Dr Iain Corness
The Automotive Focus Group (AFG) invited representatives from
General Motors and Ford to address the members on the subject of “Thailand
outlook for the auto industry in 2010 and beyond.”
Frank
Holzer from GM talks about the need for political stability in this country
and the need to develop and educate the workforce.
Frank Holzer, a genial GM style Aussie was the first speaker, but
unfortunately Reiko Webster from Ford got lost and arrived a little late, so
her address will be deferred to another meeting of the AFG group. (It really
is time that FoMoCo had Satnav as standard equipment!)
Frank Holzer began his very ‘frank’ address by stating that the current
problems are actually future problems, so we (and GM) are not out of the
woods yet. He cited the global economic crisis, international business
issues and Thailand’s political issues all as factors which resulted in GM
seeing a 59 percent drop in sales year on year.
Factors affecting the bottom line included wages which have doubled over 10
years, and he felt that government intervention was needed in the area of
wage control, otherwise Thailand would lose its pricing competitiveness.
He saw the need for all businesses, not just GM, to have sound fiscal
policies which would allow for rapid restructuring when necessary and said
that outsourcing did not allow for quick action and is a fixed cost to the
manufacturer. A cost that perhaps the parent company cannot sustain in times
of economic woes. He also said that corporations have to understand that
maintenance of ‘market share’ does not necessarily mean maintenance of
‘profitability’. The pennies have to be counted.
He stated that in the auto industry, keeping large stocks to supply dealers
was no longer a viable plan, and ‘build to order’ was much more financially
appropriate.
Domestic recovery is expected by 2011, with the one tonne pick-up market
still dominant in domestic sales, but the export market will be driven by
small, fuel-efficient cars.
In his summation he mentioned the need for political stability in this
country and the need to develop and educate the workforce, otherwise China,
India, Malaysia, and Indonesia will take over Thailand’s (tenuous) hold on
being the ‘Detroit of Asia’.
