Is Selangor No Longer Attractive Economically Or Is The State Government All Talk Cock?

It is a Ramadan and a bleak Syawal for the former workers of JVC Kenwood at Section 22 Shah Alam as the factory ceases its operations as reported by The Rakyat Post above.  I am sure the decision to cease operations must have been made much earlier than just a few months or a year ago as any plant closure affects production as well as support services.

Many were too quick to blame the Federal Government as according to them investments come under the purview of the Federal Government. Many however forget that investments in a state comes under the purview of the respective states’ economic development council or committee. 

Does the seemingly bleak economy (despite the A- rating by Fitch) have any role in the closure of the plant? Let us examine:

Now it seems that TASCO had come into a sales and purchase agreement with JVC Manufacturing Malaysia Sdm Bhd for the purchase of the said property in 2009. This is a year after Pakatan Rakyat took over the state from Barisan Nasional. Six years on, it seems as if the Selangor SEDC had done nothing to persuade JVC to maintain a plant in Selangor. Why so?

It is easy to put the blame on the Federal Government. However, JVC has been cutting back its workforce not just in Malaysia but worldwide.

“They told us that the factory operations were moving to Thailand,” said a worker.

It was reported last year that JVC had cut its workforce globally by 14% to just under 20,000 people and about 90% of production now took place mostly in Indonesia and Malaysia.

Checks on have shown that JVC is still hiring staff for its Tampoi plant in Johor.

Similarly, a few metres away from the JVC plant, Ansell Malaysia Sdn Bhd’s operations have also ceased and its workers were retrenched yesterday. The Australian company made healthcare protective gear.

A worker on site said: “They are moving their operations to Melaka. They have already told us about this six months ago and compensation was also paid out.”

Therefore, we are seeing a move out of Selangor not just by JVC but also by other foreign companies as well, unless Melaka and Johor are not in Malaysia, or that these states are not affected by the “slowdown” in the Malaysian economy. 

Maybe it is the hard work that Johor’s and Melaka’s SEDC have put in to ensure that foreign companies do not divest, unlike Selangor’s that was not able to or did not talk to JVC when the sales and purchase agreement was made six years ago.

Maybe Selangor has lost the edge it once had when it was still governed by Barisan Nasional.