Despite governmental optimism, industry information increasingly suggests that the Hungarian automotive sector cannot isolate itself from the severe crisis in the European auto industry, and the situation may further deteriorate at the beginning of next year. According to industrial production data from the Central Statistical Office, vehicle manufacturing output decreased by nearly 8%, while electrical equipment production (including the battery industry) dropped by 12.3% between January and September this year. The automotive sector’s order volumes in 2024 show a month-to-month decline of around or slightly over 20% compared to the same period in 2023.
What does all this look like from the bottom up?
“It’s not visible from the outside, but across the entire domestic automotive industry, it’s already widespread news that companies are operating at a fragment of their capacities, typically at 30–40%. Factories have already ceased weekend production, and overtime is only present in certain areas” –said Zoltán László, vice president of the Vasas Trade Union Federation, to our paper.
Previously, 24.hu also reported on the appearance of passive, “covert” workforce reductions in the manufacturing sector. According to the vice president, this method has now spread throughout the automotive sector. In concrete terms, this for example means employers unexpectedly subject workers to occupational health examinations, which are stricter than in previous years. Employees deemed unfit are terminated. And the health condition of manual workers is such that many — sometimes even due to just high blood pressure — fail these screenings.
There are factories where over 60 people were deemed unfit in a single day
– Zoltán László stated. Another employer tactic involves enforcing operational regulations with a strictness that was unimaginable during periods of labour shortages. For instance, workers had been able to bring mobile phones to the production area for years without issue, but recently, there have been numerous cases where employees caught using phones in restricted areas were immediately terminated.
It’s hardly possible to accurately assess the nationwide prevalence of such covert downsizing methods, but based on Vasas membership figures, approximately 7–8% of workers may have been affected, estimated the union leader.
László’s statements are supported by the case of Jabil, an automotive supplier in Tiszaújváros. Despite no official mass layoffs being announced at one of Northern Hungary’s largest employers, around 500 (or 800, according to Telex) employees left the company in the past year. According to Magyar Hang, some were dismissed, while others left voluntarily — for example, due to being presented with unacceptable contract modifications.
Mass layoffs of leased workers came to light this year at Mercedes’ Kecskemét plant, while approximately 700 leased and third-country workers were dismissed from SK On’s battery manufacturing plants, according to the VDSZ chemical industry union.
Amid increasing shift shutdowns and passive downsizing, rumours are widespread among workers that government pressure is behind manufacturers’ actions. Allegedly, decision-makers urged multinational companies to avoid official mass layoffs, as reports of large-scale dismissals would be politically sensitive. The government could justify this stance by pointing to the substantial state aid granted to automotive companies since the COVID-19 pandemic, not only through individual government decisions (EKD) but also under competitiveness-enhancing subsidies, amounting to hundreds of billions of forints. However, unions have no evidence supporting these claims.
