Trade Unions, Privatization Agency to Talk Staff Cuts at Bulgarian Military Plant

Business | January 15, 2013, Tuesday // 09:07|  views

VMZ Sopot already owes its employees over BGN 2 M in unpaid salaries, according to reports of the Bulgarian National Television (BNT). Photo by BGNES

Emil Karanikolov, head of Bulgaria's Privatization and Post-Privatization Control Agency (PPCA), has said that he is starting talks for staff cuts at military plant VMZ Sopot.

Under the collective bargaining agreement between the trade unions and the state-owned arms manufacturer, employees of VMZ Sopot can only be dismissed with the explicit consent of the representatives of the Podkrepa Labor Confederation and the Confederation of Independent Trade Unions in Bulgaria (CITUB) at the company.

In a Tuesday interview for private TV station bTV, Karanikolov noted that VMZ Sopot had run up debts of around BGN 150 M and had a total of 3200 employees and could not survive with its current headcount and had to be reformed.

After the privatization of VMZ Sopot was terminated on Monday, Karanikolv argued that the best option for the plant would be to organize a broad discussion involving employees of VMZ Sopot, trade unions, and MPs, to find the best solution to the problem.

Bulgaria's Economy and Energy Minister Delyan Dobrev, as cited by, told journalists Tuesday that he had made arrangements with Labor Minister Totyu Mladenov to refer the dismissed workers of VMZ Sopot to employment programs in the region.

In his Tuesday interview, PPCA head Karanikolov declared that apart from the social problem at the arms manufacturer, the plant had been drained of capital, which explained the lack of investor interest.

Meanwhile, VMZ Sopot employees continued Tuesday their months-long protests over unpaid salaries.

The military plant already owes its employees over BGN 2 M, according to reports of the Bulgarian National Television (BNT).

Bulgaria's Privatization and Post-Privatization Control Agency (PPCA) terminated the procedure for the sale of military plant VMZ Sopot Monday afternoon after the sole candidate to buy the arms maker, EMKO EOOD, submitted a binding offer but failed to transfer the mandatory EUR 3 M deposit for participation in the privatization procedure.

The initial deadline for submission of a binding offer for VMZ Sopot expired on Friday but the governing body of the PPCA decided to extend the deadline by Monday afternoon to enable the sole candidate to give more thought to the bid.

Emiliyan Gebrev, owner of EMKO EOOD, met Friday with the heads of the two trade unions at VMZ Sopot to tell them that he wished to cut the staff of the plant from the current 3200 to around 1800.

In a Monday interview, Karanikolov said that there were three options for VMZ Sopot, including bankruptcy proceedings, the preparation and submission of a new privatization strategy for the arms manufacturer with Parliament, and the removal of the plant from the "strategic list," thereby paving the way for a privatization procedure without a strategy.

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Tags: Emil Karanikolov, Privatization and post-Privatization Control Agency, VMZ Sopot, military plant, privatization, staff cuts, trade unions, Podkrepa Labor Confederation, Confederation of Independent Trade Unions in Bulgaria, CITUB, Labor Minister, Totyu Mladenov, Delyan Dobrev, Economy and Energy Minister


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