The state-owned military-industrial conglomerate, Metals & Engineering Corporation (MetEC), which has been in hot water for the past four months, is shrinking by reducing its staff size by more than half.
With 19,500 employees recruited from the military and civilians, the Corporation will be left with roughly 8,000 employees after terminations and transfers of employees to other institutions.
"The lay off will be made to keep the company from failure," said a senior executive close to the case. "As the company lost its good faith and actual projects, it is in a financial mess."
For staff reduction, the management of the Corporation prepared fiveschemes including transferring employees to the Ministry of Defense and state-owned enterprises, terminations of employment agreements for contract, project and for graduates of Addis Raey Training Centre.
The Corporation will be left with roughly 8,000 employees after terminations and transfers of employees to other institutions.
Half of the outgoing employees will leave the Corporation by being transferred to the Ministry of Defense, which will be managing three industries that will split from MetEC. The nearly 5,000 employees will be moving to Homicho Ammunition Engineering Complex, Gafat Armament Engineering Complex, Dejen Aviation Engineering Industry and Bishoftu Automotive Industry, which the Defence Ministry will manage.
Close to 2,500 project employees who had been on duty at Tana Beles I and Omo Kuraz I sugar projects and the Great Ethiopian Renaissance Dam have has already been terminated by the Corporation.
The employment agreement of 50 contract employees, which have been working at the Corporation after their retirements, will be terminated as of January 9, 2019. About 200 employees that have been working at Welding at Metal & Fabrication Industry of the Corporation have also been terminated.
An additional 2,400 employees that graduated from Addis Raey Training Centre, a project launched by MetEC and Elshadai Relief & Development Association, will be fully expelled. The graduates were trained for seven months in Awash town in construction, farming, garments and manufacturing and were hired by the Corporation at different industries.
For the third quarter of this fiscal year, MetEC has targeted to focus on reforms and ceasing operations. Even after resuming productions, the company will be focusing on manufacturing consumables such as transformers and plastic products, according to a source close to the case.
"Projects like factory commissioning will end afterwards," said the same source.
To recover from financial difficulties and to commence operations, the company is planning to float a tender to sell properties valued at 14 billion Br, which were found during the latest audit at the Corporation. Nearly two dozen senior officials of the Corporation are under police custody accused of crimes of corruption.
Since last April, when the administration of Prime Minister Abiy Ahmed (PhD) came to power, the Corporation has been going through a series of turmoils. It's founding CEO, Kinfe Dagnew (Maj. Gen) is under police custody suspected of high corruptions; and the company's contract for major mega projects with the state, including two sugar factories, the renaissance dam and fertiliser factories have been terminated.
The Corporation is also splitting into two parts - commercial and defence units - following an order by Prime Minister Abiy. Industries of MetEC which manufacture defence-related machinery and equipment will be transferred to the Defence Ministry, according to a draft regulation that is pending at the Council of Ministers.
Upon approval, the regulation will also change the name of the Corporation to National Industrial Engineering Corporation, narrowing down the scope of the Corporation's tasks. Incorporating over 90 companies operating in 15 industries, MetEC was established at the initiation of the late Prime Minister, Meles Zenawi, who envisioned the company to be a major tool for industrialisation and transformation to take the country to middle-income status.