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. Last Updated: 07/27/2016

Stalintown Hopes for Socialist Help

DUNAUJVAROS, Hungary -- Once the pride of communist Hungary's heavy industry, the city of Dunaujvaros needs all the help its Socialist mayor can get to keep its vast steelworks alive and save thousands of unnecessary jobs.

Andras Kalman, 53, portly and graying, has spent most of his life in what was formerly known as Stalintown, whose antiquated steel plant once employed 12,500 workers and fed most of Hungary's industry -- from bus making to home appliances.

"Our generation saw this town grow from the ground," he said in an interview. "To like or dislike Stalintown may depend on your politics, but those who grew up here truly love the place."

In a 1950s edict, Moscow designated Hungary as the Eastern bloc's "country of coal and steel" and poured the better part of a decade's gross domestic product into building Sztalinvaros, or Stalintown.

Some 60 kilometers south of Budapest, on a hill near the Danube, the Dunaferr steelworks provides every second job in the county and drains state coffers in the process.

"Around 1994, it became obvious the level of employment at Dunaferr could not be sustained," Kalman said. "It was then that the first restructuring plans were devised, but the company was still making money until the 2001 [steel] crisis."

Last year, Dunaferr posted an 8.6 billion forint ($34.65 million) loss, and this year could be worse, with an expected loss of 14.2 billion forints.

The steel mill, owned by state privatization agency APV, is Hungary's second-biggest power consumer.

But cutting the obsolete mill back to size, ready to face the competitive pressures of life in the European Union, is deeply sensitive for the region of 130,000 inhabitants, Kalman said.

"The region has an employed workforce of around 16,000, and Dunaferr alone provides 8,500 jobs," he said.

Last week, Socialist Prime Minister Peter Medgyessy visited Dunaujvaros ahead of Sunday's local elections. He promised not to let the town down. He declined to say how many jobs could be lost at the Dunaferr steelworks, but Kalman reckoned up to 3,000 could go.

"Some 1,000 jobs will be axed, according to our optimistic scenario, and over 3,000 in the pessimistic one," he said, adding that Dunaferr's survival meant more than the livelihood of half the region's inhabitants.

The city is now looking at developments beyond keeping Dunaferr alive.

Near the former steel fortress, with its grand pillars and ornate worker-meets-peasant mosaics, is an industrial park that houses a small plant for British ladies' underwear maker Triumph, employing 300, and another for Japanese car parts maker Aikawa, with 800 staff.

Kalman, whose teacher parents were ordered to Stalintown with their 2-year-old son, believes he can win the fight to revive the town, which grew from a workers' barracks into a bustling regional center in its own right.

"Ever since the 1960s, when this was just a small village, people stuck together through thick and thin," Kalman said.

"The industrial culture, location and people's eagerness to do something for their town carries the potential not only of survival, but also of progress."