IF HELICOPTER PRODUCTION STOPS, The union of IAR Ghimbav wants to suggest the company"s shutdown

Ovidiu VRÂNCEANU,BraŞov

The negotiations between the union and the management of the company IAR Ghimbav concerning the reorganization plan are currently under way. The first numbers concerning the staff layoffs were announced on Wednesday.

"It seems we will be forced to lay off 374 people, who will have to leave the company by August 1st. By changing the layoff criteria, we were able to save other 28 jobs, which means the reorganization process will include 348 layoffs, of which only 85 are eligible for retirement in the next three years", union leader Şuba Arpad said. The laid-off employees will receive 24 months" worth of salaries from the state budget and another 12 months" worth of salaries from the company, according to the Collective Labor Agreement.

Mr. Şuba Arpad said that the decision on the employees that will stay with the company will be made in the coming days. "I think the Ministry of the Economy doesn"t actually want Romania to produce helicopters anymore, because it would be possible to continue production with just 150 people, which would be put on the Government"s list to receive technical unemployment compensation from the state. IAR Ghimbav is essentially the only company that produces for the military, that is not featured on the list of companies receiving state aids. Last year, 1200 people were on the list, and this year there are talks about increasing the number of people getting aid to 1.600, but IAR employees are not on that list", the company"s union leader said.

He also announced that if the remaining employees would not be enough to keep production going, he would personally request for the company to be shut down. "If there is no interest in producing helicopters, why keep it on the market? Because we wouldn"t be able to fulfill any orders without enough employees, and what"s more, we are expecting further reorganization, starting January 1st 2010, because we currently have no orders", Mr. Arpad said.

Layoffs from IAR Ghimbav were to be expected, as the company"s shareholders last month decided to cut the wage bill by over 20%, down from 25 to 19 million lei.

• 22 employees could move to "Eurocopter"

IAR Ghimbav shares its premises with Eurocopter Romania, a joint-venture between IAR Ghimbav and Eurocopter Franţa. The company only has 98 employees and a workload of over 100%. Given these circumstances, Eurocopter Romania intends to hire another 22 people from IAR Ghimbav, "but it is not certain whether they will go through with this", Şuba Arpad says. He added that Eurocopter Romania doesn"t actually produce helicopters - "they don"t have the necessary personnel for that", and when they attended the latest auction of the Romanian Ministry of Internal Affairs and Administrative Reform, Eurocopter Romania did not even buy the tender book, "it was the France-based parent company that did".

• 3.4 million lei in profit in Q1 2009

IAR Ghimbav"s turnover for the first quarter was 33 million lei, up four times YOY. The company"s profit for the quarter was 3.4 million lei, after previously posting a 5 million lei loss in Q1 2008. The company"s revenues shrunk 2.3%, reaching 33.6 million lei, whereas expenses shrunk 24.5%, down to 29.8 million lei.