By Kenneth Matimaire
Vehicle assembler, Quest Motor Corporation (QMC), is to lay off about 40 workers owing to the low uptake of its vehicles.
Quest employs about 120 workers.
The Financial Gazette’s Companies & Markets can report that workers who have reached retirement age and contract workers would soon have their contracts terminated.
QMC operations manager, Carl Fernandez, confirmed the development, saying the company had been struggling to secure enough foreign currency to pay its suppliers and keep up with the country’s tax regime to avoid penalties.
“It’s a very sad state of affairs; we are letting some contract workers go. Some have retired already and are on contract and some are young workers. This is in a bid to keep the company going in very trying economic circumstances. We are failing to secure enough currency to pay for our raw materials. We cannot even make payments for some kits that were delivered in advance,” he said.
A new payment regime put in place by the central bank early this year to deal with a worsening cash crisis introduced a priority list for foreign currency payments, but market players and bankers say even firms that are on top of this list have been failing to access cash for imports.
This is slowly resulting in shortages of basic food products, most of which require raw material imports for production.
“There are also statutory payments like Pay-As-You-Earn that have to be paid by a certain date otherwise the fine is 100 percent. So to try and save the company we have to let some contract workers go and try and do the production with the remaining permanent employees. The number (of those laid off) is below 0. We still have some contract workers on site in vital areas,” he said.
Fernandez said they were also contending with an influx of cheap imported vehicles, which had flooded the local market.
He added that they would hire the retrenched workers once the working environment permitted. Financial Gazette
