More Bad News for Thailand Keeps Coming
I ran across a slew of bad news for Thailand:
First from the Wall Street Journal is news that Ford Motor Company plans on moving its operations in Thailand to China.
Ford Motor Co. confirmed Thursday it plans to move its Asia, Pacific and Africa regional headquarters to China from Thailand.
While the move will improve management efficiency, according to the auto maker, it also places Ford in what is becoming the biggest car market in the world. China is expected to surpass the U.S. this year in car sales.
Ford didn’t disclose which city has been selected, although published reports suggest Shanghai.
Thailand will continue to serve as the regional headquarters for Ford’s operations in Indonesia, Malaysia, Vietnam, Thailand and the Philippines, Ford spokeswoman Whitney Small said in a statement.
Ford Motor China reported sales of 306,306 vehicles in 2008. The company makes the Ford Fiesta and Transit in the country and sells a variety of its other products there, including Lincolns and Volvos.
The move comes five years after competitor General Motors Corp. moved its regional headquarters to Shanghai from Singapore.
This seems to run in contrast to a story run just the other week in which Finance Minister Korn Chatikavanij said that Ford and GM were thinking of expanding their operations in Thailand.
Ford Motor plans to make Thailand its sole overseas base in order to trim its expenses although it is concerned about the political turbulence in this country, he said.
In recent years Ford closed more than a dozen plants and cut more than 40,000 jobs. The car maker lost more than US$15 billion in 2006 and 2007. The Michigan-based company is trying to secure hundreds of millions in direct loans and loan guarantees to aid its credit line and to comply with environmental regulations in North and South America, Europe and Australia.
Despite a bankruptcy declaration on June 1 by Detroit-based General Motors, its subsidiary GM Southeast Asia Operations Ltd., including General Motors (Thailand) Ltd., announced earlier this month that its units in Thailand and elsewhere in the Association of Southeast Asian Nations region would not be affected. (TNA)
Even at the time I found myself wondering how GM could possibly say that units in the region wouldn’t be affected when the company is in the midst of a gut-wrenching bankruptcy in which huge sacrifices are being made across all of their business units.
In other bad news, Thailand’s exports plunged in May.
Thailand’s exports slumped at a record pace in May and could fall by nearly a fifth this year as global demand remains weak, the Commerce Ministry said Friday.
Exports from Southeast Asia’s second-biggest economy plunged 26.6 percent from a year earlier to $11.7 billion, their biggest monthly drop ever, the ministry said in a statement.
To be honest, I’m not even sure how Finance Minister Korn Chatikavanij has a job. I don’t lay sole blame on him for the state of the economy but the guy seems to have a pretty worrying history of bad predictions and his forecasts for May were much cheerier than they actually ended up being. Of course, he was trying to downplay the bad performance in April when he made those predictions because he had been wrong about those too. And the April estimates were an attempt to downplay March’s bad numbers. And so on and so on.