Crisis Sparks Metallurgical Meltdown

• Metallurgical plants on the brink of closure

• 10% of the employees could be laid off

• Unions threaten to go on strike and stage protests in Brussels

Once a core industry of the Romanian economy, the metallurgical

industry is now facing serious difficulties caused by the ongoing economic crisis and the unfair competition coming from the unregulated markets of Turkey and Ukraine. As the economic crisis is unfolding, metallurgical plants are facing a significant reduction in their export orders and have announced massive layoffs.

According to the Metallurgical Union Federation METAROM, some 10% of the total of 32,000 employees of the metallurgical industry, could be laid off in the near future, while the remaining ones could be forced to accept a salary cut. The same situation is valid for the service providers working closely with the metallurgical industry. As the demand decrease is propagating, they, too, have already cut jobs or are planning to do so in the near future. Union leaders have stressed that the metallurgical industry is not affected only by the economic crisis, but also the unfair competition of Turkish and Ukrainian products sold for dumping prices.

The metallurgical unions have asked for an emergency meeting with the Government to identify measures to protect the industry and generate State orders "to keep this fundamental branch of the economy alive." The METAROM Coordination Council has released an analysis on the general status of the metallurgical industry in Romania. According to the document, all of the three metallurgical plants controlled by Arcelor Mittal in Romania (i.e. in Galati, Hunedoara and Roman) are luring employees into accepting voluntary layoff plus severance in order to conceal massive layoffs in the range of thousands of employees.

"The employees have no choice but to work for frozen salaries, suspended increments, forced vacation or technical unemployment that pays 75% of the regular salary," the union leaders added. METAROM and the European Metalworkers Federation have announced plans to stage protests in front of the Arcelor Mittal office in Brussels on 10 February 2009. The EMF are supporting the protest as all the European metallurgical plants controlled by Arcelor Mittal have reported various union problems.

According to the Romanian unions, a plant in Resita, owned by the Russian group TMK, is also experiencing grave difficulties. "The Russian investors, TMK, are shutting down the plant in Resita and plan to feed the Altrom foundry with raw materials from Russia or Ukraine," the union leader explained. According to them, the employees are either fired at a pace of 29 people per month to avoid meeting the legal conditions for mass layoffs or are put on technical unemployment. "Nearly 300 people have been laid off this way and the story will continue with a risk to seriously affect the image of the largest pipe producer in Eastern Europe," the union added.

In turn, the unions from Mechel Targoviste and Mechel Campia Turzii have already announced plans for an all-out strike "as a reaction to the intolerable attitude of the Russian managers towards social dialogue." The plants controlled by the Argentinean holding Tenaris in Calarasi and Zalau have started various training activities or other auxiliary activities or have initiated technical unemployment, which pays 75% of the regular salary. Since the beginning of the year, the two plants have been operating at approximately 25% of their capacity.

According to an analysis released by the METAROM Coordination Council, the aforementioned situation of the multinational companies is also valid for other plants in Romania. Laminorul - Braila has put over 80% of the workers on technical unemployment until 15 February. Turbinox - Bucharest has sent 120 employees on technical unemployment (80% of their regular salary) as the company cannot recapitalize the production process because VAT that should have been returned to them in 2007 and 2008 is still overdue.

Altur - Slatina has laid off 132 employees and is planning to let another 150 go in the near future. The main focus is on the employees who have demanded their overdue salaries. Furthermore, the union says that Laminorul - Focsani is about to close permanently, despite having pending delivery orders, because the supply of raw materials is not possible anymore. In the worst case, 350 employees could become jobless. On the same note, electrode factories Electrocarbon - Slatina and Elsider - Titu have downsized production to almost zero, because Romanian steelworks (the ones that are still in business) prefer to import electrodes. In total, 700 people in Titu are affected. In Slatina, 79 employees will be fired next week.

The unions" document indicates that Lamdro - Drobeta Turnu Severin has absolutely no order, while Atlas - Galati, a transportation company working mainly for the nearby steelworks, has fired 300 people already. A maintenance company also connected to the Galati steelworks has stopped all operations until 15 April and has fired 270 employees because of an shockwave coming from the steelworks, which dominates the local economy.