Engine Maker To Shut Down

Rába, which is a mid-cap stock on the Budapest Stock Exchange, sold Rába Engine to the management of the bus engine maker in 2003. From then on, the company rented its production site from Rába and carried on manufacturing of engines for buses and trucks. However, production at Rába Engine recently fell to 100-300 engines from more than 2,000 units in previous years, as orders from the company’s traditional domestic and East European markets dropped. Due to dwindling production, the company has accumulated unpaid bills totaling HUF 1 billion, including a HUF 400 million tag for unpaid rent to Rába, which recently terminated the rental agreement.

Liquidating company Tízek Kft. is now trying to sell ownership in the company to help pay for the debt, which also includes unpaid wages to the company’s 180 workers.

In the meantime, former managers of Rába Engine established Rába Diesel and Gas Engine Maker Kft. with HUF 3 million capital, the legal minimum, on May 17. According to Company Court data, the new company plans to manufacture parts for engines as its core activity. While the new company is not a legal successor of Rába Engine, clients of the latter such as several Volán regional coach operating companies have been informed by the management that production will continue in the future.