It looks as though Buczek Automotive’s fate is sealed.
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The firm, a Polish producer of pipes for the auto industry, has been little more than a husk since June of last year, and industry experts say there is now no hope that it will return to the market.
The latest blow fell earlier this month, when the European Commission announced that it was taking Poland to the European Court of Justice (ECJ) over a failure to repay “illegal state aid” originally paid by its government. The issue is complicated, to say the least.
According to Brussels, Technologie Buczek (TB), a producer of pipes for construction, was given several million euros worth of state aid in 2003 under a steel-industry restructuring programme.
However, as this failed, the Polish authorities allegedly continued to feed it subsidies, increasing the total to EUR5.35m. In addition, TB further riled the commission by spinning off two subsidiaries, Huta Buczek (a producer of cast-iron and cast-steel rolls) and Buczek Automotive, before going bankrupt. Both firms are said by the commission to have benefited from the state aid.
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By GlobalDataKonrad Gruner, a press officer at Poland’s competition watchdog, UOKiK, noted that an appeal had already been filed with the ECJ against the commission’s 2007 order to recover the aid.
In the meantime, two different administrative receivers – the first for Technologie Buczek and the second for Buczek Automotive – confirmed that the money had long been available to repay the illegal debt alleged by Brussels. Unfortunately, bureaucratic issues have complicated the repayment.
At this point, the outcome of these cases matters little to the former employees of Buczek Automotive. Tadeusz Makula, the head of the Solidarity trade union in Huta Buczek, said that around 170 people had been fired when Buczek Automotive went into receivership.
“But it’s a good brand, a mark of quality. It’s still respected and remembered,” he said, noting that the commission had not acted “responsibly” in the issue.
Rafal Orlowski, an analyst at industry publication AutomotiveSuppliers.pl, said that Automotive Buczek’s disappearance was unfortunately symptomatic of the state of the industry. He also called the European Commission’s dogged pursuance of the matter, despite the economic crisis, “disturbing.”
“This is sensitive – no one is going to talk about this matter,” he warned. And, for the most part, he was right.
Representatives of Severstallat Silesia, a member of Russian steel group SeverStal and the main shareholder of what remains of Buczek Automotive, declined to comment. The spokesperson for minority shareholder Eurofaktor, a financial services company, proved elusive.
The administrative receiver of Buczek Automotive was also reluctant to discuss the case, but when pressed about the firm’s future, he conceded: “It doesn’t have a future.”
E Blake Berry
