Labor reform strikes in Finland: Companies grapple with impact

 

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Finland is preparing for major disruptions to its trade as labor unions begin a two-week strike on March 11th. This strike follows other job actions since October in response to government proposals to reform the labor market and reduce social benefits. The strike, involving ports and rail, is expected to widely impact imports and exports, worrying stakeholders in Finland’s economy.

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Anticipated Challenges for Businesses

As the strike progresses, Finnish companies are working to navigate anticipated difficulties and financial setbacks. SSAB, a major Swedish metals manufacturer, forecasts a notable hit to first-quarter profits due to work stoppages. Similarly, the national carrier is readying for refueling disruptions, requiring steps to mitigate customer impacts. In response, Metsa Board, a leading paperboard producer, will temporarily close its Joutseno mill while focusing on maintenance. Meanwhile, the oil and biofuels group is on high alert in case the strike disrupts raw material transportation and storage at its Porvoo refinery.

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Cross-Industry Ramifications

The strike is reverberating across Finnish economy sectors, challenging businesses there. Specifically, the Finnish steelmaker lowered first-quarter guidance due to anticipated work stoppages. SSAB Europe, SSAB’s subsidiary, sees major adverse effects on first-quarter operations, signaling coming financial turbulence. In forestry, companies worry about potential delivery delays and production issues, translating to added costs. The Varkaus packaging board mill plans a temporary shutdown and suspends employee wages directly impacted. Additionally, UPM, a major forestry player, may close its Kymi paper mill in Kouvola as disruptions increase.

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Impacts on Rail Services

The strike will disrupt rail across Finland, mainly 250 freight trains daily. The state-owned railway confirmed freight traffic will halt through March 24th. However, passenger transport is expected to continue, providing some relief amid ongoing labor unrest.

The union strike is poised to significantly impact Finland across manufacturing, transportation, and logistics. As businesses prepare for disruptions and losses, the government faces pressure to address union grievances while maintaining economic stability.