All 9,000 Arcelor employees temporarily laid off because of strong RON

Billionaire Lakshmi Mittal will cut production at Romania's biggest steel plant down to about half, resorting to temporary layoffs (15 days) for all 9,000 employees because the plant has lost export competitiveness amid an appreciation of the RON against the dollar and amid a lack of orders from the Turkish market, one of the company's leading markets. Since the end of June, the Romanian currency gained 15.7% on the dollar. Year-on-year the dollar devalued by 7.2%, less than the around 8% inflation, which amounts to an appreciation of around 0.8% in real terms. "Such a measure was previously taken in April, but only targeted a segment where orders were lacking and involved a much smaller set of workers. Now, all employees, from workers through to managers will be laid off temporarily, for 15 days. The management cited as reasons for the dramatic drop in production the decline in orders from Turkey, the dollar/RON exchange rate, which is unfavourable for us, and the production cost, which is not covered by the sales price," says Gheorghe Bezman, chairman of the Galaţi branch of Metarom (the steel workers trade union federation).