Former Mechel Campia Turzii employees in Romania start strike to demand redundancy payments

Soon after Mechel sold its factories in Romania for a symbolic amount, and after the new owners asked for insolvency for Mechel Câmpia Turzii, over 100 laid off employees have started a protest in front of the factory, on Wednesday morning (February 28 ). The employees are asking for the three compensation salaries to which they were entitled, and which they say they never received. They forced their way into the unit to talk to the manager, and broke a window of the office building in their attempt to enter. A five-person delegation from the strikers entered the factory to talk to the management. The former employees say they were entitled to receive three salaries as redundancy pay within 45 days of being laid-off. In total, 700 people made redundant in January and February are entitled to get around RON 3,500 to RON 4,000 (some EUR 780 to EUR 900), and protesters say they were counting on the money to pay bank loans and bills. The union leader of Mechel Campia Turzii Ioan Pascu accused the management of Mechel Romania of having sold the factory without notifying the union leader, again breaching the collective work contract . “There are no sale documents. We will submit complaints at the Territorial Work Forces and go to court against Mechel Campia Turzii,” said the union leader. Invest Nikarom, the company which recently took over Mechel's four factories in Romania for the symbolic amount of USD 70, has asked for the reorganization of Mechel Targoviste, the largest of the four. Should the four factories be eventually closed down, around 5,000 people will lose their jobs. The buyer is controlled by Victor Chumakov and Svet­lana Chu­makova, both of Russian nationality. The two are reportedly the parents of Olga Chu­makova, the head of Mechel's office in Romania, who said in autumn last year that the factories will not be closed down. The company had a turnover of EUR 350,000 in 2011 and a loss of EUR 28,000. Meanwhile, the four factories posted a turnover of EUR 874 million in 2011, and a cumulative loss of EUR 121.6 million. The factories also have a debt of some EUR 570 million, mostly to companies in the group. Romanian officials are yet to issue a statement on the situation of the four factories, whose closure would have an impact on local economies in the four cities, as well as on the national economy. The four factories, Ductil Steel S.A., Campia Turzii S.A., Mechel Targoviste S.A., and Laminorul S.A were temporarily closed down in fall 2012, because of the unfavorable prices on European markets, with the growing price of scrap metal and the low demand for final products. The sale is in line with Mechel's strategy to exit the European metallurgic sector, which is suffering chronic losses. “With a significant loss for the Romanian companies in 2013 estimated at 2.4 billion Russian roubles (around USD 80 million), the current transaction will have a positive financial impact on our shareholders. The freed cashflow will be re-directed to the operational activity and to reducing the company's debt,” said Evgeny Mikhel, general manager of Mechel.