Giant Liberty Steel Faces Pressure from Government Over Unpaid Wages

Factory gate of Dunaferr (Dunaújváros, central Hungary).

The government is calling on steel company Liberty Steel in the strongest terms to pay the workers of the Dunaferr (also called Dunai Vasmű) in compliance with its legal obligation, the Ministry for National Economy announced.

The Liberty Group received significant government support until the end of June last year, which helped to preserve the company’s jobs and the livelihoods of the families concerned, the ministry recalled.

It was pointed out that

the Indo-British group has so far failed to keep its promises to develop the ironworks and its commitments to restart production, instead it has been constantly deceiving the public.

The current owner of Dunai Vasmű claims that it cannot pay the salaries of thousands of its workers. This is unacceptable and the government calls on the company to fulfill its obligations and pay the workers’ wages.

Fact

Dunaferr had become insolvent by the end of 2022, making it impossible to operate the factory and threatening the jobs of thousands of workers. Dunaferr was put into liquidation in December 2022, a process that created the legal framework necessary for the factory to survive. By the end of that year, Dunaferr’s operations were prevented from becoming permanently unprofitable, and the plant suffered serious and irreversible damage due to a loss of energy supply and a shortage of raw materials. The only valid and winning bid for the purchase of the factory was submitted by Liberty Steel, which rushed to the rescue of the plant in December 2022, at a time when the steel industry worldwide was going through its most difficult period. However, the plant was once again in difficulty. Liberty developed a 100-day program in which it undertook to stabilize and increase production, integrate purchasing systems, and develop partnerships with suppliers. The company pledged to secure the long-term livelihoods of the workers at the factory and to continue to improve wages.

The government is prepared to intervene immediately to protect workers, and can once again provide assistance from the wage guarantee fund if necessary.

The government, having seen the company’s recent attitude, has already put in place the legal possibility to pay the wages, so that it can act immediately if necessary. In early October, a government decree was adopted allowing for fast-track action in bankruptcy proceedings, so that the appointed trustee can act immediately to ensure that wages are paid as soon as possible. If this happens, it will be inevitable that Liberty’s companies will go into liquidation within a short period of time.

The government will continue to stand by the workers and will do everything in its power to ensure that everyone receives the wages they are entitled to, the ministry concluded.

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