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The economy in Eastern Ukraine, which relies on steel, looks bleak in the global downturn.
MAKEEVKA, Ukraine — The Kirov Metallurgical Works looms over Makeevka like a great, dark castle. Stretching for kilometers, its dirty smokestacks and smelting furnaces form a gritty silhouette that can be seen even from the town’s central market. The sight is a stark reminder of the factory’s singular economic importance in this hard-edged city of about 400,000 in Ukraine’s industrial east.
Today the smokestacks are dormant and the furnaces for the most part cold. Last December and January, factory officials laid off thousands of workers. Figures vary, but according to one local union leader, some 6,000 out of a total workforce of 7,500 were asked to accept the company’s buyout. Makeevka, where seemingly every family includes someone connected to the mill, is reeling.
Sergei Mironov was one of those to lose his job. A stocky 33-year-old with watery blue eyes and a buzz cut, he had worked in the factory’s rail yards since 2000. On Jan. 20 he accepted the steel mill’s offer of 12,000 hrvynias compensation (about $1,500) and joined the ranks of the unemployed. Thanks to other layoffs, their numbers have exploded in the last three months.
“The situation is just awful,” he said, chain-smoking outside Makeevka’s unemployment offices and job placement center. “It’s simply impossible to find work right now. You do a little here and a little there.”
Mironov lives on the town’s outskirts with his wife and mother in a cluttered three-room apartment. So far he has not received any unemployment payment. His wife, Lena, is semi-incapacitated and receives a monthly stipend of 544 hryvnias. “New Year's was the last time we bought meat,” he said.
His story is just one of tens of thousands, however, in eastern Ukraine, the country’s industrial heartland. The global economic downturn translated into contractions for industry throughout the world, but steel — the stuff of skyscrapers and automobiles, heavy machines and ships — has been hardest hit. Demand has been halved, while prices plunged from highs of more than $1,000 per ton a year ago to just over $300 today.