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clipped from www.malaysiakini.com

Letter: Penang ‘bribed’ Motorola to stay
Highly-confidential correspondence confirms that the Penang state government had asked the federal government to offer a RM1 billion project to American telecommunications giant Motorola in a desperate attempt to retain the latter’s investment in the state.
If this wasn’t done, the Gerakan-led state government warned Prime Minister Abdullah Ahmad Badawi that its ‘catastrophic impact’ would be ‘politically very detrimental’ especially in the run-up to the general elections on March 8.
pak lah and koh tsu koon and motorola factoryThe stunning revelation comes as the opposition intensifies its attacks on the Gerakan state government over the sliding performance of the island’s economy. Koh has been on the defensive repeatedly denying such claims.

  • penang koh tsu koon komtar 290208It would cause a total of 10,000 jobs to be lost of which 4,000 are direct jobs in the Motorola facility in Penang and the remaining 6,000 jobs among Motorola suppliers and vendors in the country.
  •   blog it
    So is is obvious Gerakan was not maintaining the economic climate well. Motorola would have shifted its operations to China. A thorough study is required to look into the problems of other electronic giants and correct them.The elections is a blessing to the 10,000 workers, without which the federal government would not have raised a finger to help, the Badawi corridors would have taken preference.

    Most of the foreign investors want to move and new ones are reluctant to come, the government should make extensive studies to find out the problems the existing companies face and overcome them if possible.

    New investors prefer neighboring countries, cheesed off by our 30% equity rules and other stringent measures. If nothing is done, Malaysia is dead.

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    3 Comments

    1. I am not surprised!!! Even Intel is moving its operation to Vietnam where it is building a very big factory in Ho Chi Minh City and had helped to boost up property prices since its announcement in nearby areas.
      Once up…I won’t be surprise when they close down their Penang plant….
      Thats Koh Tsu Koon & BN for you.
      Do not send him into Parliament.

    2. who ever spread this news might not really know the full story. I dare not say I know all but being an ex. I know there’s always been a talk to upgrade Malaysia’s network system for Gov which is used by mission crictical reason (PDRM, Army etc) since most are old analogue system which is out dated.

      But as usual you know how slow the process to get things done at Gov level.

      Another thing is Intel can move their stuff to China because US gov lifted the banned on some of Intel product to be made in China. Motorola at Penang is doing something still consider sensitive, I doubt the writer even know what Penang Motorola is doing. They did things for corp and gov division which is like US gov related equipment and also equipment for other country. Some or most of them is sensitive to move to China. The only product I seen that can move to China is their iDEN product which in fact isn’t doing much progress in recent years with their biggest customer going to shut down the network in USA during coming years

      To me….the allegation could be true but the fact of moving Motorola Penang production to China is rubbish!!!!

    3. Well, if Malaysia Gov must give the RM1 billion contract to Motorola. That does not necessary will ensure Motorola operation will stay in Penang.

      Motorola hv been going thru a major re-org in the last 3 years and still re-org now. Today with news of selling off its Mobile Devices Business unit (the one that make and sell mobile phones). That will not help Motorola as the business leverage is actually from this business unit. Once that business unit is sold, Motorola will hv to pay more on component cost as they hv no longer the business leverage as the buying power hv reduced significantly.

      So you see, there is no way with that RM1 billion project given to Motorola will make Motorola Penang to stay. Motorola is just another foreign investor like the rest, the problem here is that how do our Gov do to attract more foreign investor like tax release, reduced tax or tax exemption. Those are the factors that make foreign investor to come here or to stay.

      If you think foreign investor is moving out because of cheap labor cost in China or Vietnam? I think you are wrong. In fact Malaysia is still providing one of the most competative labor cost in the world.


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