Reallocation of CARS incentives sought

A group of automotive workers has asked the government to reallocate a portion of the multibillion worth of tax perks granted to participants in the tax incentivedriven Comprehensive Automotive Resurgence Strategy (CARS) Program as part of social amelioration program for laid off automotive employees.

Philippine Metalworkers’ Alliance (PMA) National President Ruel Punzalan said that Mitsubishi Motors Philippines Corp. (MMPC), one of the two CARS Program participants, the other being Toyota Motor Philippines Corp., has been laying off workers since 2018.

In a statement, the PMA said that MMPC had already terminated 400 workers in 2018 even as the company enjoyed the subsidy under the CARS program. According to Punzalan, the Japaneseowned company is implementing another wave of termination effective November 9. Some 100 workers have already notified last Oct. 16 of their impending retrenchments.

“What’s the point of giving incentives to automotive manufacturers when they will lay off workers anyway,” said Punzalan in a statement.

Under the CARS Program, created under the auspices of EO 182, government will support the CARS Program participants to the tune of R9 billion each, in exchange for “new investments in Body Shell Assembly and Large Plastic Parts Assemblies,” production of “no lower than two hundred thousand (200,000) vehicles” with “impact on the parts manufacturing industry and linkages, jobs generation, and overall consumer welfare.”

PMA has urged that these displaced workers should be paid their monthly salary from the tax perks that MMPC would be getting from the CARS program. If these workers are receiving say R30,000 a monthly, they will be paid that same amount until such that they are rehired. Punzalan said that MMPC has promised to rehire the laid off workers after six months.

The labor union has already met with Trade and Industry Secretary Ramon M. Lopez, who took note of their proposal.

“To start repairing the injustice, allocating a portion of the budget for the CARS Program to provide social amelioration to those already displaced would be a good start,” Punzalan said.

Thus, the PMA urges the government to carefully consider the employment implications of granting reprieve to CARS beneficiaries. Otherwise, granting such reprieve will only incentivize car manufacturers to pursue mass termination of workers, encourage reliance on imports, and defeat the objectives of making domestic car production competitive.

PMA, which is composed of 5,000 direct workers in the automotive, electronics, steel and iron sectors, even noted that layoff in the industry continued even as the demand for vehicles gradually recover.