Mass layoffs commence at Dunaújváros steelworks as 1,700 workers lose jobs in a single day
According to their reports, the group redundancies at Dunaferr's successor companies have started. As a first step in the process, the contracts of the intermediary workers were terminated earlier, and on Monday the approximately 1,700 employees of Dunarolling Dunai Vasmű were made redundant.
According to Zoltán Magyar, the local president of the Vasas trade union, workers were called in alphabetical order in hourly shifts to receive their dismissal notices. What started as a 20-minute delay in the morning grew into a three-hour backlog by the end of the day.
The wave of redundancies continues:
on 1 July, the employees of Duna Furnace Dunai Vasmű Kft. will also receive their redundancy notices.
Two potential investors are interested in Dunarolling, which is in liquidation: a Chinese and a Czech company. On the other hand, no bids have been received for the sale of Duna Furnace, which further complicates the situation of the company.
The situation has deeply affected the local community, with some employees sharing their stories on social media. One worker reported being dismissed after 34 years of service. The steelworks has been an integral part of Dunaújváros since the 1950s, with almost every local family having some connection to the facility. Images from Monday showed long queues of workers waiting for up to two hours outside the plant's iconic entrance to receive their dismissal notices.
The long road that has led here
The plant's recent troubles began after it was acquired by Liberty Steel, an Indian company, following the bankruptcy of its previous Russian-Ukrainian owners. Despite promises of revival and significant state support, including approximately HUF 100 billion in various forms of aid from the Hungarian government, Liberty Steel gradually ceased operations and failed to pay wages.
The company's problems were not unexpected. Liberty Steel had been involved in significant litigation over unpaid acquisitions from ArcelorMittal, with a GBP 140 million deferred compensation payment ordered by arbitration for plants purchased in various European locations.
The Hungarian government had facilitated Liberty Steel's entry through emergency legislation, bypassing parliament and modifying bankruptcy laws. The company won the tender with a EUR 55 million bid in August 2023, receiving additional support through modified environmental regulations and carbon quotas.
The situation reflects a broader trend in European steel manufacturing, where Asian companies, particularly from China and India, have become dominant. The largest European producer, ThyssenKrupp, ranks only 40th globally, while the industry systematically declines or transfers to Asian ownership.
Liberty Steel's pattern of acquiring troubled steel plants across Europe, followed by minimal investment and requests for government support, has been observed in multiple countries. Similar situations have unfolded in the Czech Republic, Romania, and the UK, where the company's operations have faced significant challenges.
The closure marks the end of an era for Dunaújváros, where the steelworks has been central to the city's identity since the 1950s. The plant's skilled workforce, particularly in specialised roles such as smelters and welders, represented significant value that will be difficult to replace. The situation of the workers is particularly serious, as they have lost their lawsuit against the termination of their collective agreement, which represents a significant financial loss for them.
The Hungarian state's HUF 100 billion investment in attempting to save the steelworks appears to have been lost, raising questions about the due diligence process in selecting Liberty Steel as a partner, given the company's well-documented financial troubles and ongoing legal issues in other European operations.
Cover photo (for illustration purposes only): Getty Images
