Labour force expenses in the car parts industry have surged by over 25% this year, according to market players, a situation where Romania starts losing its cheap labour force advantage, its main plus to other Central and East-European states.
How long until car parts producers start relocating to Baltic states, Morocco or Ukraine?
"The labour market is under high pressure at this moment and a solution could come from the authorities, in form of market liberalisation for instance.
Thus, labour force could be temporarily imported from abroad," Florin Ionut, an administrative and financial officer with SWES Romania, a company with 106m-euro turnover and over 4,500 employees, told ZF Transilvania.
In recent years, the automotive industry has attracted some of the biggest foreign investments and has been one of the most dynamic sectors of Romania.
Moreover, car parts producers have been the biggest employers for several years among also given to labour force availability. In the past year, though, the situation has changed and the job offer in this field exceeds demand, forcing producers to raise wages in an effort to retain skilled workers.
The declared unemployment rate in Arad and Timis county, where most automotive companies have concentrated, stands below 2%. Nevertheless, Romania is still a "fashionable" destination for car parts investors, but this trend is going to weaken in the following years, according to market players.
"Considering that the entire Romanian industry is coping with a major crisis generated by an overvalued RON exchange rate and a workforce deficit, I do not foresee any short-term improvement in the automotive sector," specified Ionut.
Producers are complaining the rising salary costs have already started eating into their profits.
In the opinion of Florin Ionut, competition on international market is really fierce and any cost savings that can be obtained is taken into consideration when a contract is awarded to a Romanian firm.
"As a result, automotive companies of Turkey, Morocco, Ukraine or Baltic states where costs are much more competitive at this moment than Romanian firms' costs are already enjoying a great advantage when bidding for projects of some European carmakers," said Florin Ionut.
Companies that have seen labour costs go up this year include Sumitomo Electric Wiring System, Faurecia Seating Talmaciu, part of French Faurecia group and Alcoa.
Some companies solved the problem related to the labour force shortage by deciding to expand their production facilities toward areas where the personnel they need is easier to find.
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