Johnson Electric to shut down Ózd plant

Automotive

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Johnson Electric on Tuesday said it plans to shut down its automotive parts factory in Ózd (about 123 km northeast of Budapest), citing changes in market demand, according to a report by state news wire MTI.

The plant employs almost 800 workers.

The move is to take place over several stages and is scheduled to be completed by April 2022, the company said.

The company's management said it will work closely with the government, the local council, the employment office, and other employers in the region to help the affected workers find new jobs.

The shutdown of the plant does not affect Johnson Electric's base in Hatvan (51 km northeast of Budapest), which will continue play a key part in the company's global production chain. The company also has a European service center in Hatvan, which provides engineering, financial, IT, procurement and tax services.

Responding to the news of the closure, Innovation and Technology Minister László Palkovics said the government would do everything in its power to maintain the local level of employment.

He noted that the government had supported the acquisition by Hungarian hot tub maker Wellis Magyarorszag of ABB's plant in Ózd, after the Swiss-owned company left the city.

The Wellis plant will create 800 jobs - almost as many people as ABB laid off - with 300 hires starting work this year already.

Palkovics said his ministry's state secretaries would meet with local officials on Wednesday to weigh the possibilities.

"In the interest of keeping the plant's ability to create value as a single entity, we will look for investors that can take over the plant together with the workers. We will offer incentives to other companies to set up their bases in the city," he added.

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