Prisma Ardianto, Jakarta – Two Japanese-owned automotive component manufacturers operating in East Java are considering shifting part of their production to Vietnam, a move that could put thousands of Indonesian workers at risk amid intensifying regional competition in electric vehicle (EV) supply chains.
Labor representative Said Iqbal said the facilities in Pasuruan and Mojokerto, both in East Java, are linked to major Japanese manufacturing groups that are reviewing their regional footprint as they pivot toward EV components. He warned that preliminary information suggests potential layoffs could affect "thousands" of employees if production is partially relocated.
"In Pasuruan and Mojokerto, there are two large companies. From initial information when I visited East Java, those two major automotive component firms could see thousands of workers impacted by layoffs," Said said in a virtual statement on Sunday.
He said the companies are part of Japanese industrial groups adjusting their strategy in response to shifting global conditions and rising demand for electric vehicle components. Part of the production line, he added, may be moved to Vietnam, where EV manufacturing ecosystems are perceived to be more competitive and policy support more aggressive.
"The situation is uncertain, prompting principals in Japan to consider moving to countries with higher productivity and diversifying production. They are focusing on electric vehicles, and development will be carried out in Vietnam rather than Indonesia," he said.
Said added that Indonesia's relative lack of competitiveness in EV manufacturing compared with Vietnam is becoming a concern for foreign investors, particularly in labor-intensive automotive supply chains. However, he stressed that the relocation plan remains at an early discussion stage and has not been finalized.
"This is still preliminary information, still under discussion. It is not a full relocation, only part of the production," he said, while warning that the potential impact could still be significant for local employment.
He urged the government to strengthen Indonesia's EV industrial policy and improve investment competitiveness to prevent further erosion of manufacturing jobs in key industrial zones.
He also said he plans to report the issue directly to President Prabowo Subianto, as well as State Secretary Prasetyo Hadi and Deputy Speaker of the House Sufmi Dasco Ahmad, while engaging labor unions to open negotiations with company management.
In a separate development underscoring broader pressures in Indonesia's labor market, around 4,000 workers at a footwear manufacturing facility in West Java have been placed on leave as the company awaits new production orders from global brands.
The affected employees work at Feng Tay Indonesia Enterprises, a major supplier to global sportswear companies including Nike and Puma.
Labor adviser to the president, Said Iqbal, said the workers were sent home after completing previous production orders, with no clear timeline yet for new contracts. He warned that the situation places a significant portion of the factory's workforce – estimated between 14,000 and 17,000 employees – under uncertainty.
"In Bandung Regency, there is a potential layoff risk affecting 4,000 employees," Iqbal said, adding that the figure represents workers who are currently on standby as orders fluctuate.
He said he will visit the facility alongside officials from the Ministry of Manpower and labor union representatives to assess conditions on the ground and seek solutions to prevent mass layoffs.