The companies working for the defence industry going bankrupt appears inevitable in the context of Romania’s accession to the European Union, despite Romania being a NATO member, therefore a member of an organisation whose goal is to defend its member countries.

Defence companies need a proper downsizing program as they could no longer receive state subsidies given EU restrictions. Trade union leaders see the privatisation program for defence companies as inadequate, which creates the likelihood for Romania to only be a market for foreign weapon industries and the current domestic factories to change their field of operations, at the best.

Mircea Voinea, leader of the “Siteco” Plopeni trade union, said that “there is a great deal of uncertainty over this sector remaining part of the national economy,” reminding that the “lack of firm demands add to monthly losses and environmental issues weapon factories will have to deal with after Romania joins the Union, given they are not aligned to European standards.”

This is why unionists are keen to hold talks with officials at the Ministry of Economy and Trade, “to obtain a strategy from them,” as “so far we have only been given words and nothing happened actually,” Mircea Voinea also said. The relevant streamlining program was discussed with the unions two months ago, but “no major change has been operated,” according to the “Siteco” leader, who said that the reshuffling program requires some laughable amounts for investments in the sector, in the region of ROL 5 bln for all the 17 companies controlled by Romarm,” adding to which are “great management ideas”, industrial parks and projects that take a long time until implemented.

In terms of defence company privatisation and the implicit easiness with which they can change their field of operations, “this has been tried for the past three to four years, yet nobody rushes to do it given the debts of billions of ROL, the old staff and the long-standing state control,” Voinea said.

Most of the nearly 9,000 employees the defence industry has now will be made redundant, with only 800 employees to keep their jobs, of the current 1,450 at Plopeni, according to the union leader’s predictions. The layoffs may come this year to a total of over 2,500.

Although in times of peace, defence industry companies make civil industrial components, “we only cling to small commercial enterprises with whom we close small contracts,” said Mircea Voinea, and for the “branches that have orders, the price offered are small and technologies, obsolete.”

Setting up joint ventures with specialised companies is the only chance defence industry workers might have, as “we cannot convert absolutely all our production into civilian production since the production lines are focused on military output and the change in activity calls for approvals that are difficult to obtain and create a vicious circle,” Voinea said.

Doru Puiu, the “Solidaritea Metal” Vice-President, said that “Government wants to keep in 2007 only 2,400 employees in this sector, while the “ministry is not aware whether there are orders for the companies in the sector,” which means they don’t have a restructuring plan available for this industrial sector.

Union leaders say that for now Romania only produces 10 per cent of what the defence industry could generate, and the operations have not been focused on weaponry and military equipment for a long time now. What the weapon plants are concerned with is dismantling military products into their basic components, which are then sold as scrap metal, the unionists say.

Neagu Ioan, Cugir union president and national secretary of “Solidaritatea Metal” says that “halls and derelict spaces is all that remained of factories, and in the Brasov area, the grounds on which those factories were built are sought to be capitalized upon given their real estate value.”

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