Romania starts putting Americans out of work

Forty American workers stand to lose their jobs because of Romania. Why is that? Because their employer, Wisconsin Machine Tools Corp., decided to transfer nearly the entire production the factory has in the United States to the two companies it bought in Romania: Saro T=rgoviste and Titan Componente de Precizie Bucharest.

The main reason for the Americans’ decision is not new for the foreign investors coming to Romania: cheap work force.

“An American worker makes some $18 per hour on the average, while an engineer makes some $50,000 a year. Work force costs in Romania are much lower,” Patrick Cherone, partner and chairman of the American company, told Gazette Extra.

Wisconsin Machine Tools Corp., a lathe maker, is planning to retain only 25 employees in the USA, to handle sales and service.

“We’re proud of our Wisconsin-based factory. The point is we have to compete at an international level, and North America has become too expensive for us,” Cherone specified.

The company chairman said the investments in Romania cost the company $12 million, while those in the USA would cost $200 million for the same productive capacity.

The Americans decided to come to Romania after having considered opportunities in Poland, Czech Republic and Hungary.

“They told us they wanted to shift production here from the US the moment they bought the factory. The transfer will take some time to complete, as Saro is still in need of investments to comply with the American standards,” Ion Stanciu, Saro T=rgovisite commercial manager, told Ziarul Financiar.

The American group is a medium-sized one, employing 1,000 people worldwide.

Wisconsin Machine Tools Corp. has invested $11.5 million in its companies in Romania so far, $6 million of which went to Saro.

“A new shipment of four pieces of equipment worth $3.5 million is due to arrive by August-September,” Stanciu specified.

At present, both plants held by the Americans in Romania are carrying out two parallel activities: traditional production and adjustment of American orders.

“We must face it, we’re not yet capable of producing every type of order. We got the necessary technical documentation a few months ago and we are assimilating the info in it,” Ion Stanciu said.

The T=rgoviste-based plant was bought by Wisconsin Machine Tools Corp. from the Finance Ministry in April last year. The Ministry had come to hold a stake in it as a compensation for the plant’s debts to the state. Following the takeover, Saro changed its name into Wisconsin Turning Systems.