OPI Bankruptcy Imminent; Workers Compensation Uncertain
Posted by WAC Main info central on Thursday, June 30, 2016 Under: News
Women workers protests OPI's non-disclosure of the company's real status after it declared suspension of operation in April at GBP, Gen. Trias City, Cavite which displaced more than 4,000 workers mostly women.
Rosario, Cavite – Approximately 4,500 workers of Optis
Philippines Inc. (OPI), mostly women, located inside the Gateway Business Park (GBP)
in Gen. Trias City are all in danger of not getting paid of their separation
pay because as of this writing, OPI management refuses to honestly disclose to
its workers the real status of the company.
Abrupt Operation Suspension
OPI suddenly announced suspension of its operation on April 14, 2016 because according
to management, there were no materials and lack of orders from its buyers.
After less than two weeks the workers returned on April 25 as per instruction
of the management, but the company welcomed them with an official memorandum
declaring that the company will not operate until May 15, 2016 and report back
to work the next day, May 16 which was posted on social media site, Facebook.
But workers reported back twice on separate dates before May
16 because the management sent summons through text messages only to be sent home again upon reaching the production
plant.
On May 12, the workers received information through text
messaging and again in Facebook that the suspension of operation shall continue
until July 31, and will resume operation on August 1.
The workers still reported on May 16 to ask OPI management
to clarify the real status of their work but according to the workers the
management only advised them to seek temporary employment from other companies
and just wait for further notice.
The sudden work suspension sent financial shock to the OPI
employees who mostly came from different provinces across the country as far as
Isabela or Sorsogon to name a few and leaving them with no income to pay for
rent and buy their own food.
Likewise, since majority of them were breadwinners of their
respective families, majority of the workers preferred to stay and look for
work from other companies as the opening of classes for the new academic year
already dawned.
Protest Action and
Petition
Due to the vague pronouncements of OPI management regarding
the real status of the company, workers sought the legal advice of the Workers
Assistance Center (WAC). And on May 18,
the women workers held their picket in front of the OPI plant inside the GBP to
protest the sudden closure and to demand full disclosure of the company’s
status and one month financial assistance.
After the protest action, the workers furnished the
Philippine Economic Zone Authority (PEZA) a copy of their petition letter that
they were about to submit to the Department of Labor and Employment (DOLE)
CALABARZON Office in Calamba City, Laguna.
The workers addressed their letter to DOLE Regional Director
Ma. Zenaida A. Campita and asked for a dialogue with the OPI management.
The workers wanted OPI management, in particular, to clarify
if the suspension of operation is temporary or permanent.
Affected workers were also asking that in case of OPI’s
temporary closure, to provide them with financial assistance equivalent to one
month of their salary to lessen the impact of the abrupt loss of income.
They were also demanding to have a written agreement with
the company that in case the operation resumes and there will be workers who
decide not to return to OPI they shall
be paid their separation pay as provided
by law.
Lastly, official notice to return to work shall be made through
electronic mail and postal mail and not through text messages or the use of
Facebook.
Dark Days Ahead
After WAC posted the protest action of the OPI workers through
Facebook, the Korean House of International Solidarity (KHIS), a South Korean
Non-Government Organization (NGO) which monitors multi-national companies
especially South Korean investors regarding their labor laws compliance and
business conduct in the countries they are located at, responded promptly.
According to KHIS, they were able to talk through phone with
a company officer from Optis Co., Ltd. – OPI’s mother company in South Korea
and were told that the Optis is in a very bad financial state.
It was revealed that in 2014, Optis acquired 49.9% share of
Toshiba Group of Company’s stake in Toshiba Samsung Storage Technology Korea
(TSST-K) a wholly-owned subsidiary of TSST in South Korea. TSST is a joint
venture between Toshiba and Samsung where the former owns 51% while the latter
holds 49% ownership. Transfer of ownership of Toshiba’s stake in TSST, according
to Toshiba and TSST-K press release, will be not be completed until 2017.
However, Optis’ acquisition was made after the fact that
optical disc drives (ODD) demand has been declining worldwide which is also the
reason why Toshiba and Samsung are selling their stakes in the ODD industry.
Optis was on aggressive business expansion since 2012
through business acquisitions. On the said year, it acquired Smart EMS
Philippines, Inc. (SEPHIL), Samsung’s ODD maker in the Philippines.
In July 2015, Optis and SOLiD Inc., South Korea’s network
equipment manufacturer, formed a consortium and took over Pantech Co. Ltd. which
was at the brink of bankruptcy. Optis gained 4% ownership while Solid holds 96%
control over the South Korean’s third largest smartphone maker.
Pantech, according to various online news articles, was already
under court receivership since 2014 until the takeover was approved by the
Seoul Central District Court.
Likewise, Toshiba Corporation filed for corporate
rehabilitation on May 12, 2016 also in Seoul Central District Court regarding
its control in TSST-K. TSST-K’s liabilities total approximately, according to a
press release, ¥9.0B.
Thus, Optis filed for court receivership due to excessive
debt it incurred in acquiring Pantech and, ODD products globally, its main
business, was generally on a decline since 2014 due to the rise of mobile
memory cards.
Receivership, according to Investopedia, is a type of
corporate bankruptcy in which a receiver is appointed by bankruptcy courts or
creditors to run the company.
False Hopes, Deceit
Optis’ situation in South Korea means that OPI workers in
the Philippines cannot hope for the best for the company to resume operation
until August 1, 2016.
OPI management recently offered its workers a Voluntary
Separation Program (VSP). In a released memorandum dated May 30, the management
said that workers who would apply for the VSP will receive 30% of their
separation pay on October 14 while the remaining 70% on December 29 of the
year.
The memorandum, however, offered no basis of computation for
the separation pay. Also, the memorandum is quiet on the fate of contractual
workers who have been working in OPI for
more than a year.
Included in the memorandum was that the company is welcome
to absorb the workers who have applied for VSP if they choose to remain should the
company start operation again.
According to OPI workers, most of them had already applied
for the VSP because they were afraid that they won’t get paid if the company
closes down permanently. Besides, they believe that the company is just giving
them false hopes and the August 1 resumption of operation is nothing but a
deceptive move to buy time before declaring permanent closure due to bankruptcy
in October, the sixth month of temporary closure, which is allowed by law.
As of now, management said to workers that Banco De Oro
(BDO), the biggest commercial bank in the country, froze OPI assets and
accounts and put its own security guard in the premises of the company since
May.
Although, the workers said that a small portion connected to
the OPI plant was operating and making phone units under the name of OSMPI.
Optis acquisition of debt-ridden Pantech should explain the ‘strange separate
operation’. In an online article by Maeil Business News Korea published on May
26, industry observers believed that Pantech would start commercial production
of its new smartphone model IM-100 this June.
Meanwhile, in a recent consultation with OPI workers, they
revealed that the company regularly and compulsory deducts an average of P30
from their wages every payday for funeral donation. A worker who brought along
her pay slips with her showed that it was collected from her since 2010. They
added that only P15,000 were given from
the amount collected to the bereaved family of the worker. They also said that
the compulsory deduction was a ‘practice’ even before the plant relocated in
GBP in 2012. The workers are asking, “where will the millions of money go now if
ever the company ceases operations?”
For WAC, all the remaining money from deduction for funeral
donation should be given back to all workers. The money should be fully
accounted for and disclosed by the management.
The OPI management had already amassed a huge amount of
money supposed to be for the bereaved worker’s family. OPI total workforce
peaked at 7,000 workers from 2012 to 2014.
Optis Co., Ltd. was founded by its CEO Mr. Ju Hyung Lee who
built his career around Samsung Electronics before he established his own
company in 2005. According to its website (www.optis.co.kr), it established its
manufacturing plant in the Philippines months before 2005 ended but partnered
first with Yu Jin Optical Electronics, Inc. – a company located at Cavite Export
Processing Zone in Rosario, Cavite.
Its Philippine subsidiary, Optical Solutions Manufacturing
Philippines, Inc. (OSMPI), changed its name to OPI in December 2006. OPI
operated in Carmelray Industrial Park II, Calamba City, Laguna.
Optis established its second plant in Calamba Premiere
Industrial Park (CPIP) in Batino, still in Laguna province, before it
transferred operation in GBP four years ago due to its acquisition of SEPhil
also in Batino.
SEPHIL, on the other hand, according to workers, had shut down and paid its workers their separation pay before OPI declared its suspension of operation.
Upon OPI’s relocation, it brought along thousands of its
workers mostly women who already spent six years working in the company to Gen.
Trias, Cavite. The transfer stirred local residents in the surrounding
communities to put up for rent spaces to accommodate the exodus of workers.
OPI manufactures optical pick-up devices used for optical
disc drives to its main customer TSST-K.
In : News
Tags: gateway bakruptcy odd optis samsung toshiba
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