Zone Silesia

An in-depth report on the Katowice Special Economic Zone

Map of the special economic zone

You see here the Opel factory in Gliwice. Navigate through the map to see the 250 companies of the SEZ.

The Zone in numbers

The Katowice Special Economic Zone started from 800ha of former agricultural, industrial and wasteland areas in Silesia. As part of the broader revitalisation agenda for the region formerly burdened with heavy industry, it was supposed to bring modern companies, innovation and employment opportunities.

The Zone now comprises over 2000ha of industrial space, i.e. roughly 13% of the total area of economic zones in Poland, offering 50 000 jobs, mostly in automotive industry. Over three quarters of jobs in SEZ are newly created ones, the remainder classified as sustained positions. In 2012 there were 227 active licences for operating in the zone, as compared to only 49 at the turn of the millennium.

Companies in the zone invest substantially more per employee than the average company outside, making over twice as much investment per employee in 2012. This testifies to the role of SEZ as a catalyst for investment.

While the zone is a substantial contributor to employment and investment in the area, substantial tax allowances were established for the SEZ entrants in Poland. Over the period 1996–2012, tax exemptions summed to a figure in excess of PLN 10 billion. Assuming that Katowice’s Special Economic Zone is roughly 20% of Polish economic zones in terms of size, a back-of the-envelope calculation suggests PLN 2 billion over the 16 years, or PLN 130 million per annum, offered in the form of public support to companies involved. The PLN 20 billion worth of investment brought to the Special Economic zone seems a good rationale for such sizable public outlay. However, whether this investment would not have happened had it not been for the economic zone, remains elusive.

The profiles of 5 investors in the KSSE

642,000,000 zł
This is the amount needed to build 64 km of highways.
Eaton Automotive Systems (USA) arrived in the KSSE in 2006
Automotive parts, Jastrzębsko-Żorska
505,000,000 zł
This is the amount needed to build 50 km of highways.
Kirchhoff (Germany) arrived in the KSSE in 2006
Automotive, Gliwicka
289,000,000 zł
This is the cost of building 1,500 apartments in Katowice.
Mapei (Italy) arrived in the KSSE in 2003
Construction materials, Gliwicka
156,000,000 zł
About 1 free Starbucks Americano for each female adult in Poland.
Mokate (Poland) arrived in the KSSE in 2002
Food, Jastrzębsko-Żorska
150,000,000 zł
That is the price of 340 tons of Arabica coffee.
Instanta (Poland) arrived in the KSSE in 2000
Food, Jastrzębsko-Żorska
Motown. Will automotive companies move further east overnight?

The automotive industry emerged in Silesia in the second half of the C20th in Bielsko-Biala and Tychy. With Edward Gierek’s rise to power in the 1970s came particularly good times for automotive production. As a result of political decisions made by this Sosnowiec-born 1st Secretary of the Communist Party’s Central Committee the Bielsko-Biała plant started producing the indigenous Syrena model, while Tychy benefited from the Fiat 126 manufacturing license purchased in Italy. The hardships of the political transformation of the 90s forced major changes in the automotive sector, including opening to private investors, modernisation of production technology, increasing labour productivity, and the search for alternative markets and new car models.

New companies with foreign capital were set up in Silesia, led by market-savvy Fiat as the most important investor. A little later, it was joined by General Motors, the makers of the popular Opel cars. Soon these two giants in the global automotive market were to become leaders in terms of investment not only in the Katowice zone, but throughout the country. Employment in the automotive industry grew steadily in the 2000s, reaching almost half the current employment figure in Silesia’s mining industry. Thus, a third of the motor vehicle production jobs in the country were created in the region.

The role of the automotive sector is evidenced by the fact that almost every week KSSE-based companies make the headlines almost weekly. And it is no coincidence the zone’s most prominent occupants represent the automotive sector, holding a 62 percent share of the total amount invested in the KSEZ so far. Despite the global crisis, which has discouraged Europeans from buying cars, the biggest investment in recent years were made by automotive companies – both car manufacturers, as well as suppliers of car components and specialist services associated with motor vehicle manufacture.

The activity of the KSEZ based companies has had a large impact on the economy of the region. In addition to the invested capital, new jobs and cooperation with other companies (such as steel and light metals producers as well as electrical and electronic component manufacturers ), the zone is conducive to unlocking the industrial potential of the region. However, the dominance of the automotive sector in the KSEZ also has its downsides. The industry is particularly vulnerable to trends in the global economy, as evidenced by the recent economic crisis, which adversely affected the KSEZ’s performance (although it should be noted that other Polish zones suffered more than the KSEZ). Due to the tax incentives offered to companies operating in the zones, the investments often depend on political decisions at the highest levels of government, as the case was in 2011, when the manufacture of the Fiat Panda was moved to Italy, despite the fact that – as stated by the head of the company, Sergio Marchionne – it made no sense economically.

One may also wonder to what extent companies from the automotive sector focus on innovation that could contribute to the competitiveness of Poland’s economy. Despite the investment in new technologies, KSEZ companies play sub-contracting roles for foreign manufacturers. While steps are being taken to modernise the sector through the creation of clusters and technology parks (e.g. the Automotive Silesia cluster within the KSEZ), it is too early to assess the results of these initiatives.

Given the dependence of the KSEZ from one sector, rising labour costs in Poland, economic uncertainty and political turmoil around the automotive industry, it is likely that in the future, foreign investors will find a more attractive offer elsewhere in the world and move production to countries that will attract them with more favourable tax incentives.

The SEZ blues

In order to understand the plight of employees at the lowest level of the Katowice Special Economic Zone, we need to briefly leave the world of hard data and move towards human emotions instead. When reading hundreds of reviews, posted by mostly anonymous workers on, an employee review site set up to exchange information on working conditions in several thousands of smaller and larger companies operating in Poland, and checking media reports on workers' protests, we see a much different picture of the KSEZ than the one painted in investors’ promotional material or coming from those lobbying for further development of the area.

Stay away from the factory. I spent three months working twelve hours a day and did not get overtime. Practically working for free.
There are no unions. The work is hard and monotonous. You work 8 hours to unworkable productivity standards. We’re mistreated, e.g. there’s a constant threat of layoffs, we work 8 hours with just one 15 minute break. The atmosphere is awful, and overtime is paid once per quarter. In a nutshell – a modern-day labour camp.
The pay and the way they treat you is more akin to slavery. Fortunately, I managed to get out of there, but I would like to warn all against this labour camp.
Want to know the real labour camps? Feel free to visit the Gliwice SEZ, you will find at least a couple there. And it’s the Polish managers teaching foreign investors how to treat people like cattle!
These places are modern day slave farms. Junk work contracts, minimum wage, 3-shift rotas with no shift premiums. Slave labour, no less.
I worked with some Italians at the KSEZ. 3 shifts, no premiums, Mickey Mouse contracts at 1200 zlotys per month. A tin hut with heating turned off, fingers numb from the cold, trying to put together some complex components, and an Italian guy shouting out the few words he knew in Polish: “Faster, faster, or get out”.

Among the thousands of online comments on companies operating in the KSSE, terms such as “labour camp,” “slavery,” and “exploitation,” reverberate throughout the site. Other commonly voiced complaints about the harsh realities of employment at the KSSE: low wages, workers' rights violations, corporate lobbying allegations, unworkable production plans to avoid paying overtime, as well as numerous reports of “junk contracts,” with social benefits or chances for long-term employment. This gloomy picture of the KSSE, seen through the eyes of ordinary employees, is consistent with the opinions found in numerous independent reports concerning labour relations prevailing in economic zones worldwide. The workers’ situation seems no different at the Lower Silesian SEZ, as reported by Małgorzata Maciejewska of the Feminist Think Tank in her "Tired body and invaluable products: Working conditions of women in the special economic zone of the electronics industry" (PDF). The following is the author’s account of her two-month employment in one of the zone’s companies:

“Factories in zone act as mobile machines of modern capitalism, using temporary forms of employment and exploiting the legal and social opportunities created by the state and the specifics of the region (lack of sustainable livelihood, of which the people were deprived by the liquidation of the old industry). The life of workers is 'drained' by monotonous, low-paid and unhealthy work, exhausting commutes and lack of stable employment. (...) It seems fair to say that these heavy and monotonous jobs that pay peanuts, are also potentially hazardous to life. The companies will not admit to the consequences related to working in the factory. To make matters worse, the health risks often don’t appear until years later, which makes the physical toll of working in factories significantly less visible. High technology carries a high cost: the life and health of workers. Lack of sleep, overtime, stress due to employment instability, long and dangerous daily commutes, and the presence of harmful chemical substances in the workplace, all contribute to the harsh work regimes at these factories”.

It should come as no surprise that in recent years employees of the factories operating in the KSEZ have begun protesting. In 2011, the media reported on the employee strike at Sosnowiec’s Bitorn. The workers were demanding salary increases (ranging from PLN 900 to 1400) and more secure, long-term employment contracts.

Social movements of the 1990's led to the creation of the special economic zone. © Polska Agencja Prasowa

Two years later there was another strike, this time in response to massive layoffs when some of the production had been transferred to cheaper foreign markets. Another story covered widely by the media was the strike at Gliwice’s BMZ. The women protested against wrongful dismissal, relentless lobbying, and harassment of activists who were members of trade unions.

“All that matters the owner’s profit, we are simply the working mass. Raise your head and you’re fired. The thing people fear most is losing their jobs. To keep them, they are willing to get enslaved and abused or snitch on their workmates. But we don’t want this kind of atmosphere here”.

The largest number of protests, however, took place at Fiat Auto Poland, one of the largest employers in the Katowice Special Economic Zone. The employees repeatedly undertook warning and general strikes against low salaries, lack of stable employment and the exploitation of workers. As for this company, terms such as “labour camp,” or “slave labour regime” are not only voiced by nameless workers who use the anonymity of the web to express his opinion, but also appear in the media reports describing the disastrous situation in one of the region’s most heavily subsidised factories. Since 2007, when the first strike alert was announced at Fiat and the 2008 warning strike, the trade union activists and workers have been battling the management in their struggle for decent working conditions. At the same time, the plant was hit by mass redundancies. With a few hundred people laid off without prospects for re-employment, the Polish authorities had to provide one-time financial assistance to local labour offices totalling a whopping PLN 5 million. The situation in the factory provoked national discussion, becoming the subject of parliamentary debates, ministerial speeches, and even… songs:

The irony of it? This is the same factory which, shortly after its takeover by Fiat in 1992, witnessed the longest sit-down strike in modern Polish history and one of the most important triggering factors leading to the launch of the Katowice Special Economic Zone.