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Gorenje Makes Job Preservation Pact with Unions

Velenje, 19 April (STA) - Household appliance maker Gorenje has made a pact with the unions promising to preserve jobs in Slovenia even as it pursues plans to shift lower-value manufacturing to low-cost locations such as Serbia.

If production is relocated, the company will secure new product lines in order to preserve jobs in Slovenia, according to the agreement which was confirmed by Gorenje's supervisory board on Thursday.

In exchange, the two representative unions in the company will cooperate with the management in any relocation decisions and "refrain from any action or decisions running contrary to the agreement."

The commitments will apply under the condition that the business conditions do not deteriorate substantially, the company said in a statement.

Gorenje has been carrying out an "optimisation of production locations" in a bid to cut costs. It has significantly expanded its facilities in Serbia and in the Czech Republic.

In early March it announced it was closing a stovetop plant in Finland, which it obtained as part of its acquisition of Sweden's Asko in 2010, and moving production to its Czech plant Mora Moravia.

In Serbia it has rapidly expanding production locations in Valjevo, Zaječar and Stara Pazova.

The signing of the agreement with the unions comes after media reports suggested growing unease among workers in its base in Velenje, who were said to be afraid of their jobs due to relocation plans.

The supervisory board also confirmed today the arrival of Peter Groznik as new chief financial officer.

Groznik, a lecturer at the Ljubljana Faculty of Economics, has been doing financial consultancy for Gorenje since late 2010.

He succeeds Marko Mrzel, who will take responsibility for the same of small and big household appliances.