An industry winds down

Poland's coal miners, once pampered by communist governments, are beginning to slip down the national pay scales as rising costs and falling demand threaten to throttle a loss making industry which has to shrink if it is to survive.

But mine closures and employment cuts threaten to produce serious social and political problems in Silesia. This is Poland's main mining area which has till now been spared high unemployment. It faces the prospect of major lay offs for the first time.

Thus as losses mount and output this year is due to fall by 15 per cent to around 115 million tonnes, the Polish government has set in train an ambitious restructuring programme aimed at halving employment from 244,000 at the end of last year to 126,000 in 2002.

The plan finds the two main mining unions split in their political allegiances. Solidarity, which is traditionally strong in the mining region of Silesia, supports the government while the Polish Miners Union, backs the former communist opposition. In addition, the unions have been caught off guard by a generous redundancy payments scheme which has proved popular and taken the wind out of mass protests against the cuts.

The programme has set coal output at 112 million tonnes in 2002 and assumes an increase in productivity of 51 per cent. This should see the industry turn a profit of 1.7 billion zlotys in 2002 compared to this year's expected losses worth 3 billion zlotys.

BY THE middle of last month (October) over 16,000 miners had chosen to relinquish their jobs. The majority took the 44,400 zlotys ($13,000) one off payment offered by the government. Others have chosen to go on five years leave paid at 75 per cent of their former wage. Only a handful have volunteered for job retraining courses which are paid at 65 per cent of their last wage.

The redundancy plan is to be part financed through a $1 billion loan currently being negotiated with the World Bank. But it leaves little money for job creation schemes in Silesia itself.

Ryszard Pojda, the managing director of the Rudzka coal company is putting his hopes on a planned motorway which will run past the shafts he plans to close. He plans to establish enterprise zones in their place. These he hopes will attract foreign investors.

But Bogdan Lukaszewicz, the head of MODIOZ, an employment monitoring unit based in the Silesian city of Gliwice, warns that there could be social unrest in Silesia when layoffs come in the steel industry and on the railways.

The unions are aware of this and they are keeping up a muted drum roll of protest just in case the present quiescent mood turns sour. Recently Solidarity led a token street demonstration in Warsaw to demand that the government drop a proposal to freeze mining wages while the restructuring programme goes through.

"This is just a warning to the government that our patience is running out," said Henryk Konieczny, the Solidarity miners leader. "We are more than capable of defending our rights in the streets," he stressed raising the prospect of violent protests if miners decide that the downsizing has gone far enough.