Romanian bearing manufacturer, SC Rulmenti SA Barlad (a 91% owned division of Kombassan Holding, Turkey) has laid off a total of more than 800 workers, or nearly 30%, as sales have fallen rapidly over the past several months. Remaining employees will be on a unique rotating schedule.

The company initially tried to adjust to falling demand by reducing working hours, extending planned shutdowns, adding shutdown periods (a week-long shutdown in March and a two-week shutdown through early May), cutting hours, and other approaches, but has been forced to cut back on its core employment.

Through the remainder of 2009, Rulmenti Barlad said it expects sales to be off by as much as 35%. The company has little direct exposure to the auto industry, although it does export 65% of its bearing output for rail, light industrial and heavy industrial applications. Rulmenti Barlad produces bearings under the URB and KRS brands, and in late 2007 acquired Hungary's MGM Bearing.

CEO Corneliu Pricope said, "Were we to reduce the number of employees in line with the order drop, then half of our 2,800 people would have had to go. However, there's the possibility of calling them back, once operations allow it." Mr. Pricope went on to say there are some indications bearing demand might pick up later in the year, but they are too vague right now for serious planning purposes.

After the 800 layoffs, just over 2,000 employees remain. However, beginning in May, those remaining workers will start working a unique work / layoff schedule. Each month, half of the employees will be working and half will be laid off, collecting 75% of their pay. The next month, the second group will work and the first group will be laid off, collecting unemployment. Mr. Pricope indicated the alternating layoff scheme could allow the company to reduce output by as much as 70% without compromising operations for when demand does recover.

The Romanian government strongly urges businesses to avoid permanent layoffs, particularly as unemployment in the Barlad region now hovers near 13%.

Mr. Pricope also mentioned government help should come in the form of limiting imports of cheap bearings from China, particularly into the Romanian mining and transport industry markets.

Romanian bearing manufacturers, including Rulmenti Barlad, are strong net exporters. The country exports more than four times as many bearings as it imports, and the market for import bearings is generally limited to high-precision and specialty bearings not produced in Romania.

Rulmenti Barlad is a subsidiary of Turkish industrial conglomerate Kombassan Holding, which acquired the company from the Romanian Privatization Agency in June 2000.