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Denso: No Layoffs, Elevated Wage Remains

D&T
May 23, 2020

During the epidemic and under the conditions of temporary production shutdown, Denso Manufacturing Hungary Ltd. managed to save all jobs in the plant of Székesfehérvár's largest employer. They were not satisfied with the government's wage support plan first but now, they use the modified version.

The crisis forced the Hungarian plant of the Japanese company Denso to shut down completely in March. The company overcame this period with the introduction of downtime and other measures. However, the automotive company did not choose the easier solution, i.e. laying off workers. The company did not apply of the unilateral employer measures (called by its critics as ‘slave law’) allowed by the government decree, i.e. the introduction of a working time limit of up to 24 months.

According to Managing Director Attila Szincsák, it is an opportunity, but it should not be abused, which is also a matter of corporate philosophy. “Over the past 23 years, we have been operating by making joint decisions that guarantee the satisfaction and safety of the vast majority,” he said.

The first version of the government’s Economic Protection Action Plan did not meet Denso's needs, so, they called attention for the need of amendments. Various lobbying channels were used, on the one hand through advocacy agencies such as the Hungarian Automobile Association, the National Investment Agency, but also in the relevant ministries, etc. A lot of thoughts were shared and I also got a lot of information about the negotiations between the League Unions and the government, this multi-channel feedback was working, the director said.

Eventually, the government changed the conditions of the original decree and now, Denso uses the wage support package of the Economic Protection Action Plan for 3,700 employees. They also discussed with the temporary employment companies that they should also apply for the support. Still, the package incurs significant additional costs to the company. In order to use the support, the company must add nearly HUF 500 million of its own resources over a period of three months.

D&T

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