Safiya and her fellow colleagues have gathered for the third day in a row in front of the factory where she has spent 10 years of her life working. The temperature is reaching 40 degrees Celsius, but the employees seem undeterred from protesting the closure of their factory, owned by an Italian businessman who abruptly ended his operations and left Tunisia.
Safiya and her fellow colleagues have gathered for the third day in a row in front of the factory where she has spent 10 years of her life working. The temperature is reaching 40 degrees Celsius, but the employees seem undeterred from protesting the closure of their factory, owned by an Italian businessman who abruptly ended his operations and left Tunisia.
Safiya is a divorced mother of two boys. “Today, I and my son have become unemployed and we have no source of income whatsoever. The factory closed its doors without giving its workers any prior notice,” Safiya told Correspondents.
A wave of closures
The case of Safiya and her colleagues who work for the Jal Group, which produces shoes, is not an isolated or extraordinary case. There are many foreign factories in Tunisia which are closing down. A European steel company in the Maqarein Industrial Zone in the capital Tunis suddenly closed its plant, laying off 650 male and female workers, only a few weeks ago.
In a statement issued by the general administration of the Leoni Group in Tunisia – a company specialized in the manufacturing of German automotive cables – the group announced in early August that it will temporarily close its BMW production unit in the coastal area of Tunisia.
The decision came as some workers at the car plant attempted to stop work in the factory on July 31 without any prior notice. Workers allegedly insulted and attacked management at the factory, according to the statement.
The three Leoni plants in the Sousse coastal area employ more than 8,000 people from Sidi Bouzid, el-Fahs, Tozeur, Kasserine, Gafsa and several other neighbouring coastal regions. Leoni has been operating in Tunisia for more than 35 years.
172 factories closed
Leoni however is by no means an isolated case. Statistical data indicates that 172 foreign companies have closed their factories in Tunisia since the January 2011 Revolution. According to data published by the Tunisian Agency for the Promotion of Industry and Innovation, the closure of institutions has made at least 12,370 people lose their jobs.
Italian companies top the list. Up to 63 Italian factories have been closed: French companies have closed 60 operations, Belgian companies 11 and German companies 10. Another 28 foreign companies from other European countries have shut down or temporarily suspended operations.
Stagnation at ports
Investors fear that they will experience difficulties shipping their products to Europe because of the deteriorating security situation and the strikes taking place in commercial ports. With such a weak supply chain, many factory owners are suffering from financial difficulties and accumulating debts.
Official sources at the Ministry of Industry confirmed to Correspondents that a national committee has recently been formed under the supervision of the Minister of Industry to try and stop the closure of factories and loss of trade. The source added that “the closure of the Jal Group will have profound social and economic repercussions on the country, given the huge number of workers employed by this group and the importance of its factory in the Bizerte area. This is why it is very important to search for quick solutions.”
Limited compensation for workers
The Ministry of Social Affairs has paid 200 dinars (approx $150) to fired workers in compensation, but the industrial outlook remains bleak.
Mohammed al-Mansoori, secretary general of Bizerte province told Correspondents that the problem of the Jal Group factory is being studied on the local, national and regional levels. “There are many suggestions such as transferring the ownership of factories to a Tunisian or a foreign investor,” said Al-Mansoori. “There are some investors who expressed their willingness to take at least one unit of this compound.”
Al-Mansoori added that “there are efforts to ensure the continuity of the company’s work without laying off workers. The company has many competencies, its production is of high quality and it has markets outside Tunisia, although there are many competitors from Albania, Turkey and Germany competing with the company.”
Investors accuse unions
A Leoni spokesman says the closure was inevitable. “The unacceptable demands of the workers, the increasing numbers of protests and insults to the factory’s administration are among the most important reasons for the closure of some industrial units,” Tariq Shabbir, the Leoni Group’s media spokesman, told Correspondents, adding that the closure is circumstantial and not permanent.
“We felt that the attacks and insults targeting the administration would develop into something more serious because there are unknown parties who want to make the situation worse,” says Shabbir, citing fears in the company’s hierarchy. “Fortunately, trade unions did not react hastily to fallacies promoted by some workers and sided with the Leoni Group trying to reach solutions.”
Workers accused of threatening management
Factory owners consider that workers’ exaggerated demands under difficult economic circumstances, especially in regard to demands for improved wages, were among the biggest problems faced by investors.
But others say the workers are not to blame. “It is not true that social demands and protests are behind the closure of the factories,” says Bashir al-Sahbani, secretary general of the Regional Labour Union in Bizerte.
Al-Sahbani says companies are reluctant to meet recent tax hikes. “Some factories found themselves obliged to pay taxes while before the 14 January 2011 they were able to get tax exemptions,” says the union leader.
The Italian Jal Group asked the Tunisian government to grant them a 12 billion Tunisian dinar ($7.25 billion) bailout in order to resume work at the factory. When the state refused the company’s request, because of the difficult conditions in the country, the factory closed, according to al-Sahbani, who says “the closure of the factory is a big violation of workers’ rights and harms the Tunisian state.”
Trade relocating elsewhere
Al-Sahbani stressed the need for a political decision to make private investors feel safe.
“Today we have a very big file that needs to be studied and that is the file of multinational companies. They are now shutting down their businesses and the owners are leaving the country without any prior notice. The government should give investors enough guarantees to encourage them to stay in the country and there should also be guarantees for the workers,” he said.
Mohamed Ali Boughadiri, a spokesman for the Tunisian Regional Labour Union in Bin Arous, says he isn’t convinced that companies are leaving because they cannot work in Tunisia.
“It is strange that the owner of the European steel factory did not go back to Europe but instead opened another factory in the Aryanah area, a coastal city in northeastern Tunisia,” says Boughadiri. “What is going on is raising many questions that need to be answered.”
Workers loyal despite closures
He stressed that workers had previously worked extra hours without pay to help the factory overcome its crises. “There are workers guarding the factory without pay too because there are expensive goods stored in it and these workers consider the factory as a source of strength for the country,” says Boughadiri.
