Japanese manufacturing giant Sony Electronics Malaysia today denied that it is embarking on a retrenchment exercise leading to closure with a voluntary separation scheme (VSS) for its employees offered early this month.

The companys corporate affairs and communication division manager Rosli Mohd Ghazali said certain quarters have panicked and thought the company was about to close down or shift elsewhere.

It is not so. People dont realise that when they spread the rumours it not only affects Sony, but it will also affect many of our sub-contractors, Rosli told malaysiakini.

Rosli said the company has plans to shift focus from high volume manufacturing to high value-added engineering, hence requiring the phasing out of some employees.

He said the company would be incorporating new technologies and embracing more engineering-based skills.

New challenges

In line with this, and having considered all possible options to optimise manpower utilisation, Sony will offer an opportunity to employees who have gained skills and knowledge to participate in the voluntary separation scheme, said Rosli.

As it is voluntary in nature and attractively packaged, the management views it as a harmonious way of providing an excellent opportunity for employees to seek new challenges, he said in a statement also issued today.

The VSS scheme is said to affect some 5,000 employees, including supervisors, officers and managers. Sony Electronics Malaysia employs about 10,000 workers, half of whom are production operators. The company presently has about 20 expatriate staff who are above managerial levels.

In an immediate response, Penang state executive councillor Toh Kin Woon said he was still awaiting for a full report on the matter.

Toh said prior to this, about 20 companies in the islands Free Trade Zone had either closed down or moved away to other countries where skilled labour and operating costs are cheaper.

Penang at crossroads

He said Penang is currently at a crossroads and needs to be more focused on the kind of economic fields that will benefit the islands population.

We really have to be more focused on improving techonlogy. We are already phasing out intake of foreign labour who have supplied skilled labour for the country at a low price. This did not create an incentive for the companies to automate or retrain workers, he told malaysiakini.

Toh said Penang was looking at other options such as bio-technology, consumer services and tourism to boost its economy.

He said medical and education services were other potential markets for Penang as the state has developed rather efficient and high quality hospitals and education centres.

He added that Penang currently had 11 private hospitals and 15 private institutions of higher learning.