The state of the plant seemed irrecuperable from which a successful recovery was unprecedented in Hungary.Continue reading
The government had done its best to save the steel producer Dunaferr (also called Dunai Vasmű) in Dunaújváros (central Hungary), but Liberty Steel failed to meet its obligations, the Ministry for National Economy said.
The ministry’s statement recalled that “due to the irresponsibility of the former foreign management, the misguided sanctions and the energy crisis,” Dunaferr had become insolvent by the end of 2022, making it impossible to operate the factory and threatening the jobs of thousands of workers. The government set up a protection committee and Dunaferr was put into liquidation in December 2022, a process that created the legal framework necessary for the factory to survive.
The ministry noted that the government, on the proposal of the liquidator, Lajos Mészáros, decided to pay the wages of more than 4,000 workers for six months and to provide HUF 16 billion (EUR 40 million) in aid to ensure that the workers of the steelworks would not be put at risk. By the end of 2022, Dunaferr’s operations were prevented from becoming permanently unprofitable, and the plant suffered serious and irreversible damage due to a loss of energy supply and a shortage of raw materials.
The only valid and winning bid for the purchase of the factory was submitted by Liberty Steel, which rushed to the rescue of the plant in December 2022, at a time when the steel industry worldwide was going through its most difficult period.
However, the plant was once again in difficulty. Liberty developed a 100-day program in which it undertook to stabilize and increase production, integrate purchasing systems, and develop partnerships with suppliers. Most importantly, the company pledged to secure the long-term livelihoods of the workers at the factory and to continue to improve wages. According to the ministry, little progress has been made.
The ministry added that the recent collapse in world steel prices had posed a new challenge not only to the Hungarian steel industry, but also to the European steel industry. “Everyone is in trouble,” they wrote, adding that steel companies across Europe are suffering, thus the difficulties at the Dunaújváros factory are far from unique. The ministry said
the current situation in the steel market is not reassuring, and the situation of the Dunaújváros steelworks is uncertain.
The Ministry for National Economy is in constant consultation with Liberty on its future plans, in particular on the payment of wages. The ministry drew attention to the fact that it is always the responsibility of the employer to settle the wages of its employees, and therefore called on Liberty to continue to do so in the future.
Via MTI, Featured image: Wikipedia
