Videoton jobs hope for IBM workforce

By Tamás S Kiss, The Budapest Sun, Vol. X Issue 45, 7 November 2002

Employees at the IBM hard disk drive production plant in the town of Székesfehérvár (60km west of Budapest) have been given new hope following a recent announcement that the site is to close with the loss of 3,700 jobs.

Videoton Holding Rt, the nation's largest independent, privately-owned contract electronics manufacturing group, announced it was in talks with several local multinational companies to utilize the production lines at IBM Storage Products Kft (IBM Storage), a local subsidiary of the Chicago-based International Business Machines Corp (IBM).

Videoton, which owns the site and rented it to IBM, said some leading hard disk drive makers had already shown interest in using the plant.

Ottó Sinkó, deputy CEO of Videoton, said, “We've contacted eight multinational companies.”

He added, “The IBM plant could be of interest to them for electronic products production.”

Gábor Széles, CEO of IBM, said in an interview on Hungarian television that there was a very strong chance that hard disk drive production could continue at the plant under Videoton's auspices.

He added that Videoton was planning a complex offer to exploit the plant's existing tax allowances, fixed assets and workforce.

Sinkó said negotiations were unlikely to be closed before July next year.

“The more business we lure to Székesfehérvár, the more jobs will be saved,” he said.

The Government appointed József Zimmermann, head of the Fejér megyei munkaügyiközpont (Fejér County Labor Center), based in Székesfehérvár, as a Commissioner to manage the crisis.

János Papp, director of western Hungary's industry workers' trade union Vasas Szakszervezeti Szövetség, said the Fejér County Labor Center, together with the regional training center Székesfehérvári regionális képzô és munkaerô-fejlesztési központ and the Székesfehérvár Municipality, had set up a joint labor center on the premises of IBM Storage.

Meanwhile, redundancy talks between the management and representatives of the trade union were ongoing last week, according to Papp.

He said the trade union leader at IBM Storage and a representative of IBM were to sign an agreement regarding the details of wages and annuities for redundant employees on November 4. “The details will be made public after the agreement is signed,” said Papp.

This will be the biggest single mass redundancy in modern Hungarian history.

As things stand employees will be redundant as of January 1 next year. IBM blamed weak global demand for the closure.