Krenholm to cut jobs and close spinning factory in Narva

  • 2003-09-11
  • Sergei Stepanov
NARVA - The Swedish-owned Krenholm textile producer is set to close one of its
spinning factories and eliminate the personnel of other facilities in Narva,
a move that will cut 170 jobs this year and another 400 in the coming 12
months and has sparked proposals for protests from the factory's trade
The equipment from Krenholm's spinning facility, known as the Old Spinning
Factory, will be relocated to the company's other spinning factory in Narva,
according to the board of Boras Wafveri AB, the owner of Krenholm.
While only 170 people have received dismissal notices so far, relocation of
the equipment would automatically mean that all 400 workers of the Old
Spinning Factory would lose their jobs, according to the factory's trade
Krenholm, one of the largest employers in Estonia's economically challenged
northeastern region around Narva, was privatized in 1994 and is now owned by
Sweden's Boras Wafveri AB.
Last week the trade union committee of the Old Spinning Factory approved the
idea of creating a strike committee and carrying out a protest action next
week, when Mats Skogman, the acting CEO of Krenholm, will return to Narva
from Sweden.
Skogman said in an interview with the Swedish newspaper Dagens Nyheter
earlier this month that Boras Wafveri AB has completed its investments into
Krenholm and is now going to use the newly created production capacities
more effectively.
Boras Wafveri AB has about 5,600 employees, and 4,500 of them work for
Krenholm in Narva.
Dagens Nyheter has reported Boras Wafveri will also dismiss 80 out of its
180 workers employed at its textile production facility in western Sweden.
Elena Pahomova, head of the trade union of the Old Spinning Factory,
described the mood of the employees as "pre-strike".
"People do not understand why the owners plan to buy yarn from third-party
producers while our prime cost is lower. We still have not received any
answer to our questions. Many people are stressed, and our medical service
station is working at full capacity," said Pahomova.
The trade union committee has also decided to form a commission of technical
experts to consider potential problems that might occur when buying the yarn
from other producers and to estimate the economic impact of such a policy.
"We do not know why this decision [to buy yarn from other companies] was
taken. The factory is said to be unprofitable, but we do not think so. We
are looking forward to another meeting with [factory director] Raino Erlich,
who should explain everything to us," Pahomova said.
According to Pahomova, in May 2003 Erlich assured the employees of the
factory's good working order and that there would be nothing for them to
worry about in the coming three years.
"Employees planned their budgets and took loans according to director's
assurance. Now everyone is shocked," Pahomova added.
According to the trade union, 170 workers of other divisions of Krenholm
have already received their dismissal notices. In 2004, 300 specialists and
100 auxiliary personnel of the factory will lose their jobs when the entire
Old Spinning Factory will be closed.
Pahomova said the job cut would affect the economic interests of about 2,000
residents of Narva.
Tonu Luman, production director of Krenholm, said in a meeting with trade
union representatives that buying yarn from independent producers is an
established practice and would be effective in Krenholm as well.