Ljubljana related

15 Jul 2020, 09:49 AM

STA, 14 July 2020 - Home appliances maker Hisense Gorenje will not lay off production workers as initially planned. The company will instead employ soft methods to reduce the workforce, since orders have grown in recent weeks and June was the first profitable month this year.

The latest previous plan was to lay off roughly 300 workers in the production unit Gorenje in the town of Velenje, the group having already let go of 46 employees at the back-office unit Hisense Gorenje Europe in June.

Initially, as many as 830 people were to be laid off in Slovenia.

"Due to the altered operating circumstances, the management of Hisense Gorenje has decided to employ soft methods to improve work efficiency at the production company Gorenje," reads a statement issued on Tuesday.

The increased orders are "good news for the company and its employees" and a result of measures taken to improve operations and adjust to the consequences of the coronavirus pandemic, which has included changing business models, accelerating online sales and cutting costs.

These measures will continue given the unprecedented uncertainty and instability on the market, the company said, confident that the positive trends will continue in the months to come.

The in-house trade union expressed satisfaction today that the management decided to follow its recommendations. Its head Žan Zeba expressed hope that the company would now focus on goals it had set for itself and start showing results "that will benefit all stakeholders".

23 Apr 2020, 12:08 PM

STA, 22 April 2020 - The Chinese-owned group Hisense Europe is planning to close 2,200 jobs by the end of the year as a result of the coronavirus pandemic, including as many as 1,000 in Slovenia, TV Slovenija reported, citing a trade unionist.

According to the report, the management of household appliances maker Hisense Gorenje set its plans at a meeting featuring Chao Liu, one of the executive directors, production manager Tomaž Korošec, staffing officials and representatives of the works council, trade union and the employees' representative on the board Drago Bahun.

The management presented data on the situation resulting from the pandemic. Production in Velenje has not yet returned to full capacity after being completely suspended for three weeks.

The head of the in-house trade union Žan Zeba told the public broadcaster that Hisense was to make 1,000 people redundant in Slovenia, including 700 at the production facility in Velenje and 300 in the Ljubljana-headquartered company Hisense Europe.

Zeba said the staff were shocked by the extent of planned layoffs, noting that the company had received state aid "probably also in order not to make redundancies".

The first meeting with employees on layoffs are to be held after May day holidays.

Gorenje is to set out detailed plans about job cutbacks on Thursday.

20 Apr 2020, 14:10 PM

STA, 20 April 2020 - Revoz, the Slovenian subsidiary of the French car maker Renault, continues to top the Delo list of Slovenia's largest exporters, followed by pharmaceutical companies Lek and Krka, and the household appliances maker Gorenje, the only four companies whose exports exceeded a billion euro in 2019.

Revoz recorded exports of EUR 1.77 billion, followed by Lek with EUR 1.48 billion and Krka with EUR 1.4 billion. Gorenje was at EUR 1.12 billion, shows a list published by Delo on Monday.

The top ten is rounded off by aluminium producer Impol, steel group SIJ, industrial conglomerate Kolektor, home appliances maker BSH Hišni Aparati, foundry LTH Castings and aluminium producer Talum.

Overall merchandise exports totalled EUR 33.5 billion in 2019 and trade continued to grow through February, but the coronavirus pandemic has probably already led to a sharp contraction.

Delo says the major exporters are now preoccupied with mitigating the damage, as supply chains have been interrupted and entire industries ground to a halt.

"We definitely don't expect a repeat of the results from previous years, but the survival of the company should not be jeopardised," Jani Jurkošek, the general manager of SIJ, told Delo.

Srečko Stefanič, the boss of chemical company Melamin, said that "we cannot count on a reversal of the trend ... before autumn, while the recovery and the return to what had already achieved may take a year or two."

Delo's annual list includes 110 companies that have reported their results. While the top ten are broadly unchanged, some major companies do not yet have audited results for 2019 and have therefore not been included on the list.

14 Apr 2020, 10:21 AM

STA, 14 April 2020 - Companies which have suspended their production due to the coronavirus epidemic are gradually restarting operations and joining those that have only partly shut down or have not closed shop at all. As of Tuesday, a number of major businesses will be active again.

Household appliances maker Gorenje, owned by China's Hisense, temporarily shut down its operations on 23 March. The company's plant producing washers and dryers started its operations last Friday and other production lines in Velenje are expected to restart today.

Adria Mobil, which shut down on 18 March, saw its support services and management resume their work last week. Assembly lines will start running again on Tuesday, with the company introducing flexible working hours to prevent crowding.

Elan, another company that suspended production in mid-March, is sending more than half of its workforce back to work and adopting similar measures of reorganizing shifts to ensure that as few people as possible are working in the same place.

Revoz, the Renault-owned car assembly plant, had considered reopening as well but then extended the shutdown by another week. Restarting operations on 20 April is still questionable though and depends on a number of factors, including the resumption of public transport services, component supply and the developments in France and Spain, a Revoz unionist said on Thursday.

Despite restrictions imposed to stem or at least slow down the spread of Covid-19, it has been business as usual for many major companies, such as food and infrastructure businesses, as well as drug makers Lek and Krka, steel maker Sij, electric motor manufacturer Domel, tool maker Unior and aluminium producer Impol.

Some companies have merely reduced the scope of their operations, including aluminium producer Talum, glassworks Steklarna Rogaška, shoe maker Alpina and Hidria, which mostly manufactures hi-tech products for the car industry.

Another major company, household appliances maker BHS Hišni Aparati, plans to increase production to full capacity this week after it decided to restart three assembly lines in early April.

There has not been a single coronavirus hotspot in any of the companies that have continued to operate through the epidemic. This is one of the reasons why the government is planning to gradually ease restrictions in certain services this week.

All our stories on coronavirus are here

25 Feb 2020, 12:15 PM

STA, 24 February 2020 - The novel coronavirus COVID-19 outbreak has so far had no profound effect on Slovenia's economy, but problems have arisen in certain areas. Economy Minister Zdravko Počivalšek said on Monday that the government was deliberating mitigation measures, such as subsidies to compensate for shorter working time.

The minister pointed out though that any measures to protect public health must not interrupt the flow of goods because the country's exports depended on that.

After meeting several CEOs whose companies have been feeling the consequences of the outbreak, Počivalšek said that the ministry had been keeping track of the situation and its effect on the economy since the start.

He said the situation in Slovenia had been under control so far, but since the country had no influence on future global developments, it needed to be ready to deal with potential challenges.

Despite no major effects being determined so far, the ministry has decided to act in prevention and consider a future strategy in cooperation with economy representatives. Počivalšek intends to present potential measures at the government session on Thursday.

Problems have so far been detected mainly in tourism and logistics while a drop in sales and orders has been recorded in manufacturing, which could lead to a slowdown in production. The government is considering introducing subsidies for those waiting for work to help the affected companies and avoid lay-offs.

Slovenia introduced this measure a decade ago during the economic crisis and Počivalšek said he hoped it would not need to be introduced again.

Closing the borders would be the country's last resort, he stressed.

Slovenia's tourism has been worst hit by the outbreak of the coronavirus - mostly due to travel cancellations of Asian tourists. The situation could be exacerbated by the virus spreading to neighbouring countries.

Last year, 160,00 Chinese tourists visited Slovenia, while Italy is a key market, with 600,000 guests visiting Slovenia a year.

The Slovenian Tourist Board will step up its promotion efforts in nearby countries and it is also hoping to get EU funds for this purpose.

Meanwhile, the Chinese-owned household appliances maker Gorenje said that the situation was under control, but there was some disruption in supplies in China.

Port operator Luka Koper expects to feel the effects of coronavirus in the next two weeks, with its transshipment from or to China accounting for 30% of its total transshipment.

All our stories on cornonavirus and Slovenia are here

23 Jan 2020, 11:08 AM

STA, 22 January 2020 - The household appliances maker Gorenje, owned by the Chinese conglomerate Hisense, will streamline its production by reducing the number employees in support services in production by 176 in different ways by mid-April, the management said on Wednesday. Gorenje decided for the move "because of poor business results".

The measure will affect some 720 warehouse employees, dispatchers, technologists, planners, quality control, production management and similar positions, including those that have been moved from Velenje to Ljubljana as of this year.

The share of indirect production workers at Gorenje currently stands at 29.2% and is thus 8.6 points higher than in a comparable company within the group, Hisense Refrigerator.

The Gorenje management thinks this will help boost the efficiency of production, improve the use of resources and cut labour costs.

The company also plans to modernise its technological processes, increase automation, introduce IT solutions, and optimise the work process.

The management said it would conduct all procedures related to this in line with the law and in talks with the trade union. "The procedure is expected to last until mid-April."

Several workers have already been transferred to similarly paid jobs in direct production, while some will retire, the management said.

Meanwhile, the in-house trade union expressed concern, with its president Žan Zeba telling the STA that they expected the total number of dismissals to be rather high.

The total number of workers will go down also because work contracts will not be extended for nearly 240 people at the end of January, said Zeba, adding that the union was informed about this today.

"When you add up the numbers, it gets quite worrying. They are far from forecasts about production increase," he said, also expressing worry that Gorenje would start outsourcing some of the services that are now provided within the company.

In the next phase of optimisation, the group plans to reorganise the business processes in the newly founded Hisense Gorenje Europe in Ljubljana, which has employed 880 indirect production workers as of 1 January.

Last December, the Gorenje Group estimated its last year's loss at EUR 40 million. The goal for this year is EUR 30 million in profit.

All our stories on Gorenje are here

22 Dec 2019, 09:28 AM

The covers and editorials from leading weeklies of the Left and Right for the work-week ending Friday, 20 December

Mladina: Chinese-owned Gorenje seen as threat by Germany

STA, 20 December - The left-wing weekly Mladina is concerned about whether the Slovenian government is aware of the geostrategic interests involved in Gorenje becoming a Chinese company, predicting that Germany will make an all-out effort to prevent Hisense from making a foray into the European market through Slovenia.

In the latest editorial, headlined Angela Merkel Watching Gorenje, editor-in-chief Grega Repovž writes that Hisense has been unsuccessfully trying to get into the German market for almost two decades as all its attempts have been blocked by Germany and its industry, in particular the Bosch - Siemens group.

He says that this complicates the situation for the Slovenian household appliance company, because the moment it was acquired by Hisense, Gorenje became the company that the European industry and countries, in particular Germany, will do everything to stop in its expansion efforts.

"This is a big game that is not necessarily bad. Wise countries, especially small ones play at several sides, cooperate with various global superpowers thus establishing its power internationally.

"The German government does not feel any true sympathy for Slovenia, we are part of its interest but not its friends. To them, Hisense Slovenija is in fact a more important player than Slovenia," writes Repovž.

He goes on to say that China cares equally little about Slovenia, except when its geostrategic interests are concerned, wondering whether the Chinese government is extorting Slovenia over Gorenje into adopting Huawei's 5G technology, which he infers from Chinese Foreign Minister Wang Yi's visit.

He wonders whether the Slovenian government and intelligence services think ahead far enough, including how Slovenia's position in the eyes of the German government has changed and what will the consequences be for Gorenje.

"It is intriguing that Slovenia is getting involved in these big geostrategic games, but the fundamental question is whether it is fit to play. We are a country without long-term alliances, we do not have an ally of our own like the Croatians, who have Germany, or the Serbs France (and Russia)."

Repovž also notes the geostrategic interests related to retailer Mercator, where it says Slovenia has become vulnerable against Russia, which controls Mercator.

Or Ljubljana airport, where Lufthansa, one of the shareholders of the German operator of the airport, has now taken over most of the air traffic to and from Slovenia. "There was no coincidence in Adria Airways's collapse, only a clear business plan on the part of the competition."

Reporter: Poor governance at state-owned companies

STA, 16 December 2019 - The right-wing weekly Reporter writes about corporate governance at Slovenian state-owned companies in the latest editorial, finding that the executives affiliated with former President Milan Kučan are on their way out.

"Members of Kučan's table on the front page of the latest issue of Reporter (...) are the part of the deep state that is on its way out, their businesses are being taken by a new guard, rift apart into several networks that fight each other ruthlessly for control of the (para)state sector," writes editor-in-chief Silvester Šurla.

He writes that, 20 years ago, three close "adjutants of Kučan ruled" in the energy company Petrol, which "has always been and will continue to be a political company, as long as the state has a major say there. A big sack of money that many of the chosen ones feed from (...)

"Two months ago Petrol saw a showdown between 'red' networks, the losing side being the Borut Jamnik clan, an important member of which was Tomaž Berločnik, who rose to the post [of Petrol CEO] eight years ago with the help of politics and will now likely leave the same way."

Šurla offers Petrol as well as retailer Mercator and household appliances maker Gorenje as examples of how deep in the doldrums Slovenian corporate governance at state-owned companies is.

He says that Mercator and Gorenje were driven to such a poor state by domestic owners and managers that they are now being salvaged by foreigners.

"These days it is priceless to hear and watch how representatives of Russian Sberbank and Chinese Hisense are trying to drive home to the Slovenian public that socialism is over."

Šurla goes on to say that a person from China, the cradle of Communism, had to come to Velenje to spell it out that socialism is over once and for all, that there will be no future for Gorenje without a profit.

Under the headline Thin Red Line, the editor concludes that Mercator and Gorenje are "paying the toll of the notorious 'national interest'. Other 'flagship' state-owned companies are bound to face a similar fate in the future. Once they have turned into a heap of rust and politics is forced to sell them."

All our posts in this series are here

02 Dec 2019, 08:22 AM

STA, 29 November 2019 - The Velenje-based household appliances maker Gorenje, owned by the Chinese conglomerate Hisense, will finish 2019 in the red but hopes to return to profit next year. According to chief executive Lan Lin, this will require a change of mindset, and it will determine whether a TV production facility will be built in Velenje.

Gorenje last year posted a group net loss of EUR 37.7 million, and chief managing director Lin, who is also the chairman of Hisense International, expects it to be in the red at the end of this year as well.

While refusing to reveal any figures, he said Gorenje's business was worst at the beginning of the year but was improving recently due to measures to improve efficiency.

"The first quarter was very bad. In March, things started changing, and a turnaround occurred in May, then July and August were worse because of collective leave, and we were profitable again in September and October," he said.

According to Lin, Gorenje is doing well in Eastern Europe, while in western Europe, especially in Germany, it is considered a low-end brand. "We wish to change that next year. We must raise quality, and our key goal is to raise the prices Gorenje is getting on the market by at least 10%."

Revenue is expected to rise by 5.5% this year and by at least 10% next year.

Western Europe will be crucial, and Gorenje will also start selling in its network Hisense's products such as TV sets, smartphones, air conditioning and refrigerators on European markets and the Commonwealth of Independent States.

Meanwhile, Hisense will start marketing Gorenje and its Asko brand in the Hisense's sales network across Europe and overseas.

A major boost to the group's revenue is expected to be provided by the Chinese market, where Gorenje and Asko are well received. The premium brands Asko and Atag are on sale in more than 200 partner stores.

Lin expects the group to return to profit next year. "We are counting on some EUR 15 million in profit," he said, adding that the group's problems had been detected and would be tackled "step by step".

One of the measures will be to rejig the workforce, with Lin noting that "every 100 production workers support 40 people in sales, marketing, legal and finance ... while the average in our industry is 20."

According to Lin, Gorenje's profitability is crucial for all future investments. Next year some EUR 45 million should be invested in the development of new products, tools and production lines. "If we don't do that, our products will no longer be competitive in five or ten years."

The group's efficiency is also to be boosted through the separation of production in Velenje from administration, which is to relocate to Ljubljana as Hisense Gorenje Europe. "We must become leaner and integrate into Hisense."

Lin thinks Ljubljana will be a better location for attracting talent from all over Europe and is also more appropriate for meetings.

Gorenje also to plans to build a new TV manufacturing plant in Velenje that would employ 1,000 workers but this will depend on the business results, Lin warned.

The plans for the factory are ready but shareholders have put the project on hold because they want efficiency improvements first, he explained. "If all goes according to plan we will definitely realise this project."

Lin thinks the government will provide a financial incentive for the project but said it would not be substantial and noted that companies should not rely too much on government support.

He also revealed that through Asko, talks were under way for the takeover of German TV manufacturer Loewe and that the outcome of the talks should be known in the next few days.

If the takeover is carried out, the TVs would be produced in Velenje.

Asked why Gorenje is reducing its labour force if a new factory is planned, Lin said they were laying off people whom they did not need at the moment.

He would like the work for 100 people to be conducted by 80 people in the future, and they would receive extra pay for the extra workload, while the rest would work at the TV factory.

The Gorenje management is also in regular contact with trade unions, he said, adding that it had proposed a new round of talks only a few days ago. The open issues include a pay raise and the payment of a Christmas bonus.

The group plans to continue selling non-core assets, including some profitable companies, he said.

Hisense remains one of the main UEFA sponsors and next year Gorenje will be promoted at the European Football Championship in what will be its first promotion at such a level, Lin said.

All our stories on Gorenje are here

13 Nov 2019, 08:03 AM

STA, 12 November 2019 - The mayor of Velenje has appealed to Prime Minister Marjan Šarec to prevent the head office of the household appliances maker Gorenje being moved to Ljubljana as planned by its new Chinese owners.

Mayor Bojan Kontič sees the plans, announced by Gorenje in late October, as yet another step to centralisation, which he says is one of Slovenia's key problems.

A press release from the Velenje city said that the mayor's letter of protest had been forwarded to Chinese Ambassador to Slovenia Wang Shunqing, Economy Minister Zdravko Počivalšek, Chamber of Commerce and Industry chairman Boštjan Gorjup and the media.

The reaction comes after Gorenje announced it would split up into two companies as part of its integration a year after it was taken over by Hisense.

The management and administration was to move to Hisense Europe, headquartered in Ljubljana, which was to provide corporate support services for all Hisense companies in Europe.

Production was to remain based in Velenje, now Slovenia's sixth largest city where Gorenje has been operating since its inception in 1950.

The release from the city administration expressed concern over the latest activities and plans in what has been the pillar of the local economy for seven decades and one of Slovenia's largest exporters.

"The current situation at the company, the new management's plans and the mood among the employees are far from the promises and commitments the new owners made upon the takeover," reads the release.

The local government met Gorenje chief managing director Chao Liu and representatives of the staff and their trade union in recent days over what it described in today's release as a critical situation.

The employees are worried and scared because of conflicting information about the company's plans and future, which they do not get until after they have become facts, say the city authorities.

"Due to substantial pressure on stepping up the work tempo, sickness absences are getting longer, increasingly many qualified staff is leaving, employees, including those with disabilities are being made redundant, and discontent among the employees is growing by the day."

Arguing that moving highly-qualified staff to Ljubljana does not augur well, the city authorities say they believe the Gorenje management can run the company as well as it stays in Velenje.

The local authorities are also concerned about Gorenje's plan to move its call centre to Serbia, saying it suggests the management was planning to keep only production at minimum possible costs in Velenje.

In response to the mayor's letter, Gorenje said that calls on the prime minister to interfere in business decisions of a fully privately-owned company were unjustified and illegitimate.

The company is planning to accept the invitation to join the December session of the city council in order to present Hisense's plans in detail.

Gorenje expressed understanding for the local community's concerns, while it also said that it fund the local community's support and cooperation exceptionally important.

The company said that Slovenia would gain from the creation of Hisense management hub for the whole Europe in Ljubljana.

The owner is organising the company in such a way as to integrate it into the Hisense corporation's business environment, while also restructuring operations in order to preserve the company and to allow it to grow in the long run, Gorenje said.

It added that this should be in the interest of the municipality in which Gorenje with more than 4,000 employees was becoming Hisense's central production location for the entire Europe.

19 Aug 2019, 13:00 PM

STA, 16 August 2019 - Home appliances maker Gorenje, which terminated the contracts of 60 workers as part of reorganisation last month, has told the STA it was looking for about 100 new workers in production to meet increased demand.

Gorenje representative Denis Oštir said that the new workers would start already in September, would get fixed-term contracts and were needed in all of the company's production facilities in Velenje, mostly in the production of washing machines and driers.

Gorenje, which was taken over by China's Hisense last year, initially expected 270 workers would be made redundant at its parent company in Velenje, but ended up terminating a total of 60 contracts of employees working in back office jobs tied to production, such as storers and quality controllers.

Oštir told the STA that all had been offered employment in production, but only some of them accepted.

As part of reorganisational changes, which have been under way for some time, Gorenje has offered new contracts to a total of 1,393 back office employees, preserving existing wages and other rights.

Gorenje, which employs over 4,000 workers in Slovenia and abroad, recently announced that restructuring would not only be limited to the parent company and would also affect all subsidiaries and business units abroad.

The company has also announced it will build a new TV manufacturing plant that will employ 1,000 workers.

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