SINGAPORE: Singapore's manufacturing sector is facing inevitable job cuts amid the global downturn, according to Mr Renny Yeo, the new president of the Singapore Manufacturers’ Federation (SMa).

As such, the SMa is prepping its members for a tough ride ahead with help on cutting costs, saving energy and finding new markets to help minimise retrenchments among their staff.

Although Mr Yeo says most SMa members are currently still holding up, he foresees job cuts towards the end of the year, particularly in the consumer products sector, such as electronics.

“The ones to get hit in manufacturing are always the production workers,” he said. “Definitely, the foreign workers will be hit harder than locals, as locals tend to take on supervisory roles. Supervisory roles only gets affected by a second round of job cuts if (the economic situation) gets worse.”

At a community event last week, Minister Mentor Lee Kuan Yew said that foreign workers on work permits would feel the brunt of any retrenchments, saving many Singaporeans their jobs.

Mr Yeo said he hoped employers needing to cut labour costs first consider flexible wages as a solution. However, he thought most companies would be put off by the extra paperwork and effort required to set up a system for wages evaluation.

“At the end of the day, it’s worth it because you retain your core skills. It’s going to cost you a lot more if the downturn is only for a short while and you have to start up again with higher costs,” he said.

To prepare for difficult times ahead, Mr Yeo said the SMa’s focus must change. The organisation has more than 2,600 corporate members, 25 per cent of them multinationals. The rest are smaller and medium enterprises. In particular, he wants to shift the organisation’s emphasis on investment in old regional markets to cost reduction and exploring new opportunities in emerging areas.

Initiatives such as bulk purchasing of consultancy services for energy efficiency and initiating trade missions in countries in the Middle East and Russia are also on the cards.

Mr Yeo, who is also chairman of Singapore Cables Manufacturers, said what makes this current slowdown more serious than previous downturns is its coupling with record inflation, particularly for transport and logistics. “Costs for the whole business chain have increased tremendously,” he said.

With inflation hurting, Mr Yeo would like the Government to hold back on any planned price hikes. “We wish to strengthen our research so we can provide good feedback to our Government. That’s a very important role we must play so that we can arrive at a win-win situation,” he said.

He cited the recent strong Singapore dollar as another setback for Singapore manufacturers. - TODAY/ra