GlobalAutoTV
Click to watch Franz Neumeyer -
Click to watch Franz Neumeyer -
euro resources


Need an office in Europe or Eastern Europe? Office suites, meeting rooms, virtual offices, network access




free downloads
EUROPE: "The European automobile industry: backbone of the European economy" report

EUROPE: "The European automobile industry: backbone of the European economy" report. 75-page report by ACEA European Automobile Manufacturer's Association.

proceed to download
eJournals





back to index backEUROtalk April,  2007


Outsourcing Hotspot Cools as Wages Rise in Poland

Western European companies have outsourced jobs to Poland in recent years.

A few years ago, Poland was a favorite destination for European manufacturers looking to cut costs. But with wages rising and a shortage of skilled workers, it might not remain the outsourcing hotspot for long.

A few years ago, Swedish appliances manufacturer Electrolux closed its plant in the southern German city of Nüremberg and began producing dishwashers in Poland. Carmaker Opel, too, decided to build its "Zafira" in the Polish town of Gliwice.

It's a trend that seemed inevitable when Poland joined the European Union in 2004. With its low labor costs and huge pool of workers, German workers feared their eastern European neighbor would pry away their jobs by becoming the destination of choice for companies looking to stay competitive in an ever globalizing world.

It didn't turn out exactly that way. While Poland was once a prime low-wage destination, that is changing. A shortage of skilled workers has led to wage increases that make Poland less of a bargain for outsourcing than it once was.

Heading further east

Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift:  Skilled workers are in high demand

Electrolux invested 40 million euros ($53.5 million) in the Polish town of Olawa before closing the plant in Nürenberg. The move to Poland meant that many employees of the AEG subsidiary in Germany lost their jobs.

Kazimierz Kimso, regional head of the Polish Solidarnosc labor union, says that little can be done to stop jobs from moving to cheaper locations.

"Naturally, we have solidarity with our foreign colleagues who have lost their jobs. But we also are happy when new jobs come, since unemployment is very high," Kimso said. But, he added, things could just as well change quickly for Poland.

"We are by all means aware that the production today is moved from Germany or other old EU countries to Poland," he said. "But tomorrow this can continue on in the direction of Ukraine. That's naturally a development that we aren't pleased about."

In addition to its low-cost value, Poland also offers other charms for international investors.

In 1996, the Polish government turned the Olawa area into a special economic zone. Investors who wanted to relocate there, were offered lower tax rates. Even with Poland joining the European Union, this tax break will remain until 2017.

The hunt for skilled workers

Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift:  Opel assembles some of its cars in Poland

Despite the obvious advantages of doing business in Poland, international companies are gradually discovering a downside, too.

When Electrolux first moved to the country, the Swedish company had problems finding qualified workers. Boleslaw Januszkiewicz, who heads up a large boat motor plant, has also found it difficult to find employees with the skills he needed.

"At our company, for the boat motor plant, we have between 11 and 150 open positions each month. That's for normally very skilled welders, fitters and controllers. Our wages have increased sharply. The only people who don't earn very much are the new employees who are doing their first apprenticeships," Januszkiewicz said.

Although Poland has cheaper labor costs than Germany, that's no longer a primary reason for companies to relocate to Poland, said economics expert Clemens Rode at the Polish office of Germany's Friedrich Ebert Foundation.

"Now companies have to look beyond wages and compete with each other for good workers," Rode said. It's important for European countries to continue investing there, as a strong Polish economy is good for all of Europe, he added.

Source: Deutsche Welle - GAI


previous page

go top
search our site


Loading

EUROtalk

Other articles from the same issue (April,  2007).

The narrowing European pay gap
play read on

Study: Moving Production Abroad Can Have Positive Effect
play read on

Eastern Europe stumbling on market reforms, IMF says
play read on

Outsourcing Hotspot Cools as Wages Rise in Poland
play read on

Boost for easier EU trading
play read on

Suppliers upbeat about EU CO2 proposal
play read on

Snubbed in EU's 50th Anniversary Celebrations, Turkey Prepares Seven-Year Road Map for EU Negotiations
play read on

Talent management: UK firms try new tactics to attract rising stars
play read on

Europe to increase logistics outsourcing
play read on

Euro strength no threat
play read on

Middle East transport and logistics at crossroads
play read on

Turkey's EU commercial ground access threatened
play read on

European new car sales weak in Q1
play read on

Polish workers go west, Polish companies head east
play read on

UK: Working flat out and feeling fed up
play read on

Germany jobs market picks up
play read on

New EU working time rules
play read on

Buy Globally, Think Globally - Implications of Global Economics for Sourcing Professionals
play read on

Europe: Winning the Multi-Channel Challenge - Customers, Channels and Marketing Management
play read on

Eastern Influx: Automotive manufacturing in Central and Eastern Europe
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120