER FACTORY'S SHOCK CLOSURE

The shock closure of a textile factory sparked an uproar yesterday as the Garment Labour Federation accused the firm of relocating to a neighbouring country to cut costs at the expense of about 5,000 workers who were immediately made jobless.

Promma Phumpan, chairman of the Garment Labour Federation, denounced the sudden closure of the factory, owned by Thai Silp South East Asia Import Export Co, as irresponsible and opportunistic.

-Bangkok Post

Edited July 11, 2007 by Totster
Edited to comply with Bangkok Post conditions.

[TAWP]

Offtopic, but since all posts pointing towards this host gets edited>>

When the link dies (and it will soon) we won't be able to read more then the small quoted paragraph.

While I understand the need to 'only quote some or they get cranky' I cannot understand why they remove their pages after a few days. Are they so cheap that they bought a 10MB-package from a webhost?

[TAWP]

Ontopic then>>

Not only foreign companies trying to squeese a buck might think about shutting down [relocating]. Export companies ARE having problems when their profit goes into loss if they won't increase their proces sharply...

[Penkoprod]

Seems to me to be a case of "the biter....bitten" here

I, for one think that its got nothing to do with currency appreciation, but more to do with the Thais pricing themselves out of a job. Similar thing happened in The West some years ago, when the manufacturing industry here (West) couldnt compete on a wage level with places like Thailand, Indonesia etc, and, either moved lock, stock and barrel over to The East, or had to become more efficient to compete.

Higher labour costs will almost ALWAYS focus a companies mind on where to look for the cheapest operating base, in this "Global Economy"

Penkoprod

[andy1308]

Every single business is going to investigate the cheapest possible option without cutting standards. Name me one company director who will agree to paying more than he or she needs to just to please the local workforce?

Thailand is no longer a cheap option in many ways - not just because of the strong baht (aka weak dollar). I fear this company will be the first of many that see neighbouring countries as a better option for business.

[think_too_mut]

Seems to me to be a case of "the biter....bitten" here

I, for one think that its got nothing to do with currency appreciation, but more to do with the Thais pricing themselves out of a job. Similar thing happened in The West some years ago, when the manufacturing industry here (West) couldnt compete on a wage level with places like Thailand, Indonesia etc, and, either moved lock, stock and barrel over to The East, or had to become more efficient to compete.

Higher labour costs will almost ALWAYS focus a companies mind on where to look for the cheapest operating base, in this "Global Economy"

Penkoprod

Neighbouring countries have always been cheaper than Thailand, why would anyone come to Thailand 20, 15, 10, 5 years ago in the first place?

Because the neigbouring countries are pretty much rubble with no infrastructure.

Baht has to go further up, maybe to 20baht to dollar to make likes of Toyota, Nissan, GM think of rellocating their capacity elsewhere.

The neighbouring countries won't be ready for big business even then...if ever.

[sbk]

Offtopic, but since all posts pointing towards this host gets edited>>

When the link dies (and it will soon) we won't be able to read more then the small quoted paragraph.

While I understand the need to 'only quote some or they get cranky' I cannot understand why they remove their pages after a few days. Are they so cheap that they bought a 10MB-package from a webhost?

///off topic/// Bangkok Post requirements, nothing to do with bandwidth. And Bangkok Post allows viewing of back pages but only to members, I believe. Annoying yes, but perhaps you should be contacting them instead? ///

Interesting how nobody here seems particularly concerned with the people who have lost their jobs but rather with gloating over Thailand's economic problems.

[Huw]

Seems to me to be a case of "the biter....bitten" here

I, for one think that its got nothing to do with currency appreciation, but more to do with the Thais pricing themselves out of a job. Similar thing happened in The West some years ago, when the manufacturing industry here (West) couldnt compete on a wage level with places like Thailand, Indonesia etc, and, either moved lock, stock and barrel over to The East, or had to become more efficient to compete.

Higher labour costs will almost ALWAYS focus a companies mind on where to look for the cheapest operating base, in this "Global Economy"

Penkoprod

This makes sense. I have long suspected that if the Thais paid a sensible wage to workers, their businesses would fold. In the absence of management technique, copious amounts of money are made by exploitation, corruption or illegal activity. I note that even some high-profile Thai business are planning to relocate to Vietnam, which should have the government reaching for the antacid.

I also agree with the 'biter bit' thing. I suspect that in the next few years, the Thai national self-image is going to take quite a battering when confronted with the reality of their actual (as opposed to their imagined) importance in the world. I also suspect that after the 1997 debacle, no other Asian country is going to be rushing to give them any help. Thais are not well liked or trusted in the world and one needs to consider why this is so. I think Thailand is on the brink of a long-term decline back into the 3rd world and if so, they have only themselves to blame.

H

[wasabi]

I am worried for my Thai friends and the stability of the nation that this is the beginning of an emerging trend. With the rising baht, political instability and neighboring regions offering easier foreign investment and a more educated work force I think it could be 1997 all over again but this time more squarely focused on Thailand. Even my Thai co worker who has great nationalistic pride thinks Thailand has made some serious missteps in economic policy. Granted they've been dealt some serious challenges but the missteps have added insult to injury.

[samran]

Every single business is going to investigate the cheapest possible option without cutting standards. Name me one company director who will agree to paying more than he or she needs to just to please the local workforce?

Thailand is no longer a cheap option in many ways - not just because of the strong baht (aka weak dollar). I fear this company will be the first of many that see neighbouring countries as a better option for business.

which will be a fantastic thing for Thai consumers to get their products at the best price possible.

Thailand is at a point in its economic history where it needs to 'step up' and move beyond cheap manufacturing and move into services and knowlegdge based industries. Or create increasingly value added products which to sell the rest of the world.

The strengthening of the baht is a good way for that to happen, as it forces business and government to think about how it is going to make the economy more productive. Thailand for too long relied on a cheap baht to soften the blow of globalisation, but that clearly can't happen for too much longer. It is painful, but it is happening.

[think_too_mut]

Interesting how nobody here seems particularly concerned with the people who have lost their jobs but rather with gloating over Thailand's economic problems.

Indeed, what's going to happen when 5000 people are suddenly released from work? Appears there were no warnings that would prepare them.

Unaware, people were spending the same way as they would when their jobs are certain.

Hope the authorities make the exit for the company as expensive as possible and severance money is substantial.

[SARDINES]

Interesting how nobody here seems particularly concerned with the people who have lost their jobs but rather with gloating over Thailand's economic problems.

Indeed, what's going to happen when 5000 people are suddenly released from work? Appears there were no warnings that would prepare them.

Unaware, people were spending the same way as they would when their jobs are certain.

Hope the authorities make the exit for the company as expensive as possible and severance money is substantial.

Think_too_mut,

I'm not too worried about them to be honest. They will most definitely be compensated. This company has not gone bankrupt, but made a strategic shift in their operations. Therefore, they will be forced to pay-up a certain amount.

Secondly, I believe that probably about 90% of those workers are daily wage workers. Once they get their compensation and stop the protests, they will immediately be able to find jobs. I am 99.9% sure of this because daily wage work force is still in strong demand. Actually, we have a huge shortage of daily wage work force in the factory/manufacturing sector. My company is also a factory and we literrally have to fight over getting the workers from other factories.

It will be the monthly employess who will have the hard time to find new jobs. Some might get jobs immediately and some might take a few months. Therefore, I hope these staff get a reasonable compensation required by Thai law depending on how long they have worked for the factory.

rgds / sardines

[Mid]

Laid-off workers to be compensated; says employer

Thursday 12 July 2007 01:30:20 PM (GMT+7:00)

BANGKOK, July 12 (TNA) – The owner of a suburban Bangkok garment factory has agreed to pay compensation to laid-off workers following Wednesday's protest by thousands of workers against the factory's closure without informing workers in advance.

Wiping his tears, Phiphat Oonopas, owner of the Thai Silp Akane Import and Export factory said during the negotiations with the laid-off workers at Samut Prakan's city hall that he needed to close the factory suddenly because of losses in his business, caused by the sharp baht appreciation.

MCOT Public Company Limited

close the factory suddenly because of losses in his business, caused by the sharp baht appreciation

only the first of many under the current conditions .

Edited July 12, 2007 by Mid

[nick2k]

Offtopic, but since all posts pointing towards this host gets edited>>

When the link dies (and it will soon) we won't be able to read more then the small quoted paragraph.

While I understand the need to 'only quote some or they get cranky' I cannot understand why they remove their pages after a few days. Are they so cheap that they bought a 10MB-package from a webhost?

///off topic/// Bangkok Post requirements, nothing to do with bandwidth. And Bangkok Post allows viewing of back pages but only to members, I believe. Annoying yes, but perhaps you should be contacting them instead? ///

Interesting how nobody here seems particularly concerned with the people who have lost their jobs but rather with gloating over Thailand's economic problems.

it is funny that you mention that. ..nobody seems to care about the MILLIONS who lost their jobs in the usa to outsourcing in india, and factories in china.

..as one thaivisa member put it quote, "those morons in the usa don't know how to compete against other countries, they deserve to be taken advantage of."

NOW, thailand KNOWS how it feels to see their jobs go away to other countries.

[Scott]

The move away from manufacturing and industry to service oriented businesses requires a well-educated, skilled and trained population. I think Thailand has a ways to go before that void is filled.

[samran]

The move away from manufacturing and industry to service oriented businesses requires a well-educated, skilled and trained population. I think Thailand has a ways to go before that void is filled.

To make it happen Thailand needs a external economic kick up the backside. This is what the baht strengthening appears to be.

I think everyone appriciates that there will be losers, but this isn't a zero sum game for Thailand. I don't know what the eventual outcome of this reform will be, but I know that the status quo can't continue.

But do I think Thailand is in crisis? No I don't.

[AmericanGuy1066]

You have to feel sorry for the people who lost their jobs.

At the same time, how much thought was spared for the people who they in turn took jobs off during the last 27 years....

"The factory, which opened in 1980, is a major producer of ready-to-wear sports clothing lines for global brands such as Nike and Adidas".

So it's global brands moving on in the global sphere

Vietnam is fast getting it's act together, as are China and India. Then again BBC World yesterday had a slot showing Indians losing out to other countries... ...

Edited July 12, 2007 by AmericanGuy1066

[Ned]

Where can I borrow a rottweiler?

[Mid]

Where can I borrow a rottweiler?

there's an art to black humour , well done .

[steveromagnino]

The move away from manufacturing and industry to service oriented businesses requires a well-educated, skilled and trained population. I think Thailand has a ways to go before that void is filled.

You mean like how Malaysia, Poland, Vietnam, China, India etc are doing now?

Any economic change requires some well educated people, a bunch of grunts and a reason to change. Competitive intensity is as good a reason as any.

Thailand will do just fine like they already do in certain industries (marine manufacturing of windsurfers, silk, shrimp vs. rice, moving up the value chain in food manufacturing etc) - all about making people change. Outsourcing is a good thing. Let's hope the people involved upskill themselves a bit and find a better paid more skillful job.

The sooner people understand that THailand doesn't have to rely on cheap labour and tourism long term, the sooner the country actually gets developing. Like Korea did over the last 20 years.

[Mid]

Business as usual for Thai Silp on Friday

(BangkokPost.com) - After what must have felt like an eternity, the prayers of Thai Silp Southeast Asia Import Export Co., Ltd. employees were finally answered. Owners of three garment manufacturing factories, who on Wednesday placed a sign on the company's main gates informing employees that all factories have been shut down, made a u-turn on their decision.

Following talks with the Labour Ministry, Pipat Unopas and his wife, Yawalak, owners of Thai Silp, both agreed to resume their business operations on Friday. They also warned that the company may continue to suffer from liquidity problems due to the strengthening of the baht.

The Post Publishing Public Co

[Mid]

The sooner people understand that THailand doesn't have to rely on cheap labour

your at odds with the official line mate ,

cheep labour is quite a selling point .

[sonicdragon]

Every single business is going to investigate the cheapest possible option without cutting standards. Name me one company director who will agree to paying more than he or she needs to just to please the local workforce?

Thailand is no longer a cheap option in many ways - not just because of the strong baht (aka weak dollar). I fear this company will be the first of many that see neighbouring countries as a better option for business.

which will be a fantastic thing for Thai consumers to get their products at the best price possible.

Thailand is at a point in its economic history where it needs to 'step up' and move beyond cheap manufacturing and move into services and knowlegdge based industries. Or create increasingly value added products which to sell the rest of the world.

The strengthening of the baht is a good way for that to happen, as it forces business and government to think about how it is going to make the economy more productive. Thailand for too long relied on a cheap baht to soften the blow of globalisation, but that clearly can't happen for too much longer. It is painful, but it is happening.

The move away from manufacturing and industry to service oriented businesses requires a well-educated, skilled and trained population. I think Thailand has a ways to go before that void is filled.

To make it happen Thailand needs a external economic kick up the backside. This is what the baht strengthening appears to be.

I think everyone appriciates that there will be losers, but this isn't a zero sum game for Thailand. I don't know what the eventual outcome of this reform will be, but I know that the status quo can't continue.

But do I think Thailand is in crisis? No I don't.

Wise words from Samran. I fully agree. But I wonder if enough politicians recognise it. It won't happen through entrepreneurial spirit alone.

[samran]

But I wonder if enough politicians recognise it. It won't happen through entrepreneurial spirit alone.

I think they may do, but it is another thing for them to do anything. I sometimes wonder if it really matters as only crisis will be able to make them take the hard decisions anyway. But it does take one or two smart and persuasive people to bring the rest of them along.

I'm currently re-reading (very slowly) a book called the 'End of Certainty', which documents the political and economic transformation of the Australian economy through out the 1980's. A key point was that the floating of the dollar in 1983 was the calalyst to make a Labor government do things that it otherwise probably wouldn't done when it was first elected. Although the currency was going in the other direction, making Australians realise that they consume more than they earned, the result was that governments forced though a whole series of reforms to improve the productivity of the economy as a whole. You name it, competition reform, de-regulation as well as tying in wages to productivity, foreign banking competition, getting rid of tariffs.

But it still took a decade for these reforms to bear any fruit and it is even harder to measure these fruits, as productivity gains are usually buried in the residual of any econometic regression on the growth numbers (you have there, the limits to my econometric knowledge...)

Where Thailand stands now is probably on the verge of grudging acceptance of these things. I don't really beleive in trickle down views of the world, but since the 1980's the Thai goverment, as well as middle class families, have spent a huge amount on getting foreign education for a relatively large swathe of people. I think Thailand is more prepared educationally that people are prepared to give it credit for, given that we tend to forget that the people who undertook the reforms in the US, UK, OZ and NZ were from a generation when finishing high school at 16 was seen as a good acheivement. It is a good base to start from. The rest, they'll learn on the job.

[LoveThai]

Hey man , what is wrong with the mods here. i created a topic on thai bhat that is strong and it get closed

now is $1 to 30 bhat. anything wrong with that?

[marshbags]

Business as usual for Thai Silp on Friday

(BangkokPost.com) - After what must have felt like an eternity, the prayers of Thai Silp Southeast Asia Import Export Co., Ltd. employees were finally answered. Owners of three garment manufacturing factories, who on Wednesday placed a sign on the company's main gates informing employees that all factories have been shut down, made a u-turn on their decision.

Following talks with the Labour Ministry, Pipat Unopas and his wife, Yawalak, owners of Thai Silp, both agreed to resume their business operations on Friday. They also warned that the company may continue to suffer from liquidity problems due to the strengthening of the baht.

The Post Publishing Public Co

This is great news for the employees.

Let us hope it,s a lasting action.

I,d like to think Nike ect. have made certain offers of help relating to the export situation and the re opening of the factory.

Nice one for all the families in particular don,t you think

marshbags

[Mid]

Thai shares close lower as strong baht sparks sell-off in exporters

London: 12:23, 12 Jul

BANGKOK (Thomson Financial) - Thai share prices closed lower Thursday as the baht's sustained rise against the US dollar sparked a sell-off in export-linked stocks, with the negative sentiment also affecting banking and energy shares.

The Stock Exchange of Thailand (SET) composite index fell 2.41 points or 0.28 percent to 843.87 points and the blue-chip SET 50 lost 2.32 points to 603.96.

AFX News Limited

[Mid]

I,d like to think Nike ect. have made certain offers of help relating to the export situation and the re opening of the factory.

I gotta ask , you serious ??

[marshbags]

I,d like to think Nike ect. have made certain offers of help relating to the export situation and the re opening of the factory.

I gotta ask , you serious ??

Just a wee hint of sarcasm in the observation and tongue in cheek as they say back home.