Ford to close Philippine operations; suppliers call on government to encourage local manufacturing

After almost 13 years of manufacturing in the Philippines, Ford has decided to shut down its US$270 million vehicle assembly plant in Sta. Rosa, Laguna province, by the end of the year. Ford President for the ASEAN, Peter Fleet, said that the decision to close its manufacturing operations in the country was due in part to the lack of a supply base and the domestic market’s lack of economies of scale. Beginning in 2013, Ford will import cars into the Philippines; following the auto giant’s decision to close its plant, the Motor Vehicle Parts Makers Association of the Philippines (MVMAP) urged the government to encourage local carmakers to continue their manufacturing operations. MVMAP President Ferdi Raquelsantos explained that its member plants are currently operating at less than 50% of their capacity and assured that production could be ramped up if there were a demand. He said that the problem is not the lack of locally produced parts; rather, it has to do with the increase in imports of completely built cars from other countries, Thailand in particular. MVMAP urged the government to review the Motor Vehicle Development Program (MVDP), which gives emphasis to local manufacturing over foreign trade. The MVMAP issued a statement saying, “A firm decision must be made as to whether this should be scrapped altogether and be replaced with another one. If acceptable, then the proper implementing rules and regulations must be crafted for everyone’s benefit. What we want to see is a firm resolve on government’s part to put in place an MVDP that would provide fiscal and non-fiscal incentives not only to assemblers but to end users as well. It has to be one that will encourage local manufacturing rather than just trading.” (July 6, 2012)