Workers from Tuzla desperately seek help: How and why "Aida" failed

The once successful Tuzla company, shoe factory Aida, has been constantly in the public eye for the last five years. Unfortunately, not because of business successes, but because of the catastrophic state it is in, writes Istinomjer.ba, reported by the Patria News Agency.

Sale of the company

Workers of this company have been trying to achieve their rights on the streets since 2009. Already in that period, this factory had production difficulties. The sale of the company was mentioned as one of the possible solutions, which unfortunately failed, representing the trigger for the first workers' protests.

In 2010, things did not improve, despite promises and assurances from the TK Government that all the factory's problems would be resolved. During that year, especially in the Lukavac Plant, workers did not receive wages for their work, nor was their employment record credited, and the factory management often threatened them with dismissals. The workers' demands at that time were the payment of a monthly allowance of KM 200 for workers, the crediting of employment records, and a 40-hour work week for the plant.

In the following years, the factory managed to pay allowances to the workers, the volume of work grew slowly, and in 2013, encouraging statements could be heard from the then Prime Minister of the TK Government, Sead Čaušević, and the relevant minister, Željko Knežiček, stating that things had visibly changed for the better and that the restructuring of this company would be successful.

Of course, the above did not come true, just like most of the statements and promises of this prime minister. At the beginning of 2014, a month before the February protests, Aida workers were again on the streets due to the unpaid KM 70,000, which the Government approved at the end of 2013 to continue production in Aida, and due to years of problems with uncredited employment records.

According to the Information on the state of business companies with majority ownership by the Tuzla Canton with a program of measures for undertaking activities in 2014, the shoe factory Aida was in the worst state in its history in 2014.

After the end of the war, i.e., in 1996, this factory had 1,483 employees, while today only 329 people are employed in "Aida". In 2005, 956 employees worked in "Aida", and from 2008 to 2014, the number of employees more than halved – from 693 to 329 employees.

The total assets/liabilities of the company in 2013 amounted to KM 54,955,129, while revenues amounted to KM 1,369,209. The company operated at a loss in the period from 2008-2013, but the amount of loss continuously decreased and in 2013 it amounted to -845,880 KM. The utilization of production capacities in the company in 2013 was at the level of 37%. In May 2014, there were 329 workers employed in the company, which is 7 workers less compared to 2013. The total debts of the shoe factory Aida d.d. Tuzla for public revenues amount to KM 23,113,953.80, while debts for indirect taxes, i.e., value-added tax, amount to KM 6,201.00.

Decline in production

From 2007 to 2013, the TK Government's expenditures for the shoe factory Aida fell from KM 734,757 to KM 154,058, and during this period, the TK Government allocated a total of KM 5,561,777 for "Aida". For comparison, for Radio Television of Tuzla Canton, which has only 98 employees and produces no added value, KM 9,115,100 was allocated from the cantonal budget during this period, almost twice as much money as for "Aida".

Since the February protests, the TK Government has repeatedly dealt with announcing tenders, as well as dismissing and appointing the supervisory board of that company. At the 8th session of the TK Government, Bahrudin Bašić was appointed director of "Aida", and at the 16th session of the TK Government, an advertisement was published to fill the vacant positions of president and members of the supervisory board in "Tvornica transportnih uređaja" d.d. Tuzla, Shoe factory "Aida" d.d. Tuzla, and "Rudnici nemetala Kladanj" d.o.o. Kladanj. This advertisement was subsequently annulled at the 24th session, and a new one was published at the end of November.

Since the formation of the TK Government after the February protests, approximately KM 352,000 has been paid from the Tuzla Canton Budget to the shoe factory Aida, of which a small portion was directed towards the current maintenance of the factory. These funds were mostly directed towards social assistance and social welfare of the workers, primarily those who met the conditions for retirement.

Funds in the amount of KM 66,400 for social assistance to employees were allocated in April, KM 22,000 was allocated in June "as assistance in achieving economic self-sustainability, for costs incurred during the organization of the production process", while in July a total of KM 37,329 was allocated for "Aida" and 7 other companies, for the payment of health insurance for employees. In September, the TK Government allocated KM 37,000 for Aida, as "assistance in achieving economic self-sustainability". In November, the Government again allocated KM 49,200 for social assistance for 328 "Aida" employees, while in December 2014, KM 173,304.54 was allocated for the payment of contributions for pension and disability insurance for 10 employees of this factory.

It sounds incredible that part of the funds allocated in September 2014, which were already minimal, was intended to cover "expenses for business trips" and debts to the supervisory board of this factory, whose workers have not received salaries for years and have uncredited employment records.

Umihanić's rule

It is interesting that during the period of Prime Minister Bahrija Umihanić's "rule" (and not even during the periods of rule of previous prime ministers) there were no initiatives for "forgiveness" or "freezing" of debt to any of the factories in TK, including Aida, although Aida's main debt is to the state, and such a move could truly move things forward. The absence of such an initiative is even more surprising because the state, if Aida does not start production and operate profitably, will certainly not collect even a fragment of these debts.

Before the desperate move of leaving the country, the workers of this factory also spent the night in front of the TK Government, expecting someone to address them. However, neither the executive nor the legislative authorities found it necessary to confront them, but rather, in subsequent sessions, they mostly repeated the already many times-told mantras from the past, such as 'they are doing everything to start production in this factory' and 'they are considering legal options for assistance', and expressed deep regret for the situation the workers are in.

Of course, they did not fail to conclude that the workers' demands for crediting employment records are unrealistic, because a larger sum of money than what the Tuzla Canton has available must be allocated for this, which shows the level of irresponsibility not only of this but of all previous governments in TK, since they are precisely responsible for the situation the workers of this factory are currently in.

At this moment, the authorities in TK state that they are willing to help, and that funds for payment of assistance exist, but that the legal basis for payment of funds does not exist, since funds for one-time assistance have already been paid this year.

Trip to Croatia

However, even if the current situation ends favorably for the Aida workers, the future for the remaining 329 employees in the shoe factory Aida does not look bright. Namely, the Action Plan of the Development Strategy and Social Inclusion Strategy of BiH for the Tuzla Canton in the period from 2014 to 2016 does not mention in any word any attempts to revitalize the struggling companies from the Tuzla Canton, and therefore not the shoe factory Aida.

From the previously stated data, it is clear that no government in the Tuzla Canton, including this one, has offered the workers of the shoe factory Aida anything other than empty promises, and the occasional decision to allocate funds, which could be characterized as charity rather than a serious attempt to pull this factory out of the crisis.

Workers of Tuzla companies, after yet another unsuccessful negotiation with the TK Government, are continuing their journey towards the border with Croatia. Whether these protests will finally move things from a standstill, no one can say for sure.

One thing is certain, if serious measures are not taken soon to save this company, the workers who have set off for Croatia will certainly not face a worse fate on that journey than in Tuzla.