Romania's poorest areas will be the most affected by the financial crisis

Dark times for unemployment at Iasi. With or without being related to the world crisis, the capital city of Moldavia is facing with a dramatically situation in what concerns the layoffs. Hundred of persons have already lost their jobs through collective or individual layoffs. The local authorities estimate that till next spring other 2.000 persons risk to be dismissed, directing the unemployment rate of Iasi to rise over 10%.

The world crisis will hit the Iasi county , but its effects will be strongly felt in a few months. The capital city of Moldavia is already facing a wave of layoffs that will take vast proportion at the beginning of next year. For spring, the local authorities estimate an explosive unemployment rate, of more than 10%. The main branches that will be affected by this calamity are the textile and metallurgy industry. The subject was debated also in the Social Dialogue Commission, organized by the Prefecture of Iasi, where it was tried to be anticipated the problems that Iasi will face in the fallowing period.

Back to ‘90s

The jobs crisis was felt at Iasi even before the beginning of the world financial turmoil. Layoffs in mass started even in the first months of 2008. Per total, from January till September there were dismissed 495 persons in Iasi. It’s about the employees at SC Unirea, Forest Department of National Forest Administration, TEBA and other military units. “In case of layoffs in mass, the employers have the obligation to inform us with at least 30 days before emitting the dismissal decision for adopting some measures to counteract the unemployment and to prevent the unfavorable social effects”, Gabriela Vasilache, director of the National Agency for Labor Force Occupancy (NALFO) Iasi, within the Social Dialogue Commission, said. The employers are also constrained to give a notice, according to the stipulations of the Labour Code or of the collective employment agreement, to the employees that fallow to be dismissed. During this period the employees will participate to the services of pre notice realized by NALFO Iasi which consist in: informing concerning the legal stipulations related to the protection of unemployed and giving them services of occupying and professional forming, placing the free jobs existent on local plan and training in methods of searching a job, professional reorientation within the unit or through short term forming courses, testing the employers opinion and advising them in what concerns the measures of counteracting the unemployment. If the persons dismissed by collective layoffs don’t benefit of certain advantages, there are also persons that aren’t at least protected by unemployment. At the level of Iasi, since the beginning of this year through individual dismissals, 162 employees of Iasitex company, 49 of Bivafilro and 44 within CET have lost their jobs.

The crisis will be felt in a few months

The dismissals announced are hardly a preamble of what the world crisis could cause at the level of local economy. The representatives of the Iasi Unemployment Agency aren’t at all optimistic. They say that in only few months, the unemployment rate could double at the level of Iasi county. “According to the estimations, as a result of the discussions with the representatives of the business environment, in the first quarter of the year, the unemployment rate could touch about 10%. It’s an alarm signal on which we draw the attention for preparing measures which to diminish the negative effects of this crisis”, Gabriela Vasilache stated within the Social Dialogue Commission. An unemployment rate of 10% would mean to return to the situation since 1995, as the data of the Statistics County Direction indicate. At the level of Iasi county, the highest unemployment rate was recorded in 1995, when 12,7% of the active population, about 50.000 persons, was registered to NALFO as loosing their jobs. Starting with 2000, when the unemployment rate started to fall, reaching this year to lower than 5%. The dramatic character of the situation was also stressed by the prefect that estimated that thousands of persons could be dismissed till spring. “The effects of the world financial crisis are starting to be noticed also in Iasi. Several companies are in danger of bankruptcy. Of the signals given by the economic operators it is estimated that the layoffs will continue, reaching somewhere to 2.300 persons, in the fallowing period. For the next year it is estimated that the unemployment rate will touch an alarming quote of 10% in Iasi, at the moment being of 4,7%”, the prefect Marius Bodea mentioned in the last meeting of the Iasi Social Dialogue Commission.

Former Tomiris closes, Tepro sends by turns the employees at home

The metallurgic and textile industry seem to be the most affected by the new situation on the labour market. The Indians of the former Tepro (Arcelor Mittal Tubular Products) have already announced limiting the activity. At least tempo- rarily, the producer from Iasi will operate at 70% of the capacity. Directly affected were those 650 employees, of which half would be forced to stay by rotation at home. “As a result of the discussions with the ownership we were said that due to the lack of demands, half of the employees will be sent home, by turns following to benefit of 75% of wage. Most of our departments were affected and taking into account what is happening at global level, in what concerns the steel demand, I don’t think that till the end of the year the situation would change”, Constantin Rotaru, president of the trade union “Virgil Sahleanu” recently stated. On these terms, a big part of the employees will be in technical unemployment during the cold season that will probably extend a few months. The representative of the employees from Iasi say that limiting the activity will affect the business plan of the unit. For 2008 it was estimated a production of about 110.000 tons, which partially till the summer was realized. The leader of the trade union assures that the new measures aren’t a preamble to a new wave of collective dismissal, neither voluntary nor imposed by employers. Other companies that have announced collective dismissals in this period are Teba Dye and Teba Straight, companies that operate in the buildings of the former Tomiris unit. It seems that the representatives of these companies want to move the activity in states where the labour force is cheaper, such as Republic of Moldova, China or Bangladesh. On pretext of lack of demands, the headquarter of Teba Industry that is at Arad was closed. The lucrative facility from Iasi will be also closed till the end of the year. The current situation seems that it isn’t due to the financial crisis, the dismissal of those 1.050 employees of both lucrative facilities starting yet in July. The situation in case of the companies Teba seems to be even more difficult because the employees won’t receive compensatory wages. For the moment, in those two companies, there are 425 inhabitants of Iasi with work permit, of which 80 are in prenatal care. Of those 345 employees will remain only 100 to finish the last orders, following that till the end of the year the companies to be definitively closed.

Fortus also faces difficulties

Another area in which could turn up social problems is the former Fortus Heavy Machinetools Works. The representatives of the company elaborate in present a reorganization plan of the company. In case in which this program won’t be approved in the Credit Assembly, that will take place till the end of this year, the company could be put in the situation of dismissing over 1.700 employees. According to the NALFO representatives, besides these collective layoffs will take place also individual ones, at the level of small companies, or the ones of the companies with private and public financing.

Two units closed at Botosani

Also other counties of the North-Eastern region of the country don’t manage well the situation. At Botosani, two companies have announced closing the activity and the layoff of hundreds of employees. After the company MBB has sent in unemployment hundreds of employees, other two companies from Botosani have announced that they can’t pay anymore the employees, asking to be granted by NALFO Botosani the before dismissal services. It’s about Codin Dorohoi, with activity in the construction area and Lonfil, in textile industry. According to the director of NALFO Botosani, Iulia Cocris, Codin Dorohoi has disposed the dismissal of those 235 employees by tehnical reasons specific to the company. In case of the ready-made clothes company Lonfil, the reasons for layoffs are represented by diminishing the capacity of production as a result of the sales market fall. According to the notice hand in towards NALFO Botosani, Lonfil will dismiss starting with November 28, 102 persons of those 132 employees, among which there are simple workers and also directors or economists. The unit has dismissed of the labour force also during this summer.