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Bulgaria's Faltering Military Giant Goes for All-out Strike

Business » INDUSTRY | December 3, 2012, Monday // 17:33| Views: 1037 | Comments: 0
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Bulgaria: Bulgaria's Faltering Military Giant Goes for All-out Strike File photo

Thousands of workers of the largest Bulgarian military plant, the state-owned VMZ Sopot, will be out on an effective strike as of the morning of December 13, 2012, the Podkrepa ("Support") Labor Confederation announced Monday.

The workers are outraged by the constant delays of their salaries, and will protest with demands for securing orders for military factory and better working conditions in the winter.

The new strike at VMZ Sopot comes after a preliminary "warning" strike in November led to the signing of an agreement between the state-owned plant and the labor unions providing for the payments of delayed salaries by the end of the month.

However, by November 30, 2012, the workers failed to receive all of the dues.

On November 5, 2012, the Bulgarian Privatization Agency made it clear that a local company, Emko EOOD, is the only bidder with any chance to win the tender for buying the ailing military plant as the other two applicants failed to meet the privatization criteria.

The employees of VMZ, which is located in the town of Sopot in Central Bulgaria, have not received their payments on time in the past 1.5 years.

The syndicates have been insisting for a while that Bulgarian Economy Minister Delyan Dobrev approve a request for a company loan for the still state-owned arms producer so that the workers can get paid and the plant can purchase raw materials for its produce.

They also claim VMZ Sopot is not short of orders, and that it can be a successful producer, with the VMZ management doing everything necessary to request a company credit that has not received the Economy Minister's approval.

The troubled VMZ Sopot is the largest Bulgarian military plant, and has been expected to be privatized.

Candidates applying to buy VMZ Sopot will be eligible to bid for it if they demonstrate they have enough funds to cover its mounting debts, totaling some BGN 140 M, according to the strategy for the privatization of VMZ Sopot adopted by the Bulgarian Parliament in 2011, and the future owner  will not be allowed to lay off workers in the first three years after buying it.

Sopot, where the plant is located, is the birthplace of Bulgarian writer and poet Ivan Vazov, after whom it was named. The plant was founded in 1936, and during the communist period was developed into a large-scale military industrial unit.

VMZ Sopot produces anti-tank guided and unguided missiles, aviation unguided missiles, artillery ammunition, fuses. It also manufactures civilian products – it makes diamond tools, abrasive discs and grinding wheels, gas cylinders, food industry equipment, and household appliances.

VMZ Sopot has been in a troubled financial condition in the last few years. In 2007, Bulgaria's Privatization Agency started to sell some of the plant's assets in order to cover part of its debts; some of its assets were also sold at the beginning of 2009.

The bulk of the Bulgarian military-industrial complex was created during the communist period when the People's Republic of Bulgaria made lots of cash by selling arms mostly to developing countries. Together with the former USSR and the former Czechoslovakia, Bulgaria was the third COMECON member specializing in the defense industry.

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Tags: ilitary-industrial complex, defense industry, VMZ Sopot, military factory, minority stake, state-owned, Defense Minister, Defense Ministry, privatization, delayed salaries, Delyan Dobrev, Economy Minister, Podkrepa Labor Confederation, syndicates
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