The Luen Thai garment factory closed on Friday leaving 1,800 workers jobless, as government officials continued to try to assuage fears that the industry is in peril in the face of a US quota system set to expire at year’s end.
Luen Thai, located in Phnom Penh’s Meanchey district, announced in early October that it was leaving Cambodia, citing labor troubles and a dearth of orders. Friday’s closure follows the Oct 28 halt of operations at the Korean-owned Sam Han factory in Phnom Penh’s Russei Keo district, which left some 8,000 workers jobless.
Both factories have formally suspended operations, but union leaders said Sunday there was no guarantee that the factories would resume work or take back employees.
Sam Han management said the factory was closing until Dec 12 due to a lack of orders, said Sar Mora, deputy head of the Democratic Workers’ Union at the Sam Han factory.
But “we are afraid that this factory is really closed,” he said.
Sam An management could not be reached by phone on Sunday.
Labor Minister Nhep Bunchin downplayed news of the two factories’ closure on Sunday, saying factory workers had sufficient skills to seek jobs elsewhere and that a handful of new factories could be opening soon.
“The garment factory workers have their own skill, so they will have employment,” Nhep Bunchin said.
Observers have warned of a possible fallout in the garment sector and crisis for its 240,000 workers when the US drops its quota for Cambodian factories at the end of the year, opening the country to competition from textile giants such as China and India. But the government has tried to quell those fears, even as officials openly hope for the US extending the quotas or that China will somehow aid Cambodia in its transition.
Ok Boung, secretary of state at the Commerce Ministry, said Sunday that garment factories were still taking orders from 2005, evidence that the sector will endure past the quotas’ expiration.
“A lot of factories still operate, so I have no concern,” he said.
Meanwhile factory owners are blaming upstart unions, and not the quota system, for the problems that have forced out factories such as Luen Thai, which is US-owned.
Troubles at Luen Thai continued Friday as some 200 to 400 workers refused to resign voluntarily and take compensation from the company.
Lay Sopheap, head of the Free Trade Union at Luen Thai, said the workers were suspicious that, if they resigned, the factory would reverse its decision to close and hire a new batch of workers and pay them less.
“We are afraid that the factory has not even closed, because they haven’t taken out the sewing machines,” she said.
Some 1,600 other workers accepted the compensation, she said.
Pen Visnouk, chief of administration at Luen Thai, said the union’s excessive demands, combined with falling orders, had forced management to close its doors.
“There are no buyers, and there is a lot of competition from neighboring countries,” he said.