Economy

Is the engine of Hungary's economic growth coughing?

June 3, 2019, 12:11 pm  english version Hungarian version  
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Storm clouds are gathering over Hungary’s automotive sector: several plants have introduced four-day work weeks, local daily newspaper Népszava reported over the weekend.


The daily has learned from Zoltán László, Vice-Presdident of the Vasas Hungarian Metalworkers' Federation that an automotive factory in the Western Transdanubia region and another in the Southern Transdanubia region have introduced four-day work weeks as of May, and a third one is contemplating to follow suit. There is a policy of zero growth in staff in place at several companies in the automotive and metals industries; the vacancies do not get filled and the fixed-term contracts are not extended.

At the end of April, suppliers to the automotive and machinery sectors have laid off more than 2,000 temporary workers from one day to another
, he told the paper when describing the production crisis.

The current woes of the local vehicle production, metals industry are indicated also by the fact that an increasing number of companies switch to two shifts from three and weekend shifts have been abolished at a number of enterprises. László mentioned as another example that the output at a tyre plant in northern Hungary is now half of what it had four months ago.

The VP of the Vasas trade union added that in the meantime the number of foreign workers - from Ukraine, Serbia, and Mongolia - has been on the rise. This exerts a downward pressure on Hungarian wages. It also happens that Hungarian staff hired temporarily get sacked, while foreign workers are retained.

In light of the above, an article published about the local plants of BMW and Mercedes by German daily Handelsblatt becomes even more interesting, although the information of the paper have been denied since then.

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Cover photo by Ákos Stiller/Bloomberg via Getty Images

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