At Furnes Jernstøperi in Stange, sparks fly when scrap metal is melted and turned into brand new manhole covers.
The traditional industrial company delivers to a large market at home and abroad, but now times are tighter:
A third of the workforce has already been made redundant. And now the question is how much is left for wage growth when the electricity bill is paid.
Glenn Furulund, who is the union’s representative at the foundry, acknowledges that there are dark clouds hanging over the settlement.
With the costs the company currently has for electricity, the workers can only dream of a wage settlement at a level that gives increased purchasing power, he fears.
– We have to demand our salary, anyway. But the total will mean that there will be less where we get wages from, says Furulund.
– What do you fear will happen to wage growth if there are no better support schemes for electricity?
– Then I think we will have hell in the salary settlement. Because I will have my money and my salary, he says.
Forecasts from DNB Markets and Nordea point to wage growth this year of 4.8-5 per cent.
– Must listen
NRK was invited along when Fellesforbundet’s leader Jørn Eggum and Norsk Industri’s leader Stein Lier-Hansen met the management and shop stewards at the iron foundry for a kind of crisis meeting this week.
The LO leader Eggum used the opportunity to ask the government to strengthen electricity support for households, in order to make the job of the parties in the wage settlement easier.
And Frp leader Sylvi Listhaug is very happy about the demand from Eggum.
– When the government’s own party colleagues in LO are out and demanding this, I will challenge the government: Listen to Jørn Eggum in Fellesforbundet and Frp. Then we will have a good starting point when the salary negotiations start, says the Frp leader to NRK.
Jørn Eggum is a leader in LO’s largest union in the private sector, Fellesforbundet, and sits on the Labor Party’s central board.
Listhaug has himself visited the Furnes Iron Foundry. She believes the state must contribute to the wage settlement by reducing taxes and repaying more of the electricity income.
– Many companies are struggling, both with electricity expenses and other expenses that have risen sharply. On top of this, many companies are affected by increased taxes and increased employer’s contribution, she says.
– If the wage increase is 5 per cent, as some are predicting, it will be very difficult for many companies. The state, on the other hand, earns more money than ever and can contribute.
The FRP has three concrete proposals to help people with their bills: Food VAT halved for the whole of 2023, fuel taxes halved for half the year and thus a maximum price of 50 øre per kilowatt hour for electricity and 100 per cent repayment of this, both for households, cottage owners and businesses.
– Will always spend more money
The price tag for the Frp’s proposal is a total of NOK 30 billion. 22 of the billion is spent on increased electricity support in the first half of the year.
– Won’t the increased spending lead to increased price growth and increased interest rates?
– More and more economists now support this – that it is entirely possible to spend more money, and that it will not have any particular effect on inflation, says Listhaug.
But Center Party’s Geir Pollestad points out that “keeping price growth and interest rates as low as possible is the most important thing we can do for both people and businesses”.
– The FRP’s solution is always, when they do not have power, to spend more money. It helps little if some economists agree with the FRP. We have to deal with Norges Bank, which determines the interest rate, says SP’s finance minister at the Storting to NRK.
Pollestad also says the FRP must understand that we are in a situation we cannot pay our way out of.
– I also doubt whether the cost of electricity support has been calculated correctly. When the FRP has to give a fixed price for electricity to everything from data centers and crypto mining to oil companies, the bill will quickly become large.
But without more help from the state, Furnes boss Oddbjørn Maurdalen fears that he will have to lay off even more of his nearly 150 employees.
And the high electricity prices are emerging as a problem in the salary settlement.
- Eggum in Fellesforbundet wants one better electricity subsidy scheme for households to relieve the pressure.
- Lier-Hansen in Norsk Industri is asking for one electricity support for business according to the German modelwhere the state covers, for example, 70 percent of electricity costs above a certain level. He himself has given a cost estimate of NOK 30–40 billion.
The government has long considered changes to household support, but should not have any plans to change the scheme now.
– We are not making any changes to the support scheme now. But we are trying to make it more relevant, says Oil and Energy Minister Terje Lien Aasland (Ap). Free Trade Union Movement.
Will have increased purchasing power
At the same time, the government has insisted that fixed-price contracts are the way to go for business.
– The government’s plans 1, 2 and 3 are the fixed price agreements. Then we will not do anything that can contribute to putting our feet under the market which is now in the process of establishing itself, said Industry Minister Jan Christian Vestre (Ap) recently to NRK.
For Furnes CEO Oddbjørn Maurdalen, the government’s fixed price system has not yet yielded good enough deals:
He has been offered a fixed price of 98 øre per kilowatt hour over three years, but says the real cost will be up to NOK 1.60 in a three-year agreement. The reason is that those agreements involve the purchase of electricity also at business times does not need the power – which must therefore be sold on.
But both Fellesforbundet’s Jørn Eggum and Norsk Industri’s leader Stein Lier-Hansen believe that the parties in the wage settlement are completely dependent on help from the government in order to get to port.
Eggum says it is out of the question to accept a drop in real wages – i.e. lost purchasing power – for the second year in a row.
– It is extremely important that we do not have our purchasing power reduced, he says to NRK.
– There are many ways to achieve that. We also use the state. The authorities can contribute by strengthening the electricity subsidy scheme for households, explains Eggum.
Last year, the electricity subsidy ensured that a bad salary settlement became a little less bad. Then the so-called front subject ended at 3.7 per cent. With a price increase of 5.9 per cent, purchasing power was lost for the employees – by a good margin. Without the electricity subsidy, the price increase would have been 7.1 per cent.
Lier-Hansen is tentative in his comments about the salary settlement. But he acknowledges that the demand for real wage growth this year may be difficult to meet.
Because again this year, expensive electricity will make it difficult for companies to come up with good offers, he warns.
– What is important to us is that we find a solution that means that the employees have enough in salary that they feel they have been treated fairly. The able to be possible, if we have good competitiveness, he says.
– But if competitiveness is weakened, it will be difficult for us to meet such a demand, says Stein Lier-Hansen.