Auto-parts producer to close Romanian factory due to worker shortage

Auto-parts producer to close Romanian factory due to worker shortage
By Carmen Simion in Bucharest February 5, 2018

Aptiv Electrical Distribution Systems, a producer of electrical equipment for the automotive industry, is closing down its plant in Romania’s Moldova Noua in March because of the lack of personnel, a spokesperson for the company told bne IntelliNews

Romania’s labour market is tightening. The unemployment rate has been on a downward trend in the past year helped by the robust economic growth in the country. The seasonally-adjusted ILO unemployment rate decreased by 0.9pp y/y and by 0.1pp on the month to 4.6% in December last year, according to recent data from the statistics office.

According to a company statement, the plant, located in Caras Severin county, in western Romania, will be closed down by the end of March. It  currently employs almost 700 people.

“The Moldova Noua location cannot sustain a full project due to labour constrains as lack of workforce in the region and running only one part of a project is not viable,” the company said in an emailed statement. 

“We made the decision to realign our operations in Romania. We will work closely with all relevant stakeholders including employees and labour office to minimise the negative impact and determine solutions to support the affected employees.”

Aptiv’s Moldova Noua facility specialises in the assembly of wiring harnesses for European vehicle manufacturers. Romania, along with other countries in Central and Southeast Europe, has been an attractive destination for the auto-components industry thanks to its low costs, skilled workforce and proximity to Germany and other major Central European markets. 

The company stressed it is not pulling out of Romania, telling bne IntelliNews that it has job opportunities at its Sannicolau Mare plant and Arad Engineering Centre.

However, a new study from think tank Bruegel finds that Romania is joining the other CEE countries experiencing lack of qualified workforce due to heavy migration to Western Europe. 

Romania was the least capable EU country to retain and attract talent last year, the study says. “With the recession and increased unemployment after 2008, labour  shortages became a minor factor. But with the recovery after 2012, labour shortages began to appear again. More recently the severity of this problem even exceeded its pre-crisis peak, especially in central and eastern European countries, and also in north-west European countries," the study noted.

"Therefore, the conclusions reached for the pre-crisis period  continue to apply: emigration from central and eastern European  countries had a major negative impact on their labour markets and created labour shortages, while the migration of these central Europeans to north-west EU countries did not take jobs from local workers." 

ManpowerGroup’s 2016/2017 Talent Shortage Survey showed that in Romania 72% of employees reported difficulty in filling jobs. This was the third highest percentage in the 43 analysed countries, after Japan and Taiwan.

On a more positive note, the ManpowerGroup Employment Outlook Survey issued in December showed that Romanian employers are the most optimistic in the EMEA region regarding hiring perspectives in the January – March 2018 interval. With 22% of employers planning to increase their staff, 64% anticipating no change and only 12% foreseeing a decrease in staffing levels, the seasonally adjusted net employment outlook stands at +17%, the strongest reported since Q1 2009, improving over the January – March 2017 interval by 3pp.