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Považské factory to fire another 500 workers

Even after this year's painful sacking of 400 people, the northern Slovak machinery factory Považské strojárne (POS) still plans to dismiss another 500, despite warnings from unions and the national employment office. The company claims it must cut its work force if it is to survive, but its workers called a strike alert on September 29.
"We cannot act as a social institute in a situation where we don't have finances for our basic development," said Igor Gubala, general director of POS. "When I came here a year ago, administration and non-productive spheres made up 40% of employees. Today, it's 33%, and it's still too high."

Even after this year's painful sacking of 400 people, the northern Slovak machinery factory Považské strojárne (POS) still plans to dismiss another 500, despite warnings from unions and the national employment office. The company claims it must cut its work force if it is to survive, but its workers called a strike alert on September 29.

"We cannot act as a social institute in a situation where we don't have finances for our basic development," said Igor Gubala, general director of POS. "When I came here a year ago, administration and non-productive spheres made up 40% of employees. Today, it's 33%, and it's still too high."

But labour unions faulted POS' low production and bad management strategy for the company's problems. "A year ago we believed in management promises on improvements, but in fact nothing has changed until now," said Pavol Šujak, chairman of the factory's KOVO metal workers' union.

POS had revenues of 1.8 billion Sk ($49 million) in 1996, which made the company the 54th largest in Slovakia. The company currently has 3,400 employees, and comprises 16 daughter companies which have a share in the heavy debts of their parent, currently about 1.5 billion Sk ($41.2 million). A couple of the daughters are profitable, but the rest are highly indebted.

The company's debts have also affected the city in which the factory is located, Považská Bystrica. "We had to get used to the fact that POS cannot be relied on for anything," said Považská city mayor Ľuboš Lackovič. "The factory owes the city 15 million Sk ($412,000) in taxes, which is a tenth of our annual budget," he added.

If the announced 500 employees leave the company, city officials said, they most likely will have to leave the city as well, as Považská Bystrica is unable to offer them alternative emplyment. "Currently, we have 3,400 unemployed people registered. If POS sacks half a thousand, we have nothing to offer them," said Vladimír Svitek, director of the city labour office.

The rate of unemployment in Považská Bystrica region is 9,7%, which is modest in Slovak terms - the national average for August was 13.76%. But town and labour officials warned that if POS did not cancel its plans, regional employment numbers would be dramaticaly affected.

POS management is still in negotiations with its unions.

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