Government Claims to Delay Relocation of Automotive Factory to Vietnam, Threat of Layoffs Successfully Relieved

JAKARTA - The government claims to have succeeded in delaying the relocation plans of two automotive companies from Indonesia to Vietnam. This step is considered one of the initial results of mitigation efforts to prevent large-scale layoffs.

The Minister of State Secretary Prasetyo Hadi said the report was obtained from a team that went directly to the field to monitor the company's condition.

"For the time being, the relocation plan can be postponed. We hope that the relocation to Vietnam will not happen," said Prasetyo at the Parliament Complex, Jakarta, Friday, June 26.

According to Prasetyo, this case shows the importance of early detection of companies that face problems before the decision to relocate or lay off is actually taken.

Prasetyo explained that the decision to relocate did not arise from one cause. In the case of the automotive company, the decision is in the hands of the principal or investor who wants to reduce or move his investment to another country.

Therefore, the government does not use one pattern of settlement for all companies. Each case is mapped based on the root of the problem.

He said the current threat of layoffs was also influenced by various factors. One of them is the disruption of raw material supply which is also affected by global economic conditions and geopolitical developments.

On the other hand, there are technical problems in the country. For example, the supply of industrial gas in several areas of West Java has technical problems, while the supply in East Java and Central Java is relatively not problematic because the source of the raw materials is different.

The government, said Prasetyo, continues to map the problem together with the Industrialization and Industrialization Task Force, the Ministry of Industry, and the Ministry of Trade.

This step was taken to reduce the industry's dependence on imported raw materials while strengthening domestic supplies.

According to Prasetyo, the sooner the potential problems are detected, the greater the opportunity for the government to find a way out before it ends in the relocation of investments or the termination of employment.