Varga seeks to save Dunaferr jobs [Updated]


Could the government save the day and prevent the loss of 1,500 jobs at the Dunaújváros-based ISD Dunaferr steelworks? National Economy Minister Mihály Varga has promised to look into the possibility, which would certainly save the town from a financial catatrosphe – and certainly win the Orbán administration a few votes in next year’s parliamentary elections.

Last week, Oleg Mkrtchan, CEO of Dunaferr’s Ukraine-based parent company ISD Donbass, announced the laying off of some 1,500 staff from the Dunaújváros operation; this would represent just under 20% of the entire workforce there.

The decision on the staff cuts came about due to Dunaferr’s losses mainly related to low operating efficiency. Mkrtchan had stated on August 9 that over the past two years, ISD Dunaferr had incurred losses of HUF 50 billion (approximately $224 million), “as a consequence of the low operating efficiency compared to our competitors,” as quoted in Hungary-based business website Portfolio. Donbass privatized the company in 2004.

Donbass management launched official procedures related to the dismissals on Thursday, August 15.

However, hope may have arrived: Yesterday Varga verbally swooped onto the scene, telling Hír TV that “I think it is a fair offer from the government to say that we should sit down and talk about how we could reverse the bad privatization [of ISD Dunaferr] of 2004.” Varga went on to state that he would begin discussions with ISD Donbass ownership “in the next few days” on a government takeover.

Update: On Wednesday, MTI reported a couple of reactions from the Dunaferr side on a proposed deal between the government and the Hungarian business. ISD Dunaferr spokesman András Mezőközy call news of a government buyout offer a “surprise”, and deferred on further comment other than to state that acceptance of such an offer would be made by company owners, rather than management. 

Dunaferr CEO Evegeny Tankhilevich told the news service that he’d heard nothing about any intention to nationalise the company and added that management would certainly turn down such a chance.

– Material by Gabor Pakozdi was used in this report

Farmgate Prices Fall 25.4% in February Crops

Farmgate Prices Fall 25.4% in February

Hungary in Talks on Attracting More Chinese Investments - Sz... Int’l Relations

Hungary in Talks on Attracting More Chinese Investments - Sz...

Close to 2,500 Companies Apply for EV Subsidies Automotive

Close to 2,500 Companies Apply for EV Subsidies

Olympic Fest of Street Sports in Budapest Coming This June In Budapest

Olympic Fest of Street Sports in Budapest Coming This June


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.