LVIV, Ukraine — War, economic turbulence and a dwindling labor force has scared off many new investors in Ukraine in recent years, but not Fujikura, a Tokyo-based electrical equipment manufacturing company.
The car parts manufacturer has opened two factories in western Ukraine, right beside Lviv’s ring road. One started operating in April 2016, and the other in October, almost two years after Russia launched its war against Ukraine in the Donbas, on the other side of the country.
“Such enterprises are opening in Ukraine because they count on there being cheap labor, and they benefit from it,” said Andrii Orikhovskyi, a training and development specialist at Fujikura Automotive Ukraine.
The plant is surrounded by forest, and the closest building to the plant is a petrol station. Nevertheless, it is conveniently close to Lviv: it is only 14 kilometers from the city’s downtown. To the west, Ukraine’s border with Poland is only 60 kilometers away.
Orikhovskyi explains why the company chose this location.
“The logistics mean it has to be close to the border, as the company transports its goods abroad,” Orikhovskyi said. “Also, research showed that there was a lot of unemployment in Lviv at that time. Plus, Lviv’s Mayor (Andriy Sadoviy) showed his support for new investments.”
Fujikura is now about to open another factory in Nemyriv, in Vinnytsia Oblast. However, the company has refused to comment on it until its launch.
Fujikura produces various cables for German car manufacturers such as Volkswagen, Porsche, Audi, and the Czech Republic’s Skoda. All of the managers of the Ukrainian division are Ukrainians, or Spanish citizens, apart from the Japanese General Director Hiroya Onishi.
But Fujikura is not the first company in western Ukraine that is producing cables for vehicles. Sumitomo Electric Bordnetze has a similar factory, launched in 2006 in the neighboring city of Ternopil, which is backed by German and Japanese investors. Germany’s Leoni, one of Fujikura’s competitors, also has a factory in the region.
These companies formed a wave of new investment in western Ukraine that mainly involved business producing automotive parts.
Daniel Bilak, director of the Ukraine Investment Promotion Office, told the Financial Times in September that the region has attracted more than $600 million of investment from 20 companies from western Europe, the United States and Japan. The companies employ 40,000 people, Bilak said.
Manufacturing
Today Fujikura employs nearly 3,000 workers, mostly from Lviv Oblast. Fujikura provides transportation for those of its employees who live within 50 kilometers. Most workers are on 8-hour shifts: some start as early as 6 a. m., while others end work at 6 a.m.
The workers perform a wide range of tasks, such as creating cable bundles for car stereo systems or windshield wiper connectors. The bundles have to be put together manually, in a careful, step-by-step process. For some types of car, Fujikura produces entire wire harnesses instead of just individual cables.
The employees in each factory work in an open 3,000-square-meter space. They first cut the wires, attach some together, add clamps and then run tests. They then assemble more wires and roll up the ends with electrical tape. The last step is to test the whole bundle before it is sent for packaging.
“The workers perform a function that machines cannot do,” said Process Engineer Yaroslav Synyshyn, who plans out the cable assembly and oversees the process. He adds that often the process has to be adapted in the middle of production, as customers sometimes change their demands mid-order.
And as in every manufacturing company, employees make mistakes. If there is a product defect, the cable goes to a separate area where it is tested and fixed.
Fujikura keeps a record of who made each mistake.
“Every mistake has a name and last name,” Synyshyn said.
Daily goals
To make sure defects are kept to a minimum, employees must pass various tests before they are hired. The company also has a week-long training course followed by a month trial period. Employees are not required to have a higher education.
The work is straightforward but requires a lot of attention, as it is monotonous and labor-intensive. Each operator is required to meet a daily quota for their specific task. Thirty-four-year-old Mariya Domanska, for instance, has to solder 1,600 wires during her eight-hour shift. Sometimes she meets her quota, but if the wiring is a complex job she may not, she says.
Domanska said the work was hard at the beginning, but she got used to it. The best aspect of her job is that the factory is just a 5-minute drive from her home. The average salary for a position similar to Domanska’s is Hr 6,000 ($280) a month, according to Head of Recruiting Viktoriya Kit.
For Domanska, it’s her first job, apart from helping her parents to manage a store and take care of her two kids.
“Everyone is surprised that I’m working here, but I need work experience,” she said, adding that she has a hairdressing qualification.
Workforce shortage
It’s one thing to hire people, but quite another challenge to get them to stay, Orikhovskyi said. Workers have the option of finding work in neighboring Poland, where according to Eurostat the minimum wage is $580 — which is at least four times higher than in Ukraine.
And with the introduction of Ukraine’s visa-free regime with the European Union back in June 2017, the number of work permits issued to Ukrainians in Poland has increased, according to Kyiv-based think tank Cedos.
Kit said that the company finds new workers via local advertising.
Employment benefits include affordable lunch prices, city tours, and visits to nearby castles or farms.
Special unit
Fujikura also employs those with disabilities. It has a separate section for 33 deaf-mute operators. Fujikura’s sign language interpreter Liliya Kostyshyn helps the employees to communicate with the rest of the team.
She stands in the middle of the operating line, claps her hands and shows signs that attract visual attention.
The team has been working here since August. While most have enjoyed the working conditions, some have already gone abroad in search of another job.
“They like it because it is clean and light in here,” Kostyshyn said.
The workers with disabilities are expected to meet their daily quotas just like any other worker.
One of the workers with disabilities, Andriy Lazorchyn, has to band together 230 wiring bundles on a constantly moving production line.
“It’s difficult here, as you have to stick to the plan,” Lazorchyn says in sign language. But he has a big smile on his face as he signs.
