Partial Plant Shutdown at Tungsram from Monday

From this coming Monday, certain employees of the lighting production company Tungsram will be sent on leave due to partial plant shutdowns, because the company is facing an insoluble situation due to economic circumstances, the southwestern Hungarian newspaper Zalai Hírlap wrote on Saturday, referring to the company's CEO Joerg Bauer.

Joerg Bauer said that after this year's first quarter did not go as planned, the company is preparing a partial factory shutdown in April to "reschedule its capacities in relation to customer demand and also to sell its existing stocks." From Monday, there will therefore be a week-long shutdown – and until April 22 at the Nagykanizsa LED lighting factory site – similar to the one that takes place every year but only during the summer period, with the workers concerned being given leave for this period.

According to the CEO, the pandemic, global supply difficulties and the war in Ukraine had left the group facing an insurmountable challenge, and that only immediate government support would allow "the continued operation of the historic Hungarian brand, which contributes to the knowledge society and creates innovative value." He said that the whole European industry was threatened by the spiraling energy prices, the shortage and rising cost of raw materials and transport difficulties.

In the case of Tungsram, these harsh external blows come at a sensitive moment, when the company is still young in its independent life after the buyout from GE in 2018, and is just starting to transform and build its new business to replace its old ones. However, this work cannot be done if you are constantly fighting for survival, Joerg Bauer stressed.

He pointed out that the cost price of a traditional light bulb had risen by 60% compared to last year as a result of rising energy prices. It is very difficult to pass on this price increase to customers, who may find it cheaper to buy cheap Chinese LED bulbs.

The head of Tungsram told the newspaper that the company is facing serious challenges after posting losses in both 2020 and 2021.

The CEO expects two types of government assistance, one is the introduction of state and municipal mandates and various energy efficiency programs, which in the current economic environment would be a win-win for everyone in terms of lower consumption and better quality lighting. The other option is government grants or capital injections.

Joerg Bauer believes that European industry, including Hungarian industry, needs urgent EU and government help to survive. One of the solutions he proposes is the introduction of programs to curb energy consumption, which would reduce the EU's dependence on imported gas and oil. Another idea is to end the dependence on critical raw materials extracted mainly in China and East Asia by boosting and promoting recycling in Europe.