When are you going to start the furnace? The company doesn’t want to say. At the same time, it concerns the entire region

10/11/2023 19:20 | Reportage

“Like many other industrial enterprises throughout the Czech Republic, we are very concerned about the government’s increase in energy prices, which will increase the cost of our regulated electricity by up to 30 percent next year. This will also put even more pressure on businesses that are already suffering from high electricity prices, rising inflation and high input costs combined with low customer demand,” complains the management of Liberty, the largest smelter in Ostrava, about the conditions provided by the government for business. stopped the blast furnace for a couple of weeks.

Photo:

Jan Stepan

Description: A blast furnace was shut down in the largest smelter in Ostrava. The leadership of the Moravian-Silesian region fears massive layoffs from Liberty Ostrava, which would cause major social problems in the region

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Domestic companies are beginning to pay for the high energy prices, which are often higher than those of our European neighbors, despite the fact that the Czech Republic is a significant exporter of electricity, with low competitiveness and thus major economic problems. For example, the director of the Economic Policy Section of the Union of Entrepreneurs, Bohuslav Čížek, stated in some media that large energy consumers in the Czech Republic have the fourth most expensive electricity in Europe, and if the government does increase the price of regulated components in the total value of electricity next year, it will be for the aforementioned the competitiveness of the industrial economy in the Czech Republic a big blow. These concerns are certainly not unfounded, as is now evident in the case of Ostrava’s largest smelter, the Liberty company with six thousand employees, which stopped operations at its last blast furnace in recent weeks due to high production costs, especially in the case of energy, when it is difficult can compete with its industry competitors from other parts of the world. This was confirmed by ParlamentnímListům.cz and the management of Liberty Ostrava.

“Like many other industrial enterprises throughout the Czech Republic, we are very concerned about the government’s increase in energy prices, which will make the cost of our regulated electricity 30 percent higher next year. It also puts further pressure on businesses already suffering from high electricity prices, rising inflation and high input costs combined with low customer demand. This is caused by competition from other EU countries, whose governments subsidize companies’ energy costs, and further by historically high imports of cheap steel from countries outside the EU, which have subsidized energy and do not pay carbon taxes. We continue to call on the government to introduce more effective measures to support large industries such as ours and thus protect hundreds of thousands of jobs,” said Kateřina Zajíčková, spokesperson for the multinational company Liberty Ostrava, about the position of the company’s management.

Trade unionists: The situation is not good, but there are no layoffs yet

Of course, several thousand employees of the company are worried about the stoppage of core production. The situation is therefore closely monitored by both trade unionists and some representatives of the state administration, such as the government representative for the Moravian-Silesian region Jiří Cienciala, the former head of Třinecké železáren, who draws attention to the fact that stopping the blast furnace and its subsequent start-up is a technically and financially demanding matter, which raises great concerns for the future. However, trade union representatives from the Ostrava smelters are still quite optimistic for the time being and believe in the soon restoration of blast furnace operations.

“A planned meeting with our management about the continued operation of the company with union representatives has not yet taken place, although it was planned for earlier this week. The situation is certainly not good when the main production operation is not running as it should. For now, however, we are grateful to the company’s management for the fact that they have not started layoffs and we hope that the blast furnace will start up again before long and will be producing again. The current problems are mainly caused by high energy prices in our country and also by the system of expensive emission allowances, which makes our production much more expensive. Due to the poor economic situation in our country and throughout Europe, we are also facing a lack of more lucrative orders. Some of the production employees have now been transferred to other jobs, some are still maintaining the blast furnace and other aggregates in such a condition that they will be functional in the future. We are to meet with the management in the next few days,” informed the union chairman at Liberty Ostrava, Petr Slanina.

However, the management of the company also stated that the blast furnace is now in a so-called hot shutdown and does not want to comment on its restart at a specific date.

The collapse of the Ostrava smelter would put the region in big trouble

The management of the Moravian-Silesian Region is also very concerned about the shutdown of the furnace, and thus the actual halting of the main production program, which would have to deal with very unpleasant social problems in their region in the event of the company’s insolvency and massive layoffs. Jan Krkoška, the governor of the Moravian-Silesian region, therefore commented on the current situation at Liberty:

“I am watching the events at the Ostrava Liberty Ostrava smelter with great concern. Shutting down the operation of the last blast furnace can have significant impacts on the lives of the employees of this company, but also on the companies linked to Liberty. The loss of jobs for hundreds, if not thousands of people would affect the economic and social situation in our region. Therefore, I strongly urge the management of the company to take its next steps in this situation with maximum responsibility and empathy towards its employees, as well as the region of which it is historically a part. I believe that the company’s management is looking for an optimal solution that will help make Liberty Ostrava’s operation more efficient, while minimizing the negative impact on jobs and thus on the community of our region.
Maintaining the stability of our region is also extremely important because of the transformation it is undergoing. We are gradually moving away from heavy industry towards innovation and the latest technologies, yet we are aware of how important a role heavy industry has played in our development and that it will remain a part of us in a way. I believe that further development in Liberty Ostrava, taking into account all the above, will lead to further development, not the downfall of this company, which has intensively shaped our region and its history for decades.”