Mass Layoff Alarm Grows: Said Iqbal Reveals Two Automotive Component Factories in East Java Preparing to Leave Indonesia

Disappointing news has emerged from the national automotive industry sector. Special Adviser to the President for Employment and Worker Welfare, Said Iqbal, revealed that two large automotive component factories in East Java are considering moving their production abroad. If the plan is realised, thousands of workers could potentially be affected by layoffs. This situation is a serious concern as it occurs amidst the government’s efforts to maintain the investment climate and preserve jobs in the manufacturing sector. Said Iqbal stated that the two companies, located in Pasuruan and Mojokerto, are major players in the automotive component industry. Although no final decision has been made, the information he received indicates discussions regarding the partial relocation of production to Vietnam. ‘In the Pasuruan and Mojokerto areas of East Java, there are two companies. I cannot yet name the companies. Two giant automotive component companies. Thousands of their employees could be affected by layoffs,’ said Said Iqbal during a virtual press conference on Sunday, 21 June 2026. According to Said, the parent companies of both factories are Japanese. The principals in Japan are reportedly changing their business direction to focus more on the development of electric vehicles. This strategic shift is causing the companies to consider moving part of their production lines to countries deemed more supportive of electric vehicle industry development, one of which is Vietnam. ‘The principal in Japan will move its production to more productive countries and change its product diversification. Because this is automotive, they will focus on electric cars, the development of which is being carried out in Vietnam, not in Indonesia,’ he said. He explained that the decision is not solely related to the companies’ operations in Indonesia, but is part of a global strategy by the parent company to face changes in the world automotive industry, which is increasingly moving towards electric-based vehicles. Although revealing the potential relocation, Said Iqbal was not yet willing to disclose the identities of the two companies. According to him, a process of communication and negotiation is still ongoing between various parties, including the government and the companies.