The management of ISD DUNAFERR Zrt. reviewed the international market environment, major industry processes, the company’s quarterly results and decided to take new measures in order to secure sustainable business operations for the long run.  

Management introduced several cost cutting measures at the end of 2008 with the intention to stabilize the positions of the business and maintain the level of employment. However, in the meantime, the international business environment has further deteriorated and these efforts were not sufficient to offset the dramatic impact of the global crisis and create a sustainable business environment to help the company overcome business challenges. Management proposed to decrease working week to four days for group employees mid-March, 2009, but this initiative was not accepted by the trade unions.
As a result of all circumstances, a layoff of over 300 from the current workforce was decided by ISD DUNAFERR. In the same time, the company ends agreements with some 100 contracted staff members and facilitates early retirement for a further few hundred persons.
ISD DUNAFERR’s collective agreement provides employees more favorable terms than the Labor Law and qualified employees will be entitled to receive further support from the Steel Fund („Foglalkoztatásért Acélalapítvány”). The foundation pays 80% of the employee’s salary for one year and a further 65 and 50% for six-six months after, when requested and eligible. The company provides outplacement services for those, who do not find employment within a short period of time. The whole process will last till the end of August.
The number of employed workforce after the reorganization program (cca. 7200) will still exceed the level undertaken by Donbass Group at privatization (7005).  ISD DUNAFERR also exceeded its privatization commitment regarding salary payments: during the course of four year the company paid 70% more amount to the salary fund than required by the privatization contract.
ISD DUNAFERR owner, Donbass group, as one of Europe’s major steel industrial companies, is committed to a long term presence in Hungary, and it is convinced, that current crisis does not threaten its endeavors in this respect.
ISD DUNAFERR’s steps are in line with other European producers’ measures. There are countries in Europe, where further layoffs in the industry will be avoided through the provision of specific government assistance. Six months ago, ISD DUNAFERR has started negotiating with the Hungarian government on a loan and a partial compensation package. The slowdown of this process puts at risk the financial positions of the company.

FACTS