In February 2008, Motorola announced the company’s expansion plan through RM350 million investment plan in its Bayan Lepas plant. The investment would be tailored and focused on certain key areas that include human capital expansion, research and development (R&D) of digital 2-way radios, advanced wireless communications, and equipment and accessories.
The expansion will also see as many as 700 new engineering jobs created. The present Motorola plant in Penang was established in 1972 and today the company employs about 4,000 direct employees in the state, with additional few thousands through in-direct employment and business outsourcing.
However, a few groups have jumped into questioning the move and alleged that the expansion was the result of an ‘arm-twisting’ between the telecommunication giant and the Malaysia government, which saw Motorola awarded RM1 billion contract. Some suggested that Motorola was previously planning to pull out its entire operation in Malaysia, which houses some of the brightest engineers in the country.
Prior to the expansion announcement, the country President, Mohd Asri Hassan Sabri told newspapers that Motorola was facing challenges on its mobile services division, which is the biggest contributor to the group’s income. The RAZR mobile phone series was a huge success initially, but it seems that Motorola has been relying too much on the product. They recently opened their first one-stop concept store, called Motostore at Suria KLCC, which offers a full range of the company’s mobile products and services.
Apart from the mobile services, Motorola is also supported by other 2 divisions – home & network mobility solutions and enterprise solutions, and is currently looking to expand their WiMAX (Worldwide Interoperability for Microwave Access).
Penang was transformed in the 80s when major international corporations and factories invested their operation here until the Asian financial crisis in the late 90s resulted some of the companies to fold up. Also, many manufactures decided to outsource its operation to China mainly due to the operation cost associated with the running of factories.
There have been questions recently surrounding Penang’s ability to attract foreign investors. It is also now facing competition from its neighboring state, Kedah, who attracted an astounding RM9 billion investment in 2007. Intel, one of the Penang golden boys is also in the expansion mode for their plants and facilities in Kedah, especially Kulim.