UPDATED: 25. SEP 2019, AT 14:45

Košice Region offered to buy the steelworks from U.S. Steel - for €1

Some consider the offer a bad joke.

U.S. Steel Košice workers have announced a strike alert, demanding a salary increase. U.S. Steel Košice workers have announced a strike alert, demanding a salary increase. (Source: TASR)

The Košice Self-Governing Region wants to deal with the mass layoffs planned to take place in U.S. Steel Košice. The company plans to dismiss 2,500 staffers by 2021.

The region has offered to purchase the steelworks for €1 and takeover temporarily, the Korzár regional daily reported.

Representatives are concerned about the future of the company, which is the biggest employer in the region.

“Through temporary entrance in U.S. Steel Košice, we want to avoid the consequences of a negative development in the plant, particularly the layoffs of employees,” said Anna Činčárová, spokesperson of the self-governing region, as quoted by Korzár.

The management of U.S. Steel Košice objected to Trnka’s statements, calling them unprofessional. At the same time, it confirmed that the steelworks is not for sale.

“We consider the actions of the Košice Self-Governing Region’s governor unfair and offensive towards not only the management of U.S. Steel Košice but also its employees,” reads the statement issued on September 24, as quoted by the TASR newswire.

The company wants to assure its employees and the public that they will focus on their business strategy, safe work performance, environment protection and the production of high-quality steel for customers.

Observers do not think the steelworks will accept the offer. Besides, some Smer politicians have criticised the Košice Region’s head.

“Trnka’s proposal is a cynical and disgusting April Fool’s Day joke aimed at people who work in the company and live in uncertainty,” said former Košice mayor and incumbent Deputy PM for Investment and Informatisation, Richard Raši, as quoted by Korzár.

Environmental taxes a problem

Related articleAbout 700 staffers have asked to voluntarily leave U.S. Steel Košice Read more 

The representatives of Košice Region say that they cannot remain inactive.

“We are concerned about keeping the company’s competitiveness, its survival and preserving the employment in the region,” said Governor Rastislav Trnka, as quoted by Korzár.

Trnka has already initiated a meeting with the steelworks’ management, where he was informed about the current situation in the plant and the future vision.

The biggest problem they are currently facing is the so-called environmental taxes of the EU, said U.S. Steel Košice’s CEO James Bruno. The producers from the EU feel discriminated against, claiming that non-EU steel producers have a competitive advantage, Korzár reported.

Trnka also opened the topic of investment debt amounting to €1 billion, which the region considers to be the main reason for the steelworks’ stagnation, as well as the insufficient sales and the subsequent reduction of staffers.

Headquarters will have the final word

Related articleFuture economic crisis should not affect US investment Read more 

The self-governing region wants to prevent the situation that occurred in the former U.S. Steel plant in Serbia in January 2012. Following the drop in demand, caused by the lack of investments into modernisation, the plant started dismissing its staffers and later fell into debt.

The management of the Košice-based plant cannot decide on the offer, however.

The US headquarters will deal with it after it is officially delivered, Trnka added for Korzár.

Lukáš Lipovský, analyst with XTB company, thinks it is improbable that the steelworks will accept the offer, although U.S. Steel Košice, like other companies active in the sector, is struggling with a drop in the demand caused by the USA-China trade war and the tariffs on steel imports imposed by the USA.

“On the other hand, the American company may be trying to sell its plant in Košice in case demand keeps dropping,” Lipovský added, as quoted by Korzár.

Trnka’s joke

Some U.S. Steel Košice’s employees consider Trnka’s offer a joke that did not work out well. Juraj Varga of the OZ KOVO U.S. Steel Košice trade unions organisation refused to comment.

The Economy Ministry has nonetheless claimed that Trnka has gone off the rails by making fun of one of the biggest employers for his own promotion.

“It’s absurd and irresponsible towards a serious employer but, most importantly, thousands of employees in the plant,” said its spokesperson Maroš Stano, as quoted by Korzár.

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