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Maricar Cinco, Southern Luzon Bureau
Inquirer.net

MANILA, Philippines—All it took was a slip of paper.

That determined whether a worker goes or stays, at least for now.

It will tell if the worker is “Intel inside.”

The workers have awaited the handing out of the half-sheet of paper since Intel Corp., a US-based microchip company, announced on Jan. 22 that it would shut down this year its plant in Cavite province because of the sharp drop in global demand for its products.

Rodel Escopete, 40, a technician at the plant for the past 13 years, awaited his fate during his shift Wednesday night as the company started to “identify” the second batch of workers to be laid off.

At press time, he said he and his wife, a machine operator, received the piece of paper saying that they would be laid off in the second batch.

The paper read: “As previously communicated, WW06 [work week 6] is the week employees will be notified about Phase 2 people movement in Intel Cavite. Please proceed to Room …”

The Escopetes were among some 200 workers on the night shift who were told that their last day would be on April 30. Hours before, some 200 workers on the day shift received the same bad news.

Relieved

“I have mixed feelings,” he said when asked how he felt about the news. “It’s a sudden change,” Escopete said. He said he also felt “relieved” that it was over.

In the room where the workers were told to proceed, Mike Wentling, general manager of Intel Cavite, held a PowerPoint presentation which showed the training program that the company would provide to the laid off workers and their separation pay package, according to Escopete.

On Thursday, another group (a second set of day and night shift workers) will be waiting as anxious as the Escopetes couple, for that slip of paper.

Cooking, call centers

From this day until his last day in the company, Escopete said he would still participate in the production while attending a training program on call centers, cooking and other skills. He said the company hired trainers to prepare the workers for transition to other jobs.

The company will also offer an “early move-out offer” for those who want to skip the two-month transition training.

Of the 4,000 workers last year, fewer than 3,000 remain, Escopete said.

Two years ago, there were 6,000 people working in the two buildings on the Intel Campus in General Trias, Cavite, according to Escopete. The other workers in one building were absorbed by a new company in which Intel is an investor.

Escopete said that as early as the second quarter of 2008, workers had already noticed a 40-percent to 60-percent reduction in their workload.

News went around that the company was relocating to another site since the present building was no longer “physically safe.”

“It was a false hope,” Escopete said because by the fourth quarter of the year, the manufacturing that originally included microprocessors and flash drives was reduced to only motherboard chip sets.

First phase

“Phase one (first batch of retrenchment) was announced in October and the last day (of work of the batch) was on Dec. 31,” he said.

He said that about 50 percent of the company’s direct labor, including technicians and machine operators, was among those listed in Phase 1. Managers accounted for 30 percent of the batch.

“What we were expecting was (only) a reduction in head count that will happen by late 2009 or early 2010,” he said.

Surprised

The technician said the workers were surprised on the day the company confirmed the shutdown of the plant.

They have “no idea” how the company identifies who will be let go next.

After the second phase was set to be announced Wednesday, they are expecting Phase 3 by the third quarter of 2009 and the “de-installing” of machines by June.

Escopete said there would be a four-week temporary shutdown, with the first two weeks to take place in late February.

Job hunt

Escopete earns P20,000 to P25,000 a month, while his wife receives P15,000 to P18,000.

They were able to buy a house and a motorcycle out of their monthly income.

“(I will) wait and see,” said Escopete when asked about his plans after the company lays him off. He said he would probably look for a job in another electronics company or in the call centers.

“Some (employees) here, already wanted to be “identified” (in the phasing),” he said.

He heard that the company was offering a good package of “multiplier” (separation pay), tax incentives, and bonuses to its employees.

Getting worse

Escopete believed the company when it said that the global economic crisis was the reason he was about to lose his job.

He said he had been hearing similar cases in other semiconductor companies in Cavite.

“The situation is admittedly getting worse very fast and the case of Intel is just one case among many,” Merly Grafe, chair of the Solidarity of Cavite Workers (SCW), said in a statement.

The group said that on Jan. 29, Taiwanese-owned Dyna Image Corp. Philippines announced it would retrench some 200 workers who would be with the company for two years by February.

Ricardo Martinez Sr., regional director of the Department of Labor and Employment-Calabarzon, earlier said that the electronics sector or the export industry in general was the most affected by the crisis.

Modified work schedules

He said the labor department was trying to appeal to companies to modify the work schedules first before resorting to retrenchment.

The modified work schedule, from six days down to only five or four days a week, was the most rampant scheme of the companies, he said.

Data from the labor department showed that 14,000 workers in Calabarzon were laid off, while 19,000 workers were affected by the fewer work hours from October 2008 till late January this year.

Up to 300,000 workers in export-oriented industries may lose their job in the first half of the year, according to Labor Secretary Marianito Roque.

At the beginning of the 7 p.m. evening shift of Team 2, he said about 200 of them were given the white envelope stating that their last day of work would be on April 30.

He said the Phase 3 will be announced on April 1 who will be reporting until June, and the last batch to de-install the machines will be reporting only until the third quarter of the year. It will be “zero employee” by then, he said.

Dale G. Israel
Cebu Daily News

Picketing former employees of Giardini del Sole Wooden Furniture Inc. yesterday agreed not to block the entry of those still employed by the company into the firm’s factory in barangay Alang-Alang, Mandaue City.

In exchange, the management of Giardini del Sole promised to give the retrenched workers their separation pay and back wages.

The agreement was reached at the office of Mayor Jonas Cortes, who, along with Department of Labor and Employment in Central Visayas (DOLE-7) director Elias Cayanong, mediated between the retrenched workers and Giardini del Sole management.

“We are scheduled to meet again this Friday. We don’t know yet how much (the retrenched workers) will be paid or when,” said Primitivo Ginoo, president of the company’s workers’ union.

Yesterday’s private meeting lasted more than two hours. It was the culmination of a day that started with a picket by retrenched workers outside the Giardini del Sole gates.

Giovanni Boschi, owner of Giardini del Sole, sought City Hall’s intervention after picketing members of the Nagkahiusang Pwersa ng Mamumuo sa Giardini allegedly prevented employees from entering the factory.

Mayor Cortes and City Hall staff arrived and herded the retrenched workers, company employees and management into buses so that they could meet in the mayor’s office.

Early afternoon, Cortes first met with the retrenched workers and union members. Later, Cayanong arrived and joined the meeting. Later, it was management’s turn to talk with Cortes.

By around 2:30, management, retrenched workers, union members and Cayanong all met at the mayor’s office.

Kristine L. Alave
Philippine Daily Inquirer

MANILA Philippines—The Labor department will conduct surveys and meetings with companies in export zones next month to gain a full picture of how the global credit squeeze affects them and to craft a plan to help their workers.

This was disclosed recently by Labor Secretary Marianito Roque, who noted that the Labor department is closely monitoring the employment situation in the export zones.

“The export industry is definitely affected because it is dependent on credit,” Roque said.

“We are going to talk to locators and see who are vulnerable. We are concerned about the Taiwanese and Korean locators,” he added.

Both Taiwan and South Korea are export-oriented economies that were heavily battered by the global economic meltdown.

He noted that he had already ordered his regional directors to make arrangements with locators and draft initial reports.

Recently, Texas Instrument, the world’s leading chip manufacturer laid off 400 workers due to reduced orders from the overseas market. Roque said the company has promised them to take back the workers once orders pour in.

Labor groups also said export zones in Cavite and Cebu have started to cut down working hours and lay off hundreds of workers because of slow down in demand from United States and Europe, their traditional markets that were crippled by the financial crunch.

Many of the companies that have shed workers and production hours belong to the semiconductor and garment industries.

Asked on the total figure of the workers that have been laid off from the export zones, Roque said DOLE has no official number yet.

He said it will depend on the reports from the January meetings and surveys.

Roque said he is not alarmed by the reports of mass retrenchment, although he admitted that there would be more job losses as the worldwide recession deepens.

But Roque said a significant rise in unemployment would be unlikely as it would mean that the pump priming initiatives in major economies have failed.

“There will be job losses. I would be lying if I say there won’t be any. But it is not massive,” Roque said.

Roque also noted that non-export oriented and local industries will not be severely affected by the recession.

“The local industries catering to local market won’t have any problems because it is cash-based,” the Labor chief explained.

Although employment in the construction sector slowed down, Roque said new jobs were created in the retailing sector.

Ronnel Domingo
Philippine Daily Inquirer

MANILA, Philippines – Toledo Mining Corp. said it had laid off some 600 workers and contractors while some directors took pay cuts as dampened demand took its toll on nickel operations in the Philippines.

According to an industry source, the 600 workers comprise 90 percent of the company’s workforce at the Berong nickel mine in Palawan.

TMC has a 56.1-percent stake in the Berong nickel project, which it shares with partners Atlas Consolidated Mining and Development Corp. and European Nickel Plc.

In an interim report covering six months to September, company chair Reginald Eccles said the management resolved “to manage the company’s assets on the presumption of an extended period of poor demand and low nickel prices.”

“The remaining staff in the Philippines now comprise a core team of sufficient skill mix to manage our nickel resources, to maintain the Berong mine and plant in good order and, very importantly, to convert the MOUs with Jiangxi into legally binding agreements and advance value added processing trials,” Eccles said.

The Berong partners have entered into memorandums of understanding with China’s Jiangxi Rare Earth and Rare Metals Tungsten Group Co. Ltd., mainly to finance and build a jointly owned nickel processing plant.

Also, Eccles said, TMC’s four non-executive directors have agreed to a 20-percent reduction in fees “as a demonstration of support for these harsh but essential cost-cutting measure.”

He said that the period April to September was Berong mine’s best in terms of record ore production, volume sales and progress in on-site ore processing.

However, these months were also the “worst because of the precipitous decline in Chinese demand for direct shipping ore, and a near halving in the Cash LME (London Metal Exchange) nickel price.”

Eccles said the price dropped to $15,750 per ton by end-September from $30,000 at the start of April.

“The price has continued to decline … to approximately $10,000 per ton (in December),” he added.

In the period under review, Berong mine shipped 370,355 wet metric tons (WMT) of laterite nickel ore at an average grade of 1.53 percent to customers in China and Australia. It was 5 percent higher than deliveries made in the same period in 2007.

The volume of ore mined reached 547,001 WMT, while ore inventories stockpiled at the end of September amounted to 323,115 tons.

Some two-thirds of the stockpile had been earmarked for delivery to BHP Billiton’s refinery in Australia under a long term supply agreement.

“The collapse in the nickel market occurred at a time when nickel inventories at Berong were being accumulated ahead of the scheduled operational shutdown from late October to end February, when offshore transshipment is impractical because of rough seas,” Eccles said.

Julie Alipala, Nestor P. Burgos Jr., Mindanao Bureau, Visayas Bureau
Inquirer

ZAMBOANGA CITY – Some 50,000 workers were thrown out of jobs as 14 companies in Western Mindanao engaged in fishing and canning either closed shop or downsized their operations because of high fuel costs.

Eugene Yap, vice president and spokesman of the Southern Phils Deep Sea Fishing [Sophil], said 14 of Sophil’s member companies either stopped production or reduced their labor force.

Yap said fuel costs eat up about 70 percent of the companies’ operations expenses.

“Majority of the members of Sophil have started to halt (their) operations due to mounting operational losses,” Yap said in a phone interview.

“Some members, if not all, have halted their fishing operations since July 26.”

The fishery sector, according to Yap, is fuel and labor intensive. Sophil maintains more than 300 fishing vessels, each having a capacity of 60 tons of sardines.

“We are feeling the heavy strain since fuel prices have doubled in the last few months,” Yap said.

“This includes other factors such as increasing labor cost, taxes on imported fishing equipment and monetary inflation while selling of prices of fish have remained stagnant,” he said.

Sardinella, or sardines, cost P22 per kilogram in the past months. Fuel price increases pushed sardine prices up to P25 per kg, prompting canneries to stop buying.

Sophil’s member companies produce canned sardines like Family, Mega, Ligo, 555-Century, Paradiso, Mico, Youngstown and Kingstown. Canned sardines cost P10 to P10.50 each.

“If we go on operating without intervention from the government, it’s either we increase the price of sardines or decide to shut down our operation. That would mean importing sardines from other countries,” Yap said.

The YL Fishing Company, Yap said, has 36 fishing vessels, with each vessel consuming about 15,000 liters of fuel a day.

“Before, we enjoyed P45 per liter of diesel, now it’s P59.25 per liter. High fuel cost really kills the industry,” Yap said.

One of the biggest fishing boat owners in Iloilo City grounded his vessels in protest of President Macapagal-Arroyo’s decision to stick to E-VAT.

Arnaldo Borres Jr., owner of the Jumbo Fishing Corp., said he kept at least 30 of his boats at port in protest of E-VAT.
“It’s our way of showing what we feel because our appeals have fallen on deaf ears,” Borres said.

“She [Ms Arroyo] tells us that government will continue to collect VAT so she can spend for the poor. But the ones they are taxing are getting impoverished. It’s like milking the cow to the death,” he said.

Borres said he decided to suspend operations because he keeps incurring millions of pesos in losses.

He said his vessels use at least 300,000 liters of fuel per month.

“We pay P1.8 million per month for VAT alone for the fuel we use. It’s too much for us,” Borres said.

Mayen Jaymalin
Philippine Star

An average of 113 Filipino workers are retrenched daily from their employment due to closures of commercial establishments, the Department of Labor and Employment (DOLE) reported yesterday.

Data from the DOLE-Bureau of Labor and Employment Statistics (BLES) showed that a total of 20,478 workers or a daily average of 113 workers were displaced due to closures of commercial firms in 2007.

BLES recorded a total of 1,363 commercial establishments nationwide closing down in the first half of 2007 allegedly due to economic difficulty.

The bulk of the displaced workers were from the National Capital Region (NCR) where 940 companies closed down affecting 10,397 workers.

In the past two years, NCR also accounted for the biggest number of firms that closed shop and retrenched over 30,000 workers.

DOLE records, however, indicated that the number of displaced workers in the first half of 2007 was way below the figures for the past two years.

In 2006, BLES recorded a total of 59,376 workers displaced or a daily average of 164 while a total of 57,594 workers were affected by closures and retrenchment in year 2005.

Common reasons cited for closures and retrenchments were lack of market, slump in demand, downsizing, redundancy and financial losses.

However, the DOLE reported that more workers are now getting rightful wages and experiencing better conditions.

The BLES showed that an increasing number of commercial firms are complying with the minimum wage law.

According to the data, 84.2 percent of the over 18,000 commercial establishments inspected nationwide are paying their workers the right wages.

The 2007 minimum wage compliance rate was higher than the recorded 82.6 percent compliance rate in 2006 and 81.3 percent in 2005.

DOLE earlier admitted that the minimum wage law is the most violated among the different labor standards, particularly in NCR.

But labor officials said fewer companies have violated the law since DOLE intensified its inspection in July 2007.

DOLE implemented the Labor Standards Enforcement Framework-Inspection Blitz project to check compliance of establishments with core labor standards nationwide.

Under the project, teams of DOLE inspectors visit all establishments in a particular area before moving on to other places in blitzkrieg style to cover more establishments in a much shorter period of time.

Zinnia B. Dela Peña
Philippine Star

Levi Strauss & Co., one of the world’s top and oldest jeans maker, announced it is shutting down its plant in the Philippines effective Aug. 1, 2008.  The closing will affect 257 employees.

Ramon Martelino, Levi Strauss Philippines country manager, said the closure of the cut-and-sew apparel plant will allow the group to focus on its core competency of marketing its branded products in Asia and in line with the group’s overall global strategy to further grow its business in the region.

“Levi Strauss & Co. regards the Philippines as a key market here in Asia Pacific. This move reaffirms our marketing presence as we remain committed to bringing premium quality, branded Levi’s® and Dockers® products as well as innovative marketing programs to both our customers and consumers,” Martelino noted.

The plant was established in 1972 to produce Levi’s® jeans for the local and Asian markets.

Industry observers said Levi’s has been struggling to arrest declining sales for the past decade due to its inability to keep up with fickle fashion tastes and match the lower prices of rivals.

As sales dropped, Levi’s had closed some of its US factories to give it more pricing flexibility and ease its financial pain as less revenue trickled into the company.

Martelino said that with the closure of the plant, Levi Strauss Philippines will just outsource its products from  selected contractors in Asia.

He said Levi Strauss Philippines will continue to have a significant presence in the country through its commercial business, retailing branded apparel in major cities through a large franchised retail distribution network.

“This has been a very difficult decision for us. We have examined comprehensively all other options, including cost containment and improving the efficiency and productivity of this plant as first options. Unfortunately, such measures cannot overcome the significantly lower costs of outsourcing,” Martelino explained.

Martelino, however, pointed out that the group’s decision had nothing to do with the slowdown in the US economy.  He also said that the local business has been growing but did not say by how much.

Ira Karen Apanay
Manila Times

A Filipino company that provides livelihood for 3,000 farmers and competes with China for the supply of tomato paste to multinational fast-food restaurants is in danger of losing its edge—or even closing.

Northern Foods Corp. (NFC) is financially strapped, its chairman, Bernardo “Jojo” Mitra, told The Manila Times, adding that the company has put in a request for P190 million in November 2007 with the Agricultural Competitiveness Enhancement Fund (ACEF).

“We need a new plant,” said Mitra, also the administrator and chief executive officer of Livelihood Corp. (Livecor). “Our plant is so old. We cannot compete with importers from China.”

The 25-year-old tomato paste processing plant needs to be replaced with a new and globally competitive facility to be able to compete with foreign importers of tomato paste, particularly those from China, Mitra explained.

Northern Foods has had to make do for some time now, he told The Times. Present management was able to arrest declining sales from 2003 to 2005, and sales increased in 2007 to P154 million, the highest in the history of Northern Foods, he said.

The Agricultural Competitiveness Enhancement Fund has a P6.6-billion fund and is appropriated to support local agricultural sectors harmfully affected by importation. It finances agricultural researches, study grants and scholarships, and advanced post-harvest equipment.

Northern Foods now supplies tomato paste to 37 companies, including Jollibee, McDonald’s, KFC and Mister Donut for the fast-food restaurants, and Unilever, Del Monte (Philippines), Nestlé Phils. Inc., Heinz (of UFC Phils. Inc.), San Miguel Foods Corp./Purefoods Poultry, Purefoods (of Hormel), Hunt’s (of Universal Robina Corp.), Monde Nissin, for sauce and ketchup manufacturers.

“Sales for the calendar year 2007 is expected to reach 3,816 metric tons or an increase of 19.36 percent from previous year,” according to documents supplied to The Times. Northern Foods has a 10-percent surplus production from the targeted 3,000 metric tons for 2007, the records also say.

“Average selling price for each calendar year [2006 and 2007] was also able to increase by present management by 16 percent from year 2005 as a result of strategic marketing,” the market performance report also said.

Mitra took over Northern Foods Corp. in 2001 when it was “losing heavily.” The company is owned by the Livecor and by virtue of Executive Order 223, is now an attached agency of the Department of Agriculture.

Northern Foods manufactures tomato paste and sources out its raw materials from 3,000 Ilocano farmers who annually enter into a contract-growing agreement with the company.

The company’s processing plant, located at Barangay San Joaquin, Sarrat, Ilocos Norte, was designed, manufactured and installed by the Franrica Manufacturing Corp., an American company. Northern Foods has a capacity of 500 tons of fresh fruits a day and produces an average of 4,500 metric tons of tomato paste every processing season.

Mitra said Northern Foods supplies 25 percent of the 15,000 metric tons of tomato paste consumed in the Philippines every year. Before the company started, the country imported all its tomato paste from several countries, including Taiwan and the United States.

DA wants locals to take over

Agriculture Secretary Arthur Yap said he wants the local government of Ilocos Norte to take over Northern Foods, although, he still have to discuss the matter with officials there.

When asked about the 3,000 contract growers that may eventually lose their source of income if the plant closed down, Yap said that is the reason why he wants to talk with local officials.

Ilocos farmers plant an average of 850 hectares of tomatoes, which they harvest from mid-January to mid-May and sold exclusively to Northern Foods.

Yap added that the tomato-paste company is losing badly, and he wants the Agriculture department to move out of that business.