Electronics Units In Thailand Considering To Relocate Due To Wage Hike, Floods

[ozzieman05]

The cost of relocating as made many companies not looking at moving to another country, paying the high wage is still the best option

The floods have changed the rules as now most companies now need to re build, so the cost of moving is much lower when compared to the fact it will cost x$ to rebuild anyway

[visions]

Send them to Burma, a few years ago the wage for some girls carving designs into laquer ware was 35 cents a day US plus board and room. The daily wage for a road worker was 70 cents a day no room and board. It may make good economic sense for companies to move for lower wages but it doesn't make it right morally or other wise.

In due time they will have exhausted all of the low paying countries and then what will they do.

There will always be lower wage countries. As each country GDP and costs rise thru investment from foreign companies, after a time, due to greedy Governments and socialist programs, the profitable companies are "squeezed" .

Finally, and usually due to a major event (read thai floods) another country becomes more attractive and cheaper to set up a brand new plant and do business in, rather than rebuild an existing plant with in built limitations.

USA saw the exodus to China, now China, in turn, is relocating manufacturing to Africa and Middle East and even, believe it or not USA as the stagnant wage/cost level becomes once again competitive with others, and with a big consumer market to boot. (believe or not but there is even at least one Chinese car manufacturer that has set up manufacturing facilities in USA)

Thailand's idiotic inconsistent beaurocracy .combined with straight out blatant graft demands, have all but killed new investment and development from outside investment companies anyway. I was with one company in Thailand employing Thai workers....that finally said, enough is enough, and closed the plant. Felt sorry for the Thai workers, but the Govt departments made it impossible to continue profitably.

The floods are just the final straw and reason/exuse to leave

[SICHONSTEVE]

Not bad really - Yingluck has "f****d up the country in about 3 months - what took her so long, I hesitate to ask????:jap:.

They can always have another coup to remove her, and the farcical Thai political process can start all over again.

Wouldn't want her to become only the second elected Thai PM after her brother to serve a full term would we?

"Wouldn't want her to become only the second elected Thai PM after her brother to serve a full term would we"?

That woud be akin to a severely arthritic, one legged Lithuanian running (hopping I suppose) backwards and winning the 2012 London olympics marathon by 10 minutes in a "world record" smashing time!!!!:jap:.

Edited November 25, 2011 by SICHONSTEVE

[onomataho]

An aspect overlooked in this discussion is that paying a higher wage will lead to more domestic consumption (spending).

Thailand needs to strengthen this aspect of its economy to become less reliant on global demand for cheap products.

Adapting to the fickle nature of manufacturing (e.g., companies relocating elsewhere) is just part of this change.

[Deez]

"Morals and exploitation" - the catchwords used by failed businessmen to condemn those businesses that have succeeded by being smarter.

It's the same cheap labour that made the computer you are typing your posts on.

The same labour that allows you to afford to buy your shoes, your clothes, your iPOD and your TV.

Your beef should not be with these smart companies.

They are been wooed by all the Asian countries with incentives and tax breaks to help increase employment, skills and drag their economies up a few notches. It's the reality of the world we live in - competition and economics....and soon Thailand is going to understand just what those 2 words really mean in the harshest way possible.

+1 Voice of reason

[AlanL1275]

"They Should "Shut Up" and "Suck It Up"

[drdoom6996]

People were no doubt saying the same thing when the businesses and factories were relocated to Thailand from wherever they were before.

Let's hope Cambodia benefits as much as Thailand has done.

They left Malaysia when the Idiot DR. didn't float the Ringut when all the other Asian countries did float their currencies on the open market.

[Chopperboy]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

Well suddenly that greedy bastard was out of business because his biggest competitor moved to Cambodia three years ago, and overflowed the market with his cheaper products. You have no economic sense. Look at your home country. Those greedy bastards moved all production to China decades ago..

Consumers are used to buying products for peanuts so thats where the cost pressure comes from.

But cheap labour/ materials is not going to last forever.

If you look at the history of the electronics industry you see it has delivered an increase in price/ performance productivity unmatched elsewhere.

Edited November 25, 2011 by Chopperboy

[silsburyhill]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

+ 1. Money grabbing bastards. So they don't pay the going rate for their home grown workforce, they've tried Thailand, where next? Can't be China, they'd have already gone there. Must be looking at slave driving the Khmers or the Burmese. Laos?

One day everyone will have a decent living wage. Where all these Ass*holes going to go then?

This was all started by the West. Predominantly the US. Who are now fckd.

[jonclark]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

Must be looking at slave driving the Khmers or the Burmese. Laos?

.

Nah can't do that, The Thais have got that market sown up already !!

[cloudhopper]

IMO the global recession will stop many companies from rebuilding here or anywhere else and they will seize this as an excellent opportunity to downsize.

[SICHONSTEVE]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

+ 1. Money grabbing bastards. So they don't pay the going rate for their home grown workforce, they've tried Thailand, where next? Can't be China, they'd have already gone there. Must be looking at slave driving the Khmers or the Burmese. Laos?

One day everyone will have a decent living wage. Where all these Ass*holes going to go then?

This was all started by the West. Predominantly the US. Who are now fckd.

I just don't think you get it!!!

If these Japanese companies (provider of many jobs) decide to go and relocate in other countries then that is not going to be very good for the Thai's is it!!

You are being totally irrational in your response to these veiled threats, as that's what they are in truth. Maybe they are just bluffing in an effort to delay the implementation of the increased minimum wage.

Please tell me what option is better: 100,000 people earning nothing or 100,000 people earning 280 baht a day!!!!!

Most of these automobile manufacturers and computer related companies pay their employees more than this anyway. It is the abysmal handling of the floods that has been so damaging and of more concern to these international companies, with the delay in bringing in the 300 baht minimum wage a smoke screen to hide their dismay at their factories being flooded for weeks on end in essence.

[exeter]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

Well suddenly that greedy bastard was out of business because his biggest competitor moved to Cambodia three years ago, and overflowed the market with his cheaper products. You have no economic sense. Look at your home country. Those greedy bastards moved all production to China decades ago..

They will be moving to find the cheapest costs, that what business is all about, making a profit. Make it worth my while to stay or I am moving to a more favourable location.

Putting up wages with nothing in return is no good to a business man.

[Skywalker69]

Hun Sen must be laughing himself silly at the prospect. His investment in destabilizing Thailand is starting to pay off.

You beat me to it, exactily my thoughts as well.

[elcent]

Hun Sen must be laughing himself silly at the prospect. His investment in destabilizing Thailand is starting to pay off.

You beat me to it, exactily my thoughts as well.

yes, Thailand will get finally a culture Minister Arisaman. That's what he wants.

[huanga]

This government again showed its ignorant about economic system.You don't just raise salary to improve standard of living. You have to addvalue to the workforce before increasing their salary. If the workforce is thesame why should anyone give them more money? May be instead of trying to makepeople happy with empty promises, educate them to become more valuable andmarket will take care of the rest

Now they have to deal with unemployment

Hmmm.. let's see.

Raise the minimum wages (campaign promise) = more votes!

Raise the minimum wages = private sectors foot the bill!

Educate the workforce = government foot the bill.

With this government and its buffoons do you think they really care if this translates into unemployment?? That's the problem of tomorrow, as long as they are sabai sabai today!

Edited November 25, 2011 by huanga

[MrMuddle]

Seriously, is anyone surprised? I ran a company in Nongprue/Pattaya with the following problems which led me to suggest everyone NOT to invest in Thailand's economy:- brown outs and power cuts EVERY week- city water running unreliably; pressure varies and so does the quality- phone lines ongoingly down (they nick the copper wires); makes Fax obsolete yet is still used by many Thai sub-suppliers- internet is expensive, slow and also unreliable at times- labour protection act protects labourers; did you every try to sue staff who just walked out of the job and took company assets along?- red tape: ever tried to open an internet banking account and credit card swiping facility? I did and it took me seven godforsaken months - run a girlie bar; never a staff problem. Try to run a normal business with THB 10'000/monthly wage per staff, limited English? Forget it, the applicants give you the willies...... and so the story goesQuintessence was; I moved this business away to Cambodia. I pay the staff proper salaries and give them human housing and food. Never had staff problems, profits are considerably better than in Thailand and the government does not intervene in anything. Ah, and visa/work permit is a walk in the park compared to the LOS. So, yes, go and look around before sinking a lot of money into frustrating Thailand

Must say I agree with your assessment. If I wasn't settled with a Thai wife, I'd be long gone. I've been here over 12 years and things just get worse every year. The internet is an absolute joke. Where I live, any kind of serious thunderstorm, and the electric goes off, for hours at a time. I'd never start a business here, way too much hassle. Before too many more years, other local countries will start to overtake Thailand, and then leave it behind, all through mismanagement, and the sheer greed of the people who run things.

[roamer]

I've been saying for years it was only a matter of time before the circus packed its bags and moved, this was always going to happen.Higher wage bills and floods have only increased the impetus to move.

First it was the sewing machines, easy and cheap to move. Now the electronics. How long for the auto industry ?

Shame that successive governments have not been prepared to invest some of their much vaunted positive fiscal balance into education and training to meet the future.

Maybe this is good news for future flood management as these ghost town industrial developments once again become rice fields and Thailand reverts to being the agrarian economy it once was.

[elcent]

This government again showed its ignorant about economic system.You don't just raise salary to improve standard of living. You have to addvalue to the workforce before increasing their salary. If the workforce is thesame why should anyone give them more money? May be instead of trying to makepeople happy with empty promises, educate them to become more valuable andmarket will take care of the rest

Now they have to deal with unemployment

Hmmm.. let's see.

Raise the minimum wages (campaign promise) = more votes!

Raise the minimum wages = private sectors foot the bill!

Educate the workforce = government foot the bill.

With this government and its buffoons do you think they really care if this translates into unemployment?? That's the problem of tomorrow, as long as they are sabai sabai today!

99% of foreign companies pay double and more the minimum wages. It's only the local Thai industry that creates this stunt.

[Orac]

I've been saying for years it was only a matter of time before the circus packed its bags and moved, this was always going to happen.Higher wage bills and floods have only increased the impetus to move.

First it was the sewing machines, easy and cheap to move. Now the electronics. How long for the auto industry ?

Shame that successive governments have not been prepared to invest some of their much vaunted positive fiscal balance into education and training to meet the future.

Maybe this is good news for future flood management as these ghost town industrial developments once again become rice fields and Thailand reverts to being the agrarian economy it once was.

It certainly seems to be the way globalistation works - countries start with the textile trade which is fairly flexible and utilises virtually unskilled labour at cheap rates and gradually work their way up the value chain as the infrastructure and skill levels rise and the country develops. To be fair to Thailand the infrastructure is pretty good though they have to address the flood issue quickly. what Thailand has failed to address is the skills issue to a competitive level and also the legal/political frameworks needed to give international business the confidence it needs.

Cambodia is at the bottom of the tree still and lacks the infrastructure that the mid to high tech manufacturing levels need but it will not take it long to develop these. At the moment it is attracting businesses at the lower end which moved from Thailand some time ago - two large UK clothing importers I have worked with are relocating factories from Sri Lanka to Cambodia at present and also to Bangladesh.

One interesting thing that I heard in an interview with Philip Green yesterday, who is one of the leading UK figures in clothing retail, was that his clothing group, Arcardia, announced a 38 % drop in profits this year and also that they have moved some production back to the UK - maybe the poor performance of western currencies coupled with rising logistics cost, global financial instability and protectionist rhetoric could mean the end to the whole globalisation process as we know it.

[animatic]

People were no doubt saying the same thing when the businesses and factories were relocated to Thailand from wherever they were before.

Let's hope Cambodia benefits as much as Thailand has done.

They left Malaysia when the Idiot DR. didn't float the Ringut when all the other Asian countries did float their currencies on the open market.

I remember when post '97 S. E. Asia meant

Matahir Mohammed, Thaksin and Hun sen

An unholy trio of demagogues and strong men

railing at the west for all their own failings..

[KeyserSoze01]

Ahhhhhhhhwwww....will they not be making 10 Gazillion Dollars profit next year but only 9,5 due to the massive raise in wages?

It's really time to relocate!

Is there a place, where minimum wages are below 150 THB?

Where we can trample on the environment a little more, for less bribe money, so the "inspectors" look the other way?

Are there swampy wetlands elsewhere, where a flood normally runs out and just vanishes into the ground, that we could build a massive concrete structure on...and complain, if we get flooded again...although we bought the place for a handful of cash, got taxes lowered and...and...and...

If there is a parallel universe, these greedy b@stards would be hanging from a tree by their b@lls.

Well suddenly that greedy bastard was out of business because his biggest competitor moved to Cambodia three years ago, and overflowed the market with his cheaper products. You have no economic sense. Look at your home country. Those greedy bastards moved all production to China decades ago..

I am well aware of the REALITY, Professor! Thank you!

Does that make it any better?

Idealism is a wonderful thing, until it runs headlong into reality.

BTW, did your original sarcastic rant make you feel better?

[roamer]

I've been saying for years it was only a matter of time before the circus packed its bags and moved, this was always going to happen.Higher wage bills and floods have only increased the impetus to move.

First it was the sewing machines, easy and cheap to move. Now the electronics. How long for the auto industry ?

Shame that successive governments have not been prepared to invest some of their much vaunted positive fiscal balance into education and training to meet the future.

Maybe this is good news for future flood management as these ghost town industrial developments once again become rice fields and Thailand reverts to being the agrarian economy it once was.

It certainly seems to be the way globalistation works - countries start with the textile trade which is fairly flexible and utilises virtually unskilled labour at cheap rates and gradually work their way up the value chain as the infrastructure and skill levels rise and the country develops. To be fair to Thailand the infrastructure is pretty good though they have to address the flood issue quickly. what Thailand has failed to address is the skills issue to a competitive level and also the legal/political frameworks needed to give international business the confidence it needs.

Cambodia is at the bottom of the tree still and lacks the infrastructure that the mid to high tech manufacturing levels need but it will not take it long to develop these. At the moment it is attracting businesses at the lower end which moved from Thailand some time ago - two large UK clothing importers I have worked with are relocating factories from Sri Lanka to Cambodia at present and also to Bangladesh.

One interesting thing that I heard in an interview with Philip Green yesterday, who is one of the leading UK figures in clothing retail, was that his clothing group, Arcardia, announced a 38 % drop in profits this year and also that they have moved some production back to the UK - maybe the poor performance of western currencies coupled with rising logistics cost, global financial instability and protectionist rhetoric could mean the end to the whole globalisation process as we know it.

Yes, certainly more factors at play here than the respective colours of Thai governments. Very little forward vision whomever is in power. How long Thailand will hold on to existing foreign investors is one thing, attracting new investment now is a different ball game that I think they lack the ability to play. I think the danger now is the domino effect, so many of these manufacturing businesses have interwoven supply chains and as some of them inevitably relocate so will the satellite suppliers and so the cycle continues.

As for the flood management, its hard to think of any measures that could be put in place quick enough to prevent insurance costs rising to the point where for many companies Thailand is too expensive to do business in.

[nikster]

Hun Sen must be laughing himself silly at the prospect. His investment in destabilizing Thailand is starting to pay off.

No need for Hun Sen to do anything, Thailand has accomplished that all by itself!

Well - he had to restrain himself and not start killing people again. But other than that, yeah all he had to do was sit and watch Thailand self-destruct...

That said - if some are relocating they probably would have anyway; this is just a good excuse to do it. It's also a good way of putting the stick in the window and tell the Thai government to not raise minimum wages, and to fix the flooding that gets worse every year. You can't control the weather but getting floods under control isn't rocket science. I mean really this sounds like BS to me.

[Gary A]

I think that most of the international companies already pay more than 300 baht per day. I am somewhat familiar with Seagate and know for a fact that they pay quite well as compared to Thai companies.

[elcent]

True to form, the Thaksin haters have only criticism and no solutions to offer. With the exception of Ricardo who has posted reasonably and intelligently, all others just want to hang Thaksin high and dry, something which of course we know will never happen. This continuing stance will ensure that there will be no reconciliation whatsoever.

I expected more from the farang brigade, whether you are anti-T or not. We farangs pride ourselves on being part of the solution and not part of the problem but I guess the majority of the posters here form the minority of westerners.

I personally don't think it is a matter of hate...it is more the operation of the laws of the land. Thaksin has been found guilty and convicted of certain crimes. He's been sentanced to 2 years imprisonment but has so far managed to avoid even one day incarcaration having exiled himself. So what kind of reconciliation is it that would allow him to permanently, by way of amnesty, pardon, act of parliament, whatever, avoid punishment. Doesn't that show that there is one set of laws for him and another set for everybody else. Is that justice? Is that a way to go forward? I don't think so.

If he serves his punishment who suffers..only him...not those that support him...so why not just let the law of the land apply to him as it would everybody else. Who does he think he is to get special treatment...GOD...personally I would spell that backwards....

I agree in principle with what you are saying. However, the fact remains that Thaksin, like it or not, is a special case. Claims that the charges against him are politically motivated are not unfounded, to the extent that some countries, notably Japan and Germany(?) were happy to welcome him immediately on PT assuming power.

The current standoff is no way to go forward. Will Thaksin serve any jail time? Unlikely. So something has to give and common sense says that it would have to be the least of all evils. Once again, drop mention of jail - this is not going to happen. so what else is left?

He's not a special case and the crime charges that are waiting for him has nothing to do with politics, unless you mean in politics crime doesn't matter.

The stand off will be over soon. Lists are written in the book of life. In his position, or in that what he was, it is even more serious to break the laws to the expenses of the population on such a big scale. He's avoiding justice by trying to bring the country down completely.

[theblether]

Send them to Burma, a few years ago the wage for some girls carving designs into laquer ware was 35 cents a day US plus board and room. The daily wage for a road worker was 70 cents a day no room and board. It may make good economic sense for companies to move for lower wages but it doesn't make it right morally or other wise.

In due time they will have exhausted all of the low paying countries and then what will they do.

Absolute nonsense, there will be another 2 billion people born into the poorer economies in the next 40 years, if you think there will be a shortage of cheap labour your barking up the wrong tree.

[konaboy]

Hun Sen must be laughing himself silly at the prospect. His investment in destabilizing Thailand is starting to pay off.

No need for Hun Sen to do anything, Thailand has accomplished that all by itself!

Well - he had to restrain himself and not start killing people again. But other than that, yeah all he had to do was sit and watch Thailand self-destruct...

That said - if some are relocating they probably would have anyway; this is just a good excuse to do it. It's also a good way of putting the stick in the window and tell the Thai government to not raise minimum wages, and to fix the flooding that gets worse every year. You can't control the weather but getting floods under control isn't rocket science. I mean really this sounds like BS to me.

Good news!! With all the Japanese Companies re-locating to PP there will be more Karaoke bars etc--Yipee!!

[ralphlsasser]

PTP are not solely to blame, it is simple economics.

Cambodia offers an attractive package for investors, while Thailand remains crippled by domestic crisis.

And corruption.

[ralphlsasser]

"Morals and exploitation" - the catchwords used by failed businessmen to condemn those businesses that have succeeded by being smarter.

It's the same cheap labour that made the computer you are typing your posts on.

The same labour that allows you to afford to buy your shoes, your clothes, your iPOD and your TV.

Your beef should not be with these smart companies.

They are been wooed by all the Asian countries with incentives and tax breaks to help increase employment, skills and drag their economies up a few notches. It's the reality of the world we live in - competition and economics....and soon Thailand is going to understand just what those 2 words really mean in the harshest way possible.

Morales?? :cheesy: In Thailand?? :cheesy: