Adient on shutdown: Slovenia no longer best country cost-wise

Slovenj Gradec – The US multinational Adient today explained its decision to close down its Slovenj Gradec affiliate by saying that “internal assessments and discussions with key clients have shown that Slovenia is no longer considered a best cost country”.

As a result of the discontinuation of production of components for car seats and interiors in Slovenj Gradec in the northern Koroška region, 412 people will lose their jobs by the end of the year and a further 18 in May next year when the operation will have closed down.

“The local and regional management teams have relentlessly been striving to find new business opportunities for the Slovenj Gradec site, but with no significant results,” Claudia Steinhoff, director communications EMEA at Adient, told the STA.

A release from Adient said “negative future prospects and declining cost competitiveness for Adient in Slovenj Gradec have forced the intended closure of the plant”.

The company said it had thoroughly considered all alternative scenarios to preserve operations and employment in Slovenj Gradec but “the analysis has not led to any other conclusion than to close the plant.”

Adient, a global leader in automotive seating, says it has worked out a plan to ensure an organized, reconcilable phase-out of production activities by end of 2021

Responding to the news, the employees said that they did not understand why the owner had made such a decision practically overnight given the company’s good results.

The trade unions urged the government to take action. “I’m disappointed they decided without any social dialogue,” Jaka Šilak of the ZSSS trade union told the press, noting that the company’s workforce accounted for 10-15% of all active population in the Mislinja valley and announcing efforts to convince the Adient management to remain in the region.

Igor Hovnik of the works council said that the company was doing well, adding that the Slovenj Gradec plant was costlier though than other affiliates, with workforce cost presumed to be the main reason for that.

The Economy Ministry told the STA that it would do everything in its power to help the employees, adding that it would respond to an invitation to a visit to the company as soon as possible.

Labour Minister Janez Cigler Kralj will visit the company in the near future, the ministry said, pointing to a number of measures designed to help workers who had lost their jobs find another one.

Jani Prednik, an MP of the opposition SocDems who hails from Koroška, highlighted that closure as well as other layoffs or threats of downsizing in Koroška would mean a social catastrophe for the region.

The Koroška arm of the Chamber of Commerce and Industry (GZS) said that Adient was one of the key employers in the region. And while there are signs of hiring by other manufacturers in Koroška, it is unlikely all the Adient employees would find another job.

The company’s latest annual report shows the Slovenj Gradec plant posted just over EUR 90 million in revenue in 2019, 10% less than a year before.

Adient’s other production site in Slovenia, in Novo Mesto, manufactures car seating for Renault and Daimler. Borut Varga, an official of the Novo Mesto operation, told the STA Adient was not shutting down anything in Novo Mesto.