The Singaporeans-first CEO

The Singaporeans-first CEO

A decade ago, Dr Moh Chong Tau, CEO of precision engineering company Makino Asia, started doing away with foreign workers and replacing them with older Singaporeans.

He tells Susan Long how he did it, how he increased revenue five times and battled liver cancer, and his plans to make manufacturing sexy again.

In the dusty grey desert of heavy industry factories and warehouses in Gul Avenue, Makino Asia gleams like a white oasis.

It is landscaped with gardens, its bonzai shaped into graceful domes.

The air inside is crisp, humidity controlled and cooled to 22 deg C.

The cafeteria, bearing little resemblance to other industrial canteens in Tuas, has mood lighting and stylish chairs.

It has a clubhouse, too, with a fancy gym and basketball court.

As the foreign versus local worker divide rages on in the country and employers cry foul over ever rising foreign worker levies, one Japanese-owned, locally managed multinational's CEO is sitting pretty.

As far back as a decade ago, Dr Moh Chong Tau, president and CEO of precision engineering company Makino Asia, made up his mind to do away with foreign workers.

The downturn made it hard to renew work permits, so he bit the bullet and sent home most of his foreign workers - mostly from China and India - who then made up about 40 per cent of his 220-strong production workforce, once their contracts were due.

About a quarter of his foreign workers were skilled enough to apply for permanent residency (PR), so he kept them and coaxed them to become Singapore citizens eventually.

He made his factory smell nice, automated it fully, instituted a four-day week, and aggressively recruited older Singaporean workers laid off in droves during the 2002 downturn.

He paid them 50 per cent more than what a fresh recruit would earn.

He simplified the job, broke it down such that one person would assemble a component, instead of the whole machine, to shorten the learning curve.

He also trimmed the 44-hour five-day week down to four days, having them work 7.30am to 7pm from Monday to Thursday.

Friday was overtime day, which paid out 1.5 times the usual rate, enabling them to plump up their salary by another third.

He also streamlined processes and redesigned the layout of the shop floor, investing in state-of-the-art machines, like vertical carousels that brought down parts upon keying in a number, to reduce movement, lifting and bending.

Most of his middle-aged hires have stayed on, moving up the ranks to become supervisors and managers.

Today, half of Makino Asia's 480 employees in Singapore are above 40.

A fifth are above 50 and 6 per cent above 60. A quarter have stayed with the company for at least 20 years.

His oldest employee, a lead technician, is 68.

Now 62, Dr Moh renewed his latest three-year contract with his Japanese employer last July and does not subscribe to an official retirement age.

He keeps staff on the payroll as long as they can contribute. "Experience is more important than youth… The last 5per cent you learn on the job is more important than the other 95 per cent you learn in school," he is fond of saying.

His pursuit of his "Singapore core" strategy, which made him a Ministry of Manpower poster boy and a union favourite, has been a money-spinner too.

It paid off fivefold, which is how much Makino Asia's revenue surged - from about $100 million in 2001 to $500 million in 2006.

It financed the company's expansion into China, India, Thailand, Indonesia, Malaysia and Vietnam, where it now hires a total of 800 people.

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