PETALING JAYA: The Automobile Association of Malaysia (AAM) has shut down 11 of its branches nationwide, as part of its cost cutting measures.
Sin Chew Daily quoted AAM chairman Tunku Mudzaffar Tunku Mustapha as saying the closure is expected to help the automotive body save between RM250,000 and RM300,000 a month in operating costs.
Apart from closing down branches, AAM will also, as part of its “recovery” plan laid out eight months ago, work on settling salary arrears for its staff and pay up outstanding contribution to the Employees Provident Fund (EPF), draw in new strategic partners, promote information technology and online communication systems and have more youths join as members.
AAM is also planning to promote its services to university students, with hopes that the youths would join them after their studies.
Tunku Mudzaffar pointed out that despite all its financial woes, AAM had never retrenched its workers.
At its peak, the motoring authority had a staff strength of 350 at 20 branches nationwide.
Now, there are only 132 employees left with 11 branches shut down as they were non-performing.
Employees at the closed branches, including in Seremban, Malacca, Butterworth, Terengganu and Kelantan, have been transferred to other branches.
Tunku Muzaffar said the business of providing automotive insurance and motor towing services have run into tough times, as insurance companies have started offering such services. This has resulted in AAM’s membership to dwindle to just 70,000, compared to the previous 300,000.
He urged AAM staff not to give up hope on the body as yet, as the association still had assets worth some RM8 million. The association is said to be at least RM4.5 million in debt.
Financial constraints recently forced AAM to sell off its headquarters in Shah Alam.