Brno expects a wave of lay-offs

23-07-2002

The Czech Republic's second largest city, Brno, is preparing for massive redundancies at several local companies. Although the lay-offs are expected to cost thousands of jobs in a city of half a million people, the local authorities say they they will have little chance of finding new jobs unless a new strategic investor arrives. Vladimir Tax has more.

The Czech Republic's second biggest city, Brno, used to be home to several major industrial companies, such as the tractor manufacturer Zetor, the arms producer Zbrojovka Brno, and other heavy engineering companies. Over the past decade, some of the traditional heavy industries disappeared, to be replaced by foreign investors who were attracted to the Czech Republic by generous investment incentive schemes.

Brno was happy to host high-tech contract manufacturer Flextronics, which employed over 2,000 people and also stimulated its suppliers to move their production to the Brno industrial zone. However, the company recently announced it was consolidating its worldwide operations and decided to move the Czech factory to Hungary.

Just a few days after that, Brno suffered another shock: the troubled world-famous tractor manufacturer Zetor, once one of the largest and most respected engineering enterprises in the Czech Republic, announced another wave of mass redundancies to take place in autumn.

The laid-off workforce from both Flextronics and Zetor will hit the labour market in Brno approximately at the same time, to join the current 19,000 job-seekers. At the moment, the local labour offices are offering a mere 1,200 vacancies.

The situation has already been discussed by the labour and social affairs minister, finance minister and representatives of local labour offices. They agreed that the key now is to find a new strategic investor to replace Flextronics, one which would not think of moving production further East after it's consumed all the investment incentives.

23-07-2002