Workers from two of Romania's most troubled state-run manufacturers in walked off the job in the industrial town of Brasov, protesting the likely closure of both plants.

Rulmentul Brasov, the state-run bearing manufacturer, was specifically targeted last week as likely to be shut down in the near future. The other plant is Tractorul, a tractor manufacturer.

The head of the Romanian Privatization Authority (PA) said both were now targeted to close, requiring too much financial aid and attracting no sincere interest from potential buyers.

Some hope, he said, remains that at least a part of the bearing or tractor factory might be acquired by an investor and continue operating, but that likelihood is thin.

Romania's Prime Minister, Popescu Tariceanu, said, "there is no solution," and that the government promises to mitigate the effect of the plant closings on the workers and the community of Brasov.

Over 2,000 workers from the two factories had staged a protest march in Brasov, walking off the job and blocking roads in and around the city.

Founded in 1949, Rulmentul SA Brasov is Romania's largest bearing manufacturing facility. Under the RBR and URB (Uzina Rulmentul Brasov) brands, the company manufactures ball bearings, linear bearings, tapered roller bearings and needle roller bearings.

Brand names are difficult to distinguish, however. RBR as a brand is actually registered by Rulmentul Barlad, the bearing factory in Barlad. URB, although it began as the brand for Rulmentul Brasov, eventually became a common brand name available for use by all of Romania's government-run bearing factories.

Since 1992, more than 10,000 state-run companies have been privatized, and 8,000 more are bankrupt. There are approximately 450 remaining in the Privatization Authority's inventory, and it is making a strong push to sell them off by the European Union's deadline of December 2007.

Deeply rooted problems make Rulmentul Brasov the worst and most troubled of the remaining state-run businesses. It has attracted little or no serious investor interest in three years, and the workforce has a history of walkouts, protesting against the few buyers ever showing interest.

Several knowledgeable observers have told eBearing the onerous terms for taking over Rulmentul Brasov are just part of the problem. They require, for example, maintaining the massively bloated workforce rolls, offering benefits packages, paying off accumulated debt, accepting a large amount of worthless finished goods inventory, and other expensive legacy problems. But other issues revolve around "hopelessly antiquated" facilities, with rampant safety and environmental issues, a poorly trained and unmotivated workforce, unhappy customers, lack of guaranteed government sales contracts, and myriad other smaller issues.

Adding to the pressure on Romanian authorities, the International Monetary Fund and the European Commission specifically named Rulmentul Brasov as one of the most important money-losing business which must be closed or sold. The EU said Romania's massive continuing financial support package for Rulmentul Brasov puts the country in violation of several EU trade and government support covenants, and the IMF has taken the same position. In fact, the IMF declared Rulmentul Brasov must be sold by the end of 2005 in order to avoid sanctions; it is not clear what actions may be taken since that deadline has come and gone.

The Romanian government has put Rulmentul Brasov up for sale several times in recent years, then taken it back off the market only to put it up again. This past August 2006, it was once again taken off the market, apparently for good.

eBearing has been tracking the developments in a series of articles:

2005 article: IMF cracks down on Romania, targets Rulmentul Brasov

2005 article: Rulmentul Brasov acquisition terms and conditions set

2005 article: Rulmentul Brasov attracts two bidders

2006 article: Romania rejects last remaining bid for Rulmentul Brasov

2006 article: Rulmentul Brasov privatization effort put on hold