A solution for Tolaram leaves 1,000 jobless in Daugavpils

RIGA - The Mayor of Daugavpils has problems to solve before next year's city council elections. Aleksejs Vidavskis has to look after 1,700 unemployed factory workers as these people wait for "a lucky dip" draw to see who will be able to feed their families.

The local Daugavpils company Stalkers, which employed local people, did not mange to secure the bid to keep the insolvent Tolaram Fibers factory. Ultimately, only about 500 will be rehired.

The bankrupt Tolaram Fibers was in debt to a variety of creditors, but its major creditor, Unibanka, had the right to recoup its lost investment. Unibanka held an auction May 12 to effectively sell not only the plant's equipment but the entire factory itself. Unibanka set the asking price for the industrial site at $9.2 million. The French company Rhodia, which had displayed interest in the production of industrial yarn unit at the plant since last year, won with the winning bid of $9 million.

Only two companies participated in the auction, the other being Stalkers, which bid only $1.5 million.

"There is no possible way the factory is worth that sort of money," said Rihards Eigims, the president of Stalkers.

It seems the biggest losers in the bank's bid to regain lost capital are the workers of Daugavpils. Because the 1,700 employees had worked only five months for Stalkers, they are not able to receive unemployment compensation.

"Some of the former employees at the Tolaram Fibers plant have worked there since its conception, but because of the change of management when Stalkers took over, no workers are able to meet the government's law of working nine months," said Ainars Platacis, lawyer for Stalkers' president Eigims.

Rhodia's representative in the Baltic states, Jean Claude Lordereaux, said Rhodia will not be able to keep all the workers and will be able only to slowly increase employment at the plant.

"We will be appointing management from our factory in Slovakia and then start selecting local foremen and workers to fill the positions required for the production," said Lordereaux. "We are looking for a company to manage and employ staff at the women's undergarment production facility, but the textile fibers section of the plant will be idle for some time."

Rhodia will be employing about 250 local workers in approximately two to three months after management is selected and a full audit completed. Gradually Rhodia will increase its employee base to 500. More people could be hired when Rhodia finds lessees for the undergarment production and textile fiber units.

The unlucky ones who do not receive work under the new mangement will be asking the Daugavpils mayor for a solution to their situation.

"What will happen with the social benefits for workers who do not get work at the plant will be the Vidavskis' responsibility," said Eigims. "He has shafted us [Stalkers]. We have kept people employed in Daugavpils, looked after wages when the plant was shut down, and now he has pushed us aside.

"The local people now have to wait for luck in a lottery to see if they have a job and can continue to feed their families," he said.

A successful bid for the Tolaram Fibers plant required the winner to compensate laid off workers for three months.

"Rhodia has agreed to these demands. For three months we will be paying $16,666 a month to the workers for the time stipulated in the purchase agreement," said Lordereaux.

Daugavpils City Council's spokesman could not be contacted for information on the fate of the jobless.

"There needs to be a lot done to aid families that will soon be famished from being out of work," said Eigims. "Daugavpils already has one of the highest unemployment rates in Latvia. This has just made it worse. Vidavskis has a long road ahead of him."