Another day, another round of horrid news for the Hungarian labor market. Yesterday’s big bad story was the bankruptcy of German model train builder Märklin, which was taken over in 2006 by private equity players Kingsbridge Capital and Goldman Sachs, and which currently employs upwards of 600 in Hungary.
The firm said it wants to use the bankruptcy process to restructure rather than liquidate, and the bankruptcy administrator said he “hoped” the firm’s Hungarian employees would be spared. But the company has already shown a willingness to move away from high-cost manufacturing areas – it closed a plant in Eastern Germany in 2007 – and it’s easy to see how moving the Hungarian operation to an even lower-cost spot might be high on the list of restructuring “to-dos.” In other words, the train may have already left the station.
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