Situated amid the luxuriant woods on the outskirt of Krasnik, a small town in southeast Poland, the Fabryka Lozysk Tocznych-Krasnik S.A., an 80-year-old factory, produces about 1,500 types of bearings — some of which can be found on products of world-class prominent names such as Mercedes, Maserati and Renault.
With vibrant business and good sales record each year, it is hard to tell that FLT-KRASNIK was once hit by a severe crisis just a couple of years ago. And it is thanks to the investment by Chinese company Tri-Ring Group that helps the Polish factory survive the crisis and revive.
Established in 1938, the Poland’s largest bearing producer had been developing for decades, although with ups and downs, until the financial crisis came in 2008.
“When the crisis started in 2008, the factory had a very precarious situation. We lost a lot of money on currency exchange, and most of our customers reduced their orders by even more than 40 percent, that’s why in 2009 we were very close to bankruptcy,” said FLT-KRASNIK president Grzegorz Jasinski.
The factory struggled for survival through its most difficult times in the next few years, as restructure rolled out by its management and other endeavour taken by the Polish government brought little effect.
“During that period of time, we worked only four days per week and our income dwindled drastically; however, most importantly, we didn’t know what would happen the next day. Will the working hours be shortened further? Will there be a massive layoff?” recalled Darek Szynkowski, a veteran who has been working for 25 years in FLT-KRASNIK.
“It was really tough then, because I was the only one who worked at the time; my wife stayed at home taking care of our kids, one ten-year-old, one infant,” he added. “We worried about our bills, our household budget, even if we could make ends meet.”
Not only Szynkowski, Krasnik also couldn’t stand the consequences stemming from the winding down of the factory, which is the largest employer in the town.
“There is practically no family (in Krasnik) which doesn’t have a member who is working or worked there. We say in Polish that this factory is the breadwinner of Krasnik,” Wojciech Wilk, Mayor of Krasnik said. “There are more than 2,000 people employed and the condition of the factory affects the entire town.”
With no other option, the Polish government opted to privatize the factory in 2012. As a key decision maker for FLT-KRASNIK, Jasinski was under tremendous pressure when over 2,000 employee’s lives as well as their families’ — even the economic outlook of Krasnik were at stake.
Offers from around the world flocked to the table, however, no one then understood why Jasinski was so obsessed with the specific one made by Chinese bearing manufacturing giant Tri-Ring Group.
“We evaluated all the offers very carefully, compared each of them with others, until I visited Tri-Ring, listened to their visions and commitments, saw their modern plants and capabilities with my own eyes that I realized that this is the investor we need,” Jasinski said.
However, the unions and some employees had disparate opinion. “They were afraid, had no confidence in Tri-Ring, and it is understandable, especially when other competitors spread rumors that the Chinese investor would repack the production somewhere in China, the workers would lose their jobs, and so forth,” Jasinski explained.
Prudently, the management of FLT-KRASNIK and the Polish government jointly took decision, which was proven to be a right one not long after, when most advanced machines flowed in and a R&D department was built up, and orders started to increase significantly.
The Chinese investor lived up to their commitments, and the only thing the employees had to worry about was if they were able to work extra hours, because of the unprecedented huge amount of orders, of course, with overtime remuneration.
“After the acquisition, we have increased salaries for four times for all of our employees, meanwhile no massive layoffs,” Jasinski said. “Now, people understand why I was so enthusiastic about Tri-Ring back then.”
“Last year we made a record in terms of total sales,” Jasinski said, proud of the move he advocated.
Local government also gives credit to the takeover. “It can be evaluated as positive: the company kept its profile — producing bearings. We got new sales outlets; we keep employment levels, which is very important for all the town,” Wilk said.
“It is very important to have this kind of competitive workplaces so that young people stay in our town, and it is also important for us to get access to new technologies — because we know that Tri-Ring Group has equipped the factory with new technologies,” the mayor added.
Step by step, Tri-Ring revitalized FLT-KRASNIK by constantly injecting capital and technologies into its Polish subsidiary. A reciprocal exchange mechanism for engineers from China and Poland to meet up and learn from each others’ experiences was also established.
“I visited Tri-Ring on the exchange program in 2016. I was impressed by what I saw there, and came back with new experiences and ideas, which are very useful for our work,” Szynkowski expressed his satisfaction as a senior technician.
Walking in the hall full of new machines, he said: “I think we made a good choice then and we’re pretty satisfied with how the factory’s doing right now.”
“I really don’t know what would have happened to us if we didn’t choose China,” he added.