Wednesday, May 28, 2008

A Romanian Boom Town Grapples With Growth

Germans were outraged when the Finnish mobile phone company Nokia decided to relocate a profitable factory to Romania. Nokia and other companies have proved a boon to Romania's Cluj region. Nokia sees its future in the Rumanian village of Jucu in the booming Cluj region where it is currently building a complex on 90 hectares. And Nokia is the only western European company looking eastward to Cluj. Since 2005, more than 40 companies have relocated here, among them mobile phone companies such as Vodafone and Orange as well as Romanian software developers.

The factory is scheduled to open in 2008 While Cluj is booming, Nokia plans to close its production factory in the German industrial city of Bochum. Nokia announced the decision at the beginning of the year, facing protests that lasted for weeks in which activists and politicians turned in their Nokia phones. Viorel Gavrea got caught up in the commotion although his office is a world away in Cluj. Gavrea is the manager of the city's industrial parks Tetarom 1, 2 and 3. Last November, Nokia called him and offered to bring 3,500 jobs to his city. Nokia chose Tetarom 3 as its build site, leaving a little extra space for a potential neighbor.

"It's interesting right now what is happening," Gavrea said. Three large companies are interested in moving to be near Nokia. From his window, Gavrea, a dark-haired man in a refined suit, watches the project take shape. He enjoys working near the building site, where cranes hoist large parts of the factory into place. With growth come problems Everyone in Cluj knows Gavrea and the three Tetarom industrial parks and most are happy about the changes. "When you compare the current situation with that of a few years ago, it is very good," said Gavrea. "We have streets and it is clean. We have waited a long time for this."

There are officially 300,000 people in the Cluj area, but in recent years the number has grown to half a million making the town almost as big as Dusseldorf. The newcomers have shown up because of the job opportunities. And they've all brought their cars with them. Cluj's small inner city is barely able to handle the traffic. Each day Gavrea braves the crush and drives 10 kilometers to the city center for lunch. Ovidiu Pecican stands out for being one of the city's few pedestrians. With his beard and round belly, in Germany he'd be thought of as an old school hippie.

The university professor and writer has become a vocal critic of the changes his city is undergoing. He believes the cars are a problem in that they block everything, including the sidewalks. "Another problem is that the historical old city is being built up and the green spaces are disappearing. And that is very bad," Pecican said. Streets are jammed The city has grasped the seriousness of the traffic problem and plans to build new streets leading out from the center. A large highway is also planned between Cluj and Bucharest to make it easier for investors to get to the city. A big part of the city's attractiveness comes from it having inexpensive labor. An average salary is 200 euros per month.

The main question potential investors have when they take tours of the industrial park is whether they can find enough workers to open shop in Cluj. Gavrea assures them that the industrial parks draw people from a 60 kilometer radius. "The unemployment figures here are high. I asked Nokia and Emerson and they said they had no problem finding workers," Gavrea said.

More roads are planned to handle the new traffic In the future it shouldn't be a problem to find qualified workers since the city has nine universities with around 100,000 students. Professor Pecican agrees that there is a big enough workforce, but someone "with two university degrees will naturally not be interested in digging holes." It remains relatively easy for most Romanians to find work, whether they are overqualified for the job or not. Gavreas' industrial park continues to grow. Tetarom 3 looks like it will be three times larger than originally planned – more than 300 hectares. And Tetarom is planning a fourth park as well. This is the game of globalization. At the moment, Cluj is playing and winning. But in 10 years it will likely be completely different and Viorel has no illusions that in the future jobs might continue heading even further East.

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