October 20, 2016 / 8:50 AM / 2 years ago

Samsung enlists Ukrainians to beat Hungary labor crunch

BUDAPEST (Reuters) - Samsung Electronics has recruited Ukrainian workers to keep its Hungarian factory running smoothly, it said on Thursday, in a sign of the unconventional efforts local companies are making to beat a deepening labor crunch.

The logo of Samsung Electronic is seen at its headquarters in Seoul, South Korea, July 4, 2016. Picture taken on July 4, 2016. REUTERS/Kim Hong-Ji/File Photo

Years of emigration to western Europe have created labor shortages in countries on the European Union’s eastern flank such as Hungary, Poland and the Czech Republic, making it tough for businesses of all kinds to recruit.

As Prime Minister Viktor Orban’s government puts up billboards urging Hungarians to reject quotas for distributing mostly Muslim migrants within the European Union, some companies have quietly started peeking abroad to find extra staff.

Local news website index.hu reported this week that Samsung had employed about 120 to 150 Ukrainian workers at its plant in Jaszfenyszaru, east of Budapest, which the company says is Europe’s biggest television factory.

“To ensure the continuity of output and the traditional Samsung quality, the factory has employed foreign workers besides its over 2,600 Hungarian employees since August,” the company said in an emailed response to questions about the Ukrainian workers.

Samsung said it had employed these workers in compliance with local regulations but declined further comment on their numbers or on how many more guest workers it planned to hire.

The company says it has so far invested about 130 billion forints ($465 million) in its factory, which churns out 7 million television sets and computer monitors per year.

Economy Minister Mihaly Varga told the weekly Heti Valasz last month that Hungary may let in more foreign workers of similar “cultural and historical” backgrounds as Hungarians to beat a chronic labor shortage.

Major German carmakers Audi and Daimler have also said they are feeling the pinch from the Hungarian jobs crisis.

Tunde Kis, vice chairman of the government’s investment promotion agency HIPA, has said the “most critical” part of talks with prospective foreign investors is zooming in on areas in Hungary that can provide them with enough workers.

Hungary’s unemployment rate fell to 4.9 percent in the June-August period based on official statistics. Gross wages were up by an annual 6.9 percent in August at a time of no inflation.

($1 = 279.45 forints)

Reporting by Gergely Szakacs; Editing by Hugh Lawson

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