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Machinery industry hits wall

At the end of September, three important Slovak machinery companies called strike alerts. The reasons were the same - unpaid salaries and threats that hundreds of workers would be fired.
Slovak industry indicators released for the first half of 1998 by Economy Minister Milan Cagala, show an overall uptrend. Industrial revenues climbed to 81 billion Sk ($2.3 billion), Cagala said, which is a 38% increase year on year. Meanwhile, losses decreased by 26% to 5.4 billion Sk ($150 million). Exports increased by 41% to 42 billion Sk($1.2 billion).
But according to machinery labour unions, however, these indicators do not reflect the situation in the machinery sector, which accounts for 22.7% of all industrial production. "The insolvency of the Slovak machinery industry has reached 360 billion Sk ($10 billion) this year, which is a 570% increase on last year!" said Emil Machyna, President of the KOVO metalworkers' federation, adding that the sector's bank receivables sit at 175 billion Sk ($4.9 billion).

At the end of September, three important Slovak machinery companies called strike alerts. The reasons were the same - unpaid salaries and threats that hundreds of workers would be fired.

Slovak industry indicators released for the first half of 1998 by Economy Minister Milan Cagala, show an overall uptrend. Industrial revenues climbed to 81 billion Sk ($2.3 billion), Cagala said, which is a 38% increase year on year. Meanwhile, losses decreased by 26% to 5.4 billion Sk ($150 million). Exports increased by 41% to 42 billion Sk($1.2 billion).

But according to machinery labour unions, however, these indicators do not reflect the situation in the machinery sector, which accounts for 22.7% of all industrial production. "The insolvency of the Slovak machinery industry has reached 360 billion Sk ($10 billion) this year, which is a 570% increase on last year!" said Emil Machyna, President of the KOVO metalworkers' federation, adding that the sector's bank receivables sit at 175 billion Sk ($4.9 billion).

Vlado Zlacký, an equity analyst with ING Barings, agreed that the sector was in trouble. A lack of restructuring, inefficient privatisation and overemployment, Zlacký said, were behind the problems. "Now, the machinery companies are in a desperate need of a foreign partner," Zlacký concluded.

The Slovak Spectator investigatedboth the unions' and the companies' points of view. The results are on page 3.

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