THE UNIONISTS' OPINION: "Mechel is close to leaving"

Russian group Mechel, which owns the plants Mechel Câmpia Turzii, Mechel Târgovişte, Ductil Steel Oţelu Roşu, Ductil Steel Buzău, Laminorul Brăila and Mechel Reparaţii Târgovişte, is showing signs that it wants to withdraw from Romania, said Ioan Pascu, the president of the Wire Industry Union in Câmpia Turzii.

"My opinion is that Mechel wants to withdraw from Romania and to sell everything. All of their actions lead to this hypothesis. They are turning down orders, even though, paradoxically, they are complaining about their lack of customers. The Cluj prefect, Ioan Vuşcan, called several companies which use metal and scheduled a meeting for September 5th, so Mechel can conclude contracts with them. We don't know, however, if the representatives of Mechel will attend that meeting. On the other hand, they are announcing new layoffs".

Since the privatization of the "Industria Sârmei Câmpia Turzii" ("Wire Industry of Câmpia Turzii") plant in 2003, and until the present time, out of the 16 divisions, less than half have remained operational, says Ioan Pascu.

The machinery has been cut to pieces and sold as scrap metal or disassembled and sent to Russia, the union leader says, and he went on to say: "Two years ago they disassembled a machine and they transported it to Russia. Our specialists reassembled it there".

Other signs that could indicate that Mechel may withdraw from Romania is the fact that the other companies in Romania have either been shut down, or are operating at reduced capacity, the union leader emphasized:

"According to my information, at Mechel Târgovişte only the steel mill and two rolling mills are still active, which represents about 30-40% of the plant's capacity. Apparently, Ductil Steel Buzău is currently operating at 50% capacity, and Laminorul Brăila (Brăila Steel Mill) is no longer working, because it has run out of slab billets.

Ductil Steel Oţelu Roşu is shut down. In the last three months, it has always been active for 10 days. They are no longer buying scrap metal, for production. They make steel, which then gets turned into slab billets, which is the raw material used at the plants of Buzău, Brăila, Câmpia Turzii.

Mechel Reparaţii, which handles the maintenance services for the entire group, has been shut down. I have seen the documents for that".

Last Friday, the plant of Mechel Câmpia Turzii informed the local authorities of Cluj that it may lay off another 800 employees, due to the lack of orders, after laying off 799 employees in June. Since June, about 600 people lost their jobs, said Ioan Pascu, who told us that the first stage of layoffs will be completed in September.

This would mean that Mechel Câmpia Turzii may only keep 238 employees out of the 1,050 it currently has.

Prior to the privatization of 2003, it employed 5,600 people.

It would seem that what will be left of Mechel Câmpia Turzii will be turned into a facility of Ductil Steel Buzău, the prefect of the county of Cluj, Ioan Vuşcan said.

• Ioan Pascu: "My suspicion is that Mechel Câmpia Turzii might be shutdown completely at the end of September"

The Mechel Câmpia Turzii plant may be shut down permanently at the end of September, Ioan Pascu suspects.

He said:

"What happened at Câmpia Turzii is theft. It would seem the foreign shareholders have violated a series of paragraphs of the privatization contract.

Based on an agreement with the union, the people of Mechel have pledged that they would not sell or dismantle any machines, and that they would be preserved.

The documents show that between 2006 and 2011, 72,000 tons of iron, resulting from the scrapped machinery, left for Târgovişte and Oţelul Roşu. Entire divisions have been turned into ruins.

Almost nine years ago, the "Mechel" group paid 27 million Euros for the majority stake in Combinatul Siderurgic Industria Sârmei (the Wire Industry Metallurgic Plant), out of which 20 million Euros would have gone into investments.

On the occasion of the privatization, the Romanian state cancelled all the debts of the plant of Câmpia Turzii, which amounted to almost 70 million Euros".

The union leader harshly criticizes the fact that Mechel ruined the plant of Câmpia Turzii:

"The privatization was presented as a major success by the government in power in 2003 (Adrian Năstase - ed. note) in a festive setting, in Câmpia Turzii, in the presence of the Russian ambassador in Romania, of the majority shareholders of the Mechel Group, and of many representatives of the local and central authorities. In their speeches, both the ambassador and the shareholders of Mechel outdid each other in presenting the benefits of this privatization, from keeping the 5,600 jobs which existed at the time, to the improvement of the working conditions and the hike in wages.

Since then, year after year, all of these promises proved to be just hype. One by one, two steel mills, three rolling mills, and two extrusion plants were shut down. After repeated restructurings, the number of employees fell to 1,900, thus breaking the commitments made to the AVAS (ed. note: the Authority for the Recovery of State Assets, as well as the strategy for the restructuring of the Romanian metallurgic industry, agreed with the EU. This "evolution" took place under the apathetic eyes of the Romanian authorities".

• The prefect of the county of Cluj, Ioan Vuşcan: "We have sent a request to the AVAS to inform us of the clauses of the contract concluded with Mechel"

For two months now, the prefect of the county of Cluj, Ioan Vuşcan, says that he has turned into a salesman for Mechel, in the hope that the company would recover and it would not be forced to make further layoffs, after what it announced in June:

"For the last two months I've had constant meetings with the representatives of Mechel. I thought that they would be interested in turning the company around. I told them that I set up a meeting on September 5th with 40 companies which use metallurgical products. And instead, they told me that they may lay off another 800 employees".

Ioan Vuşcan says that he has sent an address to the AVAS, to clarify the contractual clauses of the privatization of the plant of Câmpia Turzii. Moreover, he has also informed the competent ministers and Victor Ponta about the situation of Mechel Romania.