Turkish Borusan Holding starts discharges

Borusan Holding, one of Turkey’s largest conglomerates and leading importer of construction equipment, fired 70 of their employees. Employees report that the “motivation meetings” at the beginning of the crisis where directors told the employees to “trust the firm, work unselfishly, and we’ll come through without any damage” eventually turned into “meetings of intimidation” where the same people threatened to fire people
Saturday, 27 October 2018 17:17

Borusan Machines and Power Systems, Inc., one of the group companies under the roof of Borusan Holding, US construction equipment monopoly Caterpillar’s distributor in Turkey with 1000 employees, has given the axe to nearly 60 of their employees. The notice reported to the workers’ network formed under the slogan “We will breathe down the bosses’ necks” shows that Borusan Counselling also fired 10 of their employees.

Workers who were fired from Borusan Machines also note that employees who had been working in various departments for various periods of time were given a note that said: “the firm was downsizing due to the shrinkage in the market because of the crisis” in one-to-one meetings. Borusan Holding forced the employees to disclaim their rights to file a reinstatement claim and receive unemployment pay with the protocols they made them sign in exchange for their rights to compensation and a few months’ worths of “incentive pay”. It is unknown how the “blacklists” are formed which are known only by several high-level directors and bosses.

Borusan workers explain that the “motivation meetings” at the beginning of the crisis where directors told the employees to “trust the firm, work unselfishly, and we’ll come through without any damage” eventually turned into “meetings of intimidation” where the same people started to say: “Turkey resembles a car trying to go uphill – and we are the ones pushing it. We will keep going with those who support us leaving their comfort zones, and drop those who don’t.” It was also mentioned that the firm’s locations in the Turkish cities of Antalya and Bursa were on the verge of being shut down.

Another employee discharged during the last wave of layoff points out that they know that it will be more difficult to make ends meet in a long period of unemployment with the ongoing crisis and even more so when the “incentive pay” melts, but they could not stand against it because the employees were not organised.

Among the main product line of Borusan are heavy-duty vehicles, mining equipment, all sorts of cranes, and many others from forklifts to excavators. Caterpillar Turkey is a trademark with one of the largest shares in the construction equipment market. Turkey is one of the countries with the highest import rate in construction equipment business, where domestic production is very limited, especially with the growth in the construction sector. Borusan Holding has been one of the companies who has made huge profits from construction equipment with their “importer” character rather than “manufacturer”. Being known for and bragging with having a significant role in the fact that Turkey has one of Europe’s largest construction equipment pool, the firm’s annual amount of import has reached $7 billion. While the construction equipment sector has a calculable share in Turkey’s import bill, current deficit, crisis of debt, and the currency rate shock it received, Borusan is one of the leading firms who have adopted the increase of import dependency as a “business model” both with their distributing and “manufacturing” operations. With Borusan Mannesmann, one of the firms of the group, Borusan is also one of the most significant manufacturers and importers of steel tubes.

The Borusan Group, whose turnover in 2017 was $4,7 billion, operates in the sectors of distribution of machines and automotive, steel manufacture, energy, and logistics, and all of their income except for in logistics are in Turkish Lira. However, the Group is thought to have had their profitability reduced after the increase in the foreign exchange rate, especially in the sectors other than logistics, where they have a high amount of entry of and dependency on import products and where they made large profits in years.

It is supposed that the increase in foreign exchange rate combined with the difficulty of the collection in the Group which works with vendors and has a high amount of due in, and on the production facet, both energy and steel sectors have been affected by the increase in the exchange rate and commodity. Considering that the Group’s profits in the automotive sector in 2017 were too low, which constitutes 15% of their turnover, foreign exchange debts and the short-term debt burden stemming especially from the distributing network are thought to have become deadlocked. It is also highlighted that the Group, which had been one of the biggest winners of the country within the scope of the economy policies in all of their work lines including automotive, steel, construction equipment, and logistics, is attempting to stick the workers with the bill in a particularly preferred “business model”.

Borusan CEO Agah Uğur had sent an e-mail to all employees in May 2018 regarding the claims that the Group had applied for the reconstruction of their debts. Asserting that the Group, which relies heavily on import, created “added value” for the country and the people, and received $17,1 billion worth of turnover in 2017 and had nearly 9,000 employees, Uğur had said in the e-mail: “The Borusan Group has grown 32% in Turkish Lira, 11% in USD, and made investments worth of 1,3 billion Turkish Lira [more than $232 million] in 2017. We will keep growing, investing, and creating value for our country and people at the same pace this year.”