Rumours of Yazaki pull-out has

Business

Rumours of Yazaki pull-out has Samoan government worried

By Chris Peteru

THE sign on the sides of the yellow and pink buses, contracted to carry hundreds of Samoan fac tory workers daily, is pointed: “Serve your Yazaki Samoa”.

Hailed by government as the country’s economic saviour and biggest private sec tor employer, Yazaki may now be looking to take its automotive wire harnessing

operation elsewhere.

This follows problems at its Vitele fac tory, minutes from the capital Apia, and the Asian currency crisis. News the Japanese based multi-national, which landed in Samoa six years ago, was having second thoughts, took the public by surprise when Trade secretary Chan Tung made the announcement.

“It is much cheaper to produce wire harnesses in Indonesia, the Philippines and Thailand compared to having the harnesses (made) in Samoa. That is a concern,” Chan Tung said. “So there is still a possibility Yazaki might decide to scale down its operations or shut down altogether in Samoa and that is a threat to us.”

Recently appointed chief executive Mr Yasuo Oishi declined to comment, but the company, which has dozens of factories scattered around the planet, moved to allay fears - at least for the time being.

“It’s difficult with the downturn in Asia.

We don’t know what will happen in future, but as far as we know, we are going to be here for quite some time,” says senior administration officer Muligatele Kelemete. “So while it’s important for us to look after this company, at the same time we’ve got to look at other factors, like the economic downturn in Asia,” he said.

“This company is Japanese owned.”

For a government which spent millions of taxpayer dollars to entice Yazaki to locate here, the possibility of a withdrawal is scary. Such has been the success of the company in boosting Samoa’s economic fortunes that it is commonly accepted that several more companies the size of Yazaki could flatten the estimated SUS 140 million

foreign debt in no time. Attracted by low labour costs, non-unionised labour and political stability, the light manufacturer was also given a 30-acre block of land, a factory, and later an extension built by government. Along with the usual tax breaks, they were allowed to occupy the premises rent-free. The estimated cost for those incentives is about SUSB million but government has been reluctant to divulge accurate figures.

Despite criticism of the expense to the taxpayer, authorities still believe it is a good deal. They point to the creation of 1500 jobs (mainly for women) plus 300 more in administration. Every month SUS 190,000 is paid out for salaries and local credit. Over the years Yazaki has earned more than all of Samoa’s other exports.

But unlike other societies, where the mention of redundancies is enough to send people into depression, the feeling on the factory floor is largely of indifference. The workforce has had a poor relationship with management from the beginning. Within months of starting up, a strike involving hundreds took place. Although it was resolved with a minimum amount of dis ruption, the rumblings over conditions have continued to reverberate.

“No-one really cares about this compa ny. Management treat us like slaves, so they can go to those countries in Asia and make them slaves. This is not a happy place to work,” says Silia, a line worker.

Employees stay on their feet, crimping and cutting wire during two eight-hour shifts.

Breaks are minimal, and a numbing three hour slog at day’s-end has increased com plaints.

Those with thoughts of climbing the career ladder saw their hopes plummet when most of the 100 section leaders, the first rung on the management ladder, were suddenly demoted to the line with pay cuts. Earlier plans to shut down the New Zealand plant and hire hundreds more Samoan workers have since been replaced by a sinking lid type employment policy.

Cuts on overtime mean most workers

earn SUS 22 for a 40-hour week, just above the minimum wage but not enough to keep up with inflation. “This is a multi-million dollar company, surely they can afford to do a little better than that,” says Su’a Sio, secretary of the National Union of Workers.

“Morale is low,” a supervisor at the firm said, “it’s affected the quality of the prod uct.” The government has sided with man agement to the point where Prime Minister Tofilau Eti Alesana and his cabinet have descended on the premises to encourage staff to work more industriously. Indeed, the Prime Minister has asserted there is no poverty in Samoa because of the jobs pro vided by the corporation.

There are vested interests in the form of lucrative contracts held by some govern ment MPs including labour minister Polataivao Schmidt, who has the only on site catering facility, and House speaker Toleafoa Faafisi who runs a fleet of buses transporting workers to the plant.

The company supplies harnesses for three major car makers: Toyota, Mitsubishi and General Motors. Between 30 to 40 containers are transported by sea every month. At one time or another, all three manufacturers have returned shipments of harnesses from the Australian assembly lines complaining they were sub-standard.

Kelemete says there were problems training villagers to adapt to an industrial culture. “In the beginning it was difficult, but now most of the supervisors know what the requirements are. Working with locals who have never worked in their lives made it difficult.”

Despite hiccups, production standards have improved. In November, the business picked up the internationally recognised QS9OOO certification designed by US auto giants GM, Ford and Chrysler. The approval seal meant the manufacturer was turning out a world class product, the only branch in Oceania to have the classifica tion.

Kelemete says, “Other big companies overseas are probably looking at how we would fare. If Yazaki is successful here, they can see potential, but if it goes down then I guess it gives a message to other companies as well”.

The real picture is that Samoa’s hard earned economic gains will quickly sour if the Japanese decide they have had enough.

If that happens, a financial disaster awaits. ■