Major unemployment threat looming over Hanko as imports of cars grind to a halt

On Monday 139 transporter trucks left the port; the daily figure last year reached as high as 300 trucks

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Car importers at the Port of Hanko are preparing for co-determination negotiations and dismissals as a consequence of the drying up of the Russia-bound transit traffic of cars.
      The fears are that the current financial crisis and the disturbance of the Russian economy will affect the Hanko employees first, with the number of potential dismissals running into the hundreds. In fact, several employees were dismissed already on Wednesday.
     
As a result of the slowdown at the Port of Hanko, the city could lose tax revenue and harbour charges worth up to a million euros. Those who are allowed to keep their jobs would also be suffering from the crisis, if the city is forced to raise the municipal tax rate.
      The overall prospects are unclear and people are nervously expectant. The car importers are making an effort to minimise the number of dismissals in order to avoid hampering the potential fast relaunch of car imports. Typically, the first to go are temporary workers.
     
Hanko has ended up having to put off its budgeting plans until December.
      Mayor Tom Axeberg believes that the transit traffic of cars will not halt entirely, but even the halving of volume will make a huge gap in the city’s finances.
      Further distress will be caused by the fact that because of the financial crisis, the plans for a new spa hotel with residences and time-share apartments available on a weekly basis have been frozen.
      Paavo O. Lyytikäinen, the Managing Director of the Port of Hanko, calculates that the Russia-bound transit traffic of cars has dropped by almost 30 % over the period from September to October.
      Some 70 to 80 % of the imported new cars arriving at the Port of Hanko have been transported to Russia each year for the past several years.
      A total of 139 truckloads of cars left the port for Russia on Monday of this week. In comparison, in 2007 the average number of cars shipped eastwards through Finland in transit traffic was up to more than 300 truckloads a day.
      Jaana Pulkkinen, who drives cars from the harbour to the parking lot to await onward shipment to Russia, feels anxiety about her family’s and the city’s probability of getting into financial distress.
      Her husband also works as a driver for a car importer, and the family has a 6-year-old daughter and a recently bought house.
     
As a newly elected town councillor, Pulkkinen (SDP) is concerned about the future of the city of Hanko.
      ”The end of the car transit traffic would lead the economy of the City of Hanko to the brink of catastrophe. Moreover, a good employment rate is beneficial to the national economy as well, in other words the decline will not be Hanko’s concern alone”, Pulkkinen contemplates.
      In August, the government announced that it intends to restrict truck traffic on southeastern roads. They also plan to impose road use fees for Russian trucks.
     
Axeberg in the city hall and Pulkkinen at the harbour speak with one voice: both are dissatisfied with the measures taken by the government.
      Two years ago the city was asked to do its utmost to keep the transit traffic of cars in Finland. In fact, the city is currently implementing a EUR 6 million quay construction project at the harbour.
     
The City of Hanko has 9,700 residents. The Port of Hanko employs a total of around 1,000 people, half of whom are Hanko residents, while the other 500 come from neighbouring municipalities.
      The imports of cars as well as the related handling and exports employ half of the port’s workers.
     
A total of 465,000 cars were transported through the Port of Hanko in 2007, some 100,000 of which remained in Finland, while most vehicles were shipped onward to Russia by truck.
      Plans have also been made to move a considerable part of the eastbound transit transport of cars from road to rail, but the construction of terminals in Russia has yet to get under way.
     
The imports of cars are shared by the cities of Hanko and Kotka approximatelyon a fifty-fifty basis.
      At the Port of Hanko, imports and exports have been more or less in balance. The port exports paper and newsprint, for example.
      The local municipal tax rate for Hanko is 18.75%, and a decision on a new rate will be made no sooner than just before Christmas.
      The Port of Hanko has paid approximately EUR 5 to 6 million into the city's coffers every year. The grand total of this year’s budget for Hanko is EUR 72 million.


Previously in HS International Edition:
  Brakes come on for transit traffic of cars through Finland to Russia (23.10.2008)
  Finland considers limiting number of border-crossing permits for Russian trucks in attempt to solve congestion problems (16.10.2008)
  Transport Ministry to examine road use fees for lorries on route to Russian border (7.8.2007)

Links:
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