Speech at Electronics and Precision Engineering Cluster National Day Observance Ceremony
Mr Gan Kim Yong, Minister for Manpower, Yokogawa Singapore
Mdm Halimah Yacob, NTUC Deputy Secretary-General, and Executive Secretary, United Workers of Electronic and Electrical Industries,
Mr Lai Ah Keow, Managing Director of Yokogawa Electric Asia Pte Ltd
Mr Cyrille Tan, General Secretary, United Workers of Electronic and Electrical Industries,
Mr Tan Peng Heng, Chairman, Electronics and Precision Engineering Cluster and President, Singapore Industrial and Services Employees' Union,
Mr Francis Ng, Branch Chairman of Yokogawa Branch Union
Good afternoon Ladies and Gentlemen,
1 Monthly Manufacturing Performance April 2010
- I am pleased to join you at the National Day observance ceremony organized by the Electronics and Precision Engineering Cluster.
- Yesterday the nation celebrated Singapore's 45th National Day amidst the backdrop of strong economic growth. MTI has revised its GDP forecast upwards to between 13%-15% this year. On the jobs front, employment grew by an estimated 63,000 in the first half and is expected to remain robust for the rest of the year.
- The Electronics and Precision Engineering Cluster also looks set to do well this year, riding on the wave of economic upturn. Output for the precision engineering sector expanded by a significant 56.2% in April 2010 year-on-year while the electronics sector also grew by a sharp 60.0%1. Some 4,500 skilled jobs are also expected to be generated from investments in the sector this year2.
- We have emerged from the recession stronger and more resilient. One good lesson learnt from managing this downturn is the importance of having a flexible wage system.
- During the recent downturn, many companies were able to make use of flexible wage system such as the Monthly Variable Components (MVC) and Annual Variable Components (AVC) in their wage structures to reduce wage costs quickly to save jobs. This enabled them to stay cost competitive, and keep their valued employees. Many of them also leveraged on schemes such as the Skills Programme for Upgrading and Resilience (SPUR), by sending their workers for training to upgrade their skills and prepare for the upturn. These companies are now able to reap the benefits of having a better trained workforce and ready capacity to capitalise on the opportunities brought by the business recovery.
- With strong business recovery, workers can look forward to wage increases and bonuses this year. Companies which have not implemented the MVC in wage structures should do so by channeling part of the wage increases to the MVC component. Those which have already introduced the MVC should also continue to build up the component. For companies which have reached the MVC target of 10%, I encourage them to consider increasing their MVC beyond 10% so that they have a greater buffer and more flexibility to deal with future economic shocks.
- Looking ahead, one of our biggest challenges is to achieve long-term productivity growth of 2-3% per annum. Our strategy is to focus on innovation, business re-engineering and skills upgrading for workers. Companies in the Electronics and Precision Engineering Cluster are good examples of those which constantly pushed for higher productivity, innovation, and investments in higher value-added businesses. They also provide regular training to upgrade the skills of their workers to keep up with rapidly changing business needs.
- For example, our host today, Yokogawa Electric Asia Pte Ltd, will be producing new flat panel Liquid Crystal Display (LCD) modules entirely at the Singapore factory. These LCDs are used in airplane cockpits, including the latest Airbus A380. The new production line is highly automated and requires new skills to operate. Seven workers were sent to Japan for specialized training so that they can run the Singapore production line. Over the next few years, more workers will be sent to Japan for cross training to equip them with the necessary skills, before the entire LCD production line is transferred to Singapore in three years' time. This will add value and enhance the productivity of our workers here.
- To aid in the training of workers and our push for productivity growth, various schemes such as the Workfare Training Support Scheme (WTS Scheme) have been introduced. Since 1st July this year, the WTS Scheme will provide enhanced course fee subsidy and absentee payroll funding of up to 95%. Companies could also take advantage of the $2 billion National Productivity Fund under the new National Productivity and Continuing Education Council to develop and implement initiatives to raise productivity. Productivity investments will also enjoy 2.5 times tax credit under the Productivity and Innovation Credit Scheme3.
- A robust economy will bring about intense competition for talent. In the increasingly tight labour market, issues such as the ageing workforce and upward pressures on wages will need to be addressed. Progressive workplace practices thus provide a competitive advantage to companies and become increasingly, the key to attracting and retaining talent. In this regard, Singapore Technologies Kinetics (ST Kinetics) and Seiko Instruments Singapore (SIS) are good examples of companies which have implemented progressive practices.
- Singapore Technologies Kinetics recognises the benefits of a diverse workforce and has been on a constant drive to make work processes more age friendly. Tapping on the Advantage! Scheme, ST Kinetics invested in power safety glasses in place of generic glasses and improved the equipment used for precision work. This has reduced the strain on workers' eyes, so they no longer need to squint while working. The company also invested in back support straps for workers who do manual work, benefiting especially the older workers. These improvements have resulted in ST Kinetics seeing higher cost efficiency through reduction in injuries and man-hours lost, and increased productivity as well.
- At the same time, staff reported a higher morale and a higher level of engagement with the company. Mr Goh Hong Nam is one such example. An employee of ST Kinetics since 1974, Mr Goh chose to be re-employed upon reaching 62. While he thought of retiring previously, Mr Goh decided to stay on with ST Kinetics as he likes his job, enjoys working in the company and feels he has benefited from the age-friendly practices put in place. He has been re-employed as a Principal Technician for 6 years now and is still contributing to the company with his valuable experience.
- Over at Seiko Instruments Singapore (SIS), the company implemented flexible working patterns for employees to retain them. This has resulted in less wastage of manpower hours and allows employees to enjoy greater flexibility and more rest hours during off peak periods.
- I would like to take this opportunity to commend the companies in the Electronics and Precision Engineering Cluster for working closely with their unions to foster cooperation and synergy with their tripartite partners. The strong partnership has helped to increase productivity which benefited the companies, employees and the overall economy.
- On this note, let me wish everyone a happy National Day.
- Thank you.
2 Singapore’s Electronics Industry set for strong growth in 2010 and beyond
3 Singapore Budget- Tax Changes (Productivity and Innovation Credit)