Bulgaria's Largest Military Plant Set for 'Warning Strike'

Industry | October 22, 2012, Monday // 19:39|  views

Bulgaria's largest military plant, state-owned VMZ Sopot, has been in financial trouble and mismanagement for many years. File photo

The workers of VMZ Sopot, Bulgaria's largest military industrial plant, are set for a one-hour warning strike to protest the fact that their salaries have been delayed, a syndicate announced.

VMZ Sopot's more than 3 200 employees have not received salaries since July 2012, and their financial situation is very bad, explained Dimitar Atanasov, local head of the Podkrepa ("Support") Labor Confederation, as cited by Mediapool.

He elaborated that even though the state-owned military factory has orders from clients, it is unable to execute them because Bulgaria's National Revenue Agency has frozen its accounts because of its debts to the state amounting to about BGN 150 M.

"We insist that the tax agency remove the distraint on our bank accounts so that we can buy raw materials for our products and thus get the workers paid," Atanasov reiterating a call that has been made by a number of union leaders in the past couple of years.

He emphasized that Bulgaria's other major trade union, the Confederation of Independent Bulgarian Syndicates (KNSB), has also backed those demands, and that the two syndicates will join their efforts in coordinating the workers' protests.

Atanasov said the military plant employees are prepared to blockade the east-west road running through Central Bulgaria.

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: Military-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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