Several thousand workers at Romania's state-owned bearing factory, Rulmentul S.A. Brasov, walked off their jobs last week in solidarity with up to 18,000 other workers facing looming layoffs in the city's state-run enterprises.

As the country's largest bearing manufacturer, Brasov produces ball bearings, linear bearings, tapered roller bearings and needle roller bearings. It is entirely vertically integrated, producing its own balls, cages, and races -- along with machine tools and parts to make the bearings.

The Romanian government's state-run businesses are increasingly weighed down by their communist-era legacies of overemployment, rampant inefficiencies, ancient technologies and quality issues. Virtually every state-run business is a money-losing proposition, continually draining the government's ability to deal with the inevitable exposure to open market, real-world economic realities.

In response, and to free up capital in support of new, smaller, privately-funded businesses, Romania recently announced a program of sweeping market reforms and employment cutbacks. This follows several years of privatization efforts which have had only limited success.

Overall, the plan calls for 19,000 jobs to be cut from state-run businesses nationwide. Brasov, a heavily industrialized city north of Bucharest, will be hardest hit with 8,000 slated to be cut there.

Although Rulmentul Brasov was nominally privatized in 2000, the company, its workers and their families are deeply tied to the state-run sector of Brasov and the Romanian economy as a whole. The company is now owned 61.5% by the state, 29% by SIF Moldavia and 9.5% publicly.

It was not immediately announced if the layoffs would once again hit Rulmentul Brasov. The company's privatization has already reduced employment there dramatically; from over 6,100 in 1997 to just over 3,000 today.

Cutbacks in other state-run heavy manufacturing businesses would affect Rulmentul Brasov both directly and indirectly, not only by affecting direct sales but also via the indirect effect of opening the door to stronger competition from other bearing producers. Brasov's sales are approximately $65 million; the company holds a 35% market share in Romania but relies heavily on state-run businesses and government-guaranteed contracts.

Finally, Rulmentul Brasov is lately faced with increasing competition from other Romanian bearing producers now operating as divisions of some of the world's largest bearing companies. Koyo owns the former Rulmentul S.A. Alexandria bearing factory in Alexandria. Timken owns the former S.C. Rulmenti Grei factory in Ploiesti. Both are being aggressively upgraded and have received considerable investments in plant and equipment. And INA will soon begin constructing an entirely new facility there in Brasov.

The state-run news agency reported as many as 18,000 people took part in the Brasov demonstrations against the layoffs, many shouting, "We will die, we will fight, we will defend Brasov." The protesters were headed off by special police.