Interview: Apollo Tyres finds skills shortage in Hungary a challenge

Hankook Tire & Technology

11/03/2016 17:19

By Gergely Szakacs 
    GYONGYOS, Hungary, March 11 (Reuters) - India's Apollo Tyres 
 APLO.NS , which is building a half-a-billion-euro factory in 
eastern Hungary, says it is having difficulty finding staff, 
reflecting a wider problem for foreign investors in Hungary. 
    The country is seen as an attractive base in Europe for 
manufacturers because wages are relatively cheap. But a brain 
drain as skilled workers have left for more lucrative pay 
packets in other parts of the European Union or elsewhere has 
limited the pool of available labour.  urn:newsml:reuters.com:*:nL8N12Y1KK 
    "The people with several years of experience that you could 
readily hire are just not there in the labour market for now," 
said Tibor Banyai, Head of Human Resources at Apollo Tyres 
Hungary. 
    India's No. 2 tyre maker has previously said that producing 
in Hungary will make it much more cost competitive to sell in 
the United States.  urn:newsml:reuters.com:*:nL3N12G1NN 
    It also hopes to supply tyres to carmakers in Europe such as 
Volkswagen  VOWG_p.DE , Daimler  DAIGn.DE  and Suzuki Motor Corp 
 7269.T  that build cars close to the Hungary plant. 
    Banyai said he was optimistic the Hungarian plant could open 
on schedule next January with the help of "attractive" wages 
offered to workers, but did not disclose details. 
    While wages in Hungary remain low relative to countries in 
western Europe, they rose 4 percent in December from a year 
earlier, according to the latest official figures, reflecting 
the skills shortage. 
    Apollo is giving its workers extra training in both Hungary 
and India and is spending "billions" of forints to get its 
workforce up to speed to run the factory, said Banyai.  
    "There are certain jobs, which are difficult to fill," he 
said. 
    "It is very hard to find a product industrialisation expert 
with a background in tyre manufacturing," he said. "You can 
count these people on the fingers of your hands." 
    The company has been able to fill most technician jobs from 
the region around the eastern town of Gyongyos so far, but it 
has cast a wider net for engineers, looking to hire people from 
remote areas, Banyai said. 
    He said he would not poach from rival tyre makers 
Bridgestone  5108.T  and Hankook Tire  161390.KS , which also 
have plants in Hungary. 
    Apollo, which is making one of Hungary's biggest greenfield 
investments of recent years, has also received a 606 million 
forint ($2.2 mln) training subsidy from Hungary's government. 
 urn:newsml:reuters.com:*:nL8N12Y1KK 
    While Viktor Orban's government has rattled banks and 
telecom companies with unorthodox new taxes, it is keen to 
attract manufacturers. 
    Hungary's economy is growing by nearly 3 percent this year, 
better than many other countries in Europe, but foreign direct 
investment fell to 1.4 billion euros last year, from nearly 1.7 
billion euros in 2014, according to official figures. 
    Apollo's hiring problems highlight further risks to 
investment. 
    "The market has become more difficult. While last year it 
was easier to hire fresh graduate technicians, we can now hire 
fewer of them from the region," Banyai said. 
    "They have different plans than last year's class. Many want 
to learn different jobs, get a university degree and many 
students plan to go abroad." 
  ($1 = 278.9 forints) 
  ($1 = 0.8964 euros) 
 
 (Editing by Susan Fenton) 
 ((gergely.szakacs@tr.com; +36 1 327 4748; Reuters Messaging: 
gergely.szakacs.thomsonreuters.com@reuters.net)) 
 
Keywords: APOLLO TYRES/HUNGARY