Taiwan Machine Tool Makers to Raise Wages by 3-5%

Taiwan's leading machine-tool makers, including Hiwin Technologies Corp., Goodway Machine Corp., AWEA Mechantronic Co., Ltd., and Kao Fong Machinery Co., Ltd., have decided to increase wages by 3-5% for the their sizable profits achieved in 2014.

Industry executives estimate Hiwin, reportedly the world's No.2 maker of linear guide ways and ball screws, to make at least NT$9 per share in after-tax net income in 2014 on consolidated revenue of NT$15.08 billion (US$486.64 million), up 21.3% from 2013.

They forecast the company's revenue for 2015 to rise 15-20% from 2014 based on its steady growth in medical and industrial robot shipments as well as its added production capacity coming online.

Hiwin Chairman and Chief Executive Officer Eric Chuo says the company's production lines are inundated by orders from makers of equipment for car-parts molds, compelling his company to add shifts during the upcoming week-long Chinese New Year break, during which workers will be paid for overtime in the extra shifts additional NT$3,000 (US$96.77) daily.

The company had already hiked wages for line workers and engineers last year by 5%, and will this year increase pay for administrative and non-technical staff by 3-5% to boost morale.

Goodway is estimated to earn NT$6 per share on consolidated revenue of NT$7.82 billion (US$252.25 million) in 2014, with such earnings being the second highest in company history and  revenue representing a gain of 32.9% from 2013.

The company has decided to raise wages by 3-5% this year, and has been approved by its board of directors to offer additional three months of salary as yearend bonus, compared with last year's two and a half months of salary. Its subsidiary, AWEA, will pay an additional 2.5 months of salary as bonus this year, compared with last year's two months of salary.

Goodway Chairman Edward Yang says Goodway still has NT$900 million (US$29.03 million) of undelivered orders while AWEA still has NT$1.6 billion (US$51.61 million), which will keep both companies humming throughout Q1, 2015 to deliver products mostly to American, Southeast Asian and Chinese carmakers, aircraft builders and machinery-parts processors.

Yang forecasts the company's sales for Q1, 2015 to exceed that of 2014 based on the extra shifts that have been added daily except Wednesdays and Sundays since the beginning of this year, not to mention the overtime work planned during the upcoming Chinese New Year holidays.

Industry executives project the company to post  consolidated revenue up to NT$10 billion (US$322.58 million) this year.

Kao Fong netted NT$1.8 per share on consolidated revenue of NT$2.1 billion (US$67.74 million) in 2014, with the per-share figure being a new high and revenue rising 3.9% year on year. Chairman, David Shen, says the company will hike wages by 5% this year to equal that in 2013.

                                                 

Shen points out that the company still has NT$550 million (US$17.74 million) of undelivered orders mostly from American and mainland Chinese makers of car-parts molds, which will keep his company busy throughout Q1, 2015. To deliver  on-time, the company has decided to shorten the week-long Chinese New Year holidays to only three days.

The island's machine-tool makers are expected to in 2015 generate fatter profit and higher revenue than last year mostly thanks to the lower NT-dollar-to-greenback ratio, with industry executives estimating the NT-dollar-to-greenback ratio to drop 2.7-5.9% to 32.5-33.5:1 by the end of this year, thereby boosting the Taiwan industry's profit by 10% from 7.7% as previously forecasted.

(KL)