With apologies to George Orwell, it could be said that the financial crisis has hit all industries equally - but some more equally than others. One of the hardest hit has been the manufacturing sector, as Slovenian company Prevent Global would testify. The automobile parts manufacturer specialises in the sewing and manufacture of car upholstery but has found few takers for its services during the economic slump.
The company is now going through bankruptcy proceedings. At first sight it might look like a simple case of a company killed by the recession. But look deeper and it becomes clear that there has been something far more complicated going on at the company.
Prevent Global had a revenue of EUR 42m in 2009, but it was not enough as it effectively made a loss of EUR 7m. These results led to the company begin restructuring procedures in January of this year. The initial plan was to move workers from the company's factory in Radlje ob Dravi to Slovenj Gradec. Between 350 and 400 would have been made redundant. But it seemed like the move might keep the company afloat, as outstanding loans amounting to EUR 55m were extended.
Unfortunately, there was a problem that the plan didn't solve: an ongoing battle between the two leading shareholders in the firm. Janko Zakeršnik (with 52 percent ownership) and Nijaz Hastor (with 45 percent) have long disagreed over the best course of action for the Planet Global. Zakeršnik went as far as banning Hastor from the company's management or supervisory boards. One of the residual effects of this deteriorating relationship was the relocation of labour abroad. Hastor's company Prevent DEV became Prevent Global's only customer.
On July 22, Prevent Global finally declared insolvency. Although there were hopes of going through a debt restructuring process, it ultimately proved impossible because of firm's lack of orders and the fact it only had one client. This has greatly affected the 1,260 workers employed in the Koroška region, as well as the rest of the firm's workforce. Employees have not only had to face redundancy but are still owed considerable back wages, with the company not even paying social contributions. A series of strikes has ensued, with many workers having to take aid from charities to survive.
Search for a partner
The number of people affected by Prevent Global's problems is such that the government has pledged to do all it can to help the ailing company. But it won't simply be a bailout. Instead, the Labour Ministry is supporting the workers who have lost their jobs by providing financial aid and employment retraining programmes.
To avoid liquidation, Prevent Global is searching for a strategic investor who would be able to acquire what remains and develop it from that point on. Prime Minister Borut Pahor and Economic Minister Darja Radić have been assisting in the search for a suitable investor. Rumours suggest that Renault was approached, but the deal fell through as the two majority shareholders of Prevent Global apparently requested too much. The current frontrunner is Boxmark Leather, an Austrian leather manufacturer which also owns a plant in Kidričevo. The company represents the same part of the market and it also has orders from some very large automobile brands, such as Mercedes Benz and Volkswagen.Boxmark Leather has stated that it could employ 250 workers in the first month, and up to 700 in the first six months, depending on economic support. The situation remains uncertain but it seems that in spite of a bad economy and a shareholder struggle, some Prevent Global workers might be able to get back to work.