According to the European Commission, Romania is forecast to advance by 2.5% this year in terms of GDP, one of the most significant growths in the European space. The estimation was offered in the Winter 2023 Economic Forecast, where Romania is among the countries to avoid recession this year.

A story from Manchester defines the economic opportunities Romania has to offer. It also shows how the global economy makes it possible for Romania’s opportunities to impact jobs in the UK. The Machester Evening News, the famous Manchester publication, says that in Sale, one of the towns in Greater Manchester, one big company, Verastar, decided to externalize a whole department to Ascensos. Reportedly, 60 employees were told to relocate to Bucharest, Romania, or lose their jobs. As simple as that.

The management announced to their employees by e-mail that they would move to Bucharest, an unlikely scenario, as they admit it or lose their jobs. Reportedly, the salaries at Verastar Sale reached 27,000 British pounds a year, which means EUR 2,530 a month.

We believe that Ascensos will be able to assist us in meeting those economic challenges. Ascensos will therefore announce that one of their measures will be a relocation to Bucharest in Romania which we feel is the right option due to their location having a wider resource pool, solid infrastructure and technology, which will deliver greater efficiency. We do acknowledge that the work is being moved offshore and, therefore will be seeking clarification from you as to whether you wish to transfer. This may seem obvious since colleagues would unlikely wish to transfer overseas, but it is a legal requirement that we ask. Those who do not wish to transfer would, unfortunately, be placed at risk of redundancy by Ascensos.

E-mail to Veristar employees in Sale, Greater Manchester

The lesson here is pure economics: why pay 60 employees in Manchester EUR 2,500 a month, meaning EUR 150,000, when you can drastically reduce costs with salaries and employ only 30 people in Bucharest with EUR 1,000 or even less a month to do the same job? You have a massive cut of EUR 120,000 a month of your expenses while externalizing the work.

Globalization means business, and this means that employees in the UK might lose their jobs to the benefit of Eastern countries, such as Romania. Globalization doesn’t care about families, friends or life stories, it only means business – the higher the cut of the salaries, the higher the profit.

Fortunately for Bucharest, the city has all that matters to welcome businesses from abroad. Apart from the famous internet speed, Bucharest is one of the European cities where they speak English at a conversational or proficient level. Besides, the salaries in Romania are way lower than in Western countries, thus making it a destination for business relocation.

Doing business in Bucharest seems more profitable than ever, and companies have chosen the city for its opportunities. A crisis in the UK means business in Romania, which is the sad reality of the current economic context.

As usual, we recommend our readers, British or from elsewhere, to visit Bucharest. It would be an opportunity to see the city’s potential and the famous Bucharest attractions that make more than 1 million international tourists visit Romania’s capital each year.

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The new facility will be situated close to the Hungarian border in Oradea, in the northwest, and will have a 6 million-tyre annual production capacity. This project is considered a greenfield investment project reaching an investment worth EUR 650 million.

Due to the war between Russia and Ukraine and the ensuing tightening of sanctions, the board of directors from Nokian Tyres took a decision last month to start a controlled withdrawal from the region and signed a contract to sell its Russian business.

As a result, Nokian Tyres decided to expand its operation plans and invest in a new production plant in Europe in order to secure the supply of its products. As such, the coming Romanian factory is key in reaching its goals.

“This investment is a significant strategic decision enabling our future growth. A world-class manufacturing facility in Europe is a key step in getting additional capacity and creating a balanced manufacturing platform as we start building the new Nokian Tyres without Russia”.

Jukka Moisio, Nokian Tyres Presdinet and CEO

Oradea hosts the perfect location for the establishment and development of the plant due to the green energy produced near the site, the logistical and administrative benefits, and the available skilled workforce.

“After a thorough evaluation of over 40 locations and several factors, such as skilled workforce availability, logistical advantages and stable business environment, it was clear that Oradea was the best choice for our new factory”.

Adrian Kaczmarczyk, Nokian Tyres SVP Supply Operations

Construction of the plant is set to commence in early 2023, while the first tyres are anticipated to be manufactured in the second part of 2024 with an estimated workforce count of 500 employees. Commercial production is anticipated to begin in early 2025, together with an establishment of a house distribution facility for transportation and storage of tyres to be added to the factory site.

*Article photo source: Nokian Tyres Official*

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In seven out of ten cases, Romanians who work for themselves are at risk of poverty and social marginalization. Portugal is the following country in the ranking, although its 32% percentage is far lower than it is in Romania.

The self-employed are people who run their own business, operate a small operation, or engage in a profession of their choosing, such as service and sales personnel, artisans, farmers, technicians, or managers. The statistics office further says that those who engage in such activities typically do not receive a salary but payment directly from clients for their services.

According to Eurostat, the percentage of vulnerable workers increased significantly during a year in Romania (+5). In contrast, the rate fell by 3.7% in Hungary, a neighbouring country. Romania, Portugal and Estonia recorded the highest shares of self-employed people at risk of poverty and social exclusion (70.8%, 32.4% and 32.2%). Romania, in particular, experienced the highest increase from 2020 to 2021.

More than that, International Monetary Fund (IMF) predicted that the unemployment rate in Romania is expected to rise to 5.6% in 2022 from 5.3% in 2021. Unfortunately, the numbers could get worse by 2023.

Some of Romania’s extensive and severe problems regarding the labour force segment are that the Romanian state does not encourage young people to enter the labour market and does not encourage Romanian entrepreneurs who want to develop employment opportunities. Therefore, many people in Romania risk poverty, one of the reasons why Romania has such a large number of emigrants, and it’s facing a massive decrease in population.

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Platinum Standard Certification

Best Places to Work is an international certification program, considered as the ‘Platinum Standard’ in identifying and recognizing top workplaces around the world, providing employers with the opportunity to learn more about the engagement and the satisfaction of their employees and honour those who deliver an outstanding work experience with the highest standards in regards to working conditions.

It was a real challenge and why not, a great curiosity for us to enrol in the Best Places To Work certification program and besides the enthusiasm, we experienced many emotions. We are honoured to receive this recognition, all the more we have learned that we are the only 100% Romanian company to be awarded this title in 2022. The joy of the whole team when receiving the results of the survey is immense. And we are determined to make sure we relive it as often as possible, along with our colleagues, in the future.

Ionel Manole,General Manager for Medist Group

Medic Group on the top of the evaluation

Every year, the program partners with many organizations in Romania, across different industries, to help them measure, benchmark, improve their HR practices and have access to the tools and expertise they need to deliver effective and sustainable change in their organizations. The participating organizations are evaluated through two assessments processes and, on meeting the qualifying criteria, are certified as a Best Place to Work for a period of 1 year.

About Medist Group

Medist, a leading group operating in the distribution and after-sales support of medical instruments and management, has been officially recognized as one of the best places to work in Romania for 2022. Employees ranked the company favourably in all the eight workplace factors of the certification – more than 90% of employees said the company is offering a great atmosphere and provides challenging work, and 92% of employees are recommending the organization, 17 points higher compared to a typical Romanian company.

For more information about the program, visit www.bestplacestoworkfor.org 

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On February 11, the workers started protesting, demanding decent wages. Due to poor salaries, the Cugir Mechanical Plant workers claim that wages are so low that they can only cover the heat and electricity costs.

According to Stiripesurse.ro, one of the workers claimed that after 20 years of work, she received an advance of 100 Euro and a remaining payment of 254 Euro. Another employer said that after more than 40 years of working in the factory for “special products”, he received only 323 Euro.

The protesters demand, first of all, an increase in salaries and justice for all the years dedicated to the armaments industry. The Board of Directors of the Cugir Mechanical Plant should meet on Monday, February 14, to solve the issue.

On the sidelines of the current conflict between Ukraine and Russia, Romania, as a NATO member, plays an important strategic military role in the eastern part of Europe, one of Romania’s armament factories is slowed down by such problems. It is an undesirable problem that Romania is confronted with, especially in the armaments industry. Although Romanian President Klaus Johannis states that the Romanian army is prepared for any situation, one of the essential weapons factories shows the contrary.

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The decision came after the pandemic hit hard the airline industry worldwide, including Romania, but also other countries. Operators from other European countries found themselves in trouble as well and some even filed for bankruptcy.

Recently, the Czech airliner filed for bankruptcy, following the lay-off of the personnel. The Czech operator has debts to more than 266 creditors, mostly suppliers, and 230,000 passengers who are awaiting refunds for canceled flights. The total debts equal $82 million, but the financial burden is too much for any operator from the industry.

TAROM is currently undergoing a restructuring process, approved by the European Commission. The plan mentions the lay-off of 700 from almost 1,500 employees. On the other hand, both major Romanian airline companies, TAROM and Blue Air, are to receive 124 million EUR in state guaranteed loans.

A list of all the airliners in trouble because of the pandemic shows tens of companies who filed for bankruptcy, entered a reorganization procedure or laid-off most of their staff.

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At the moment there are 300,000 Romanians who lost their jobs because of the lockdown measures taken during the last two months. Apart from that, 900,000 are already on technical unemployment payroll, meaning they receive 75% from the state during the emergency situation.

In theory, these 900,000 can start again their work from tomorrow, when the emergency situation ends. In reality, most of them won’t have any jobs left.

Romania is one of the countries where the measures to support the entrepreneurs affected by COVID-19 lockdown are scarce and the budget allotted to this is little. Only 3% of the Romanian GDP will help the economy restarting, as compared to even 10% of other European states.

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