Industry

Industry

The range of products manufactured in Polish plants increased greatly in the postwar years, mostly through construction of new facilities in the period of accelerated industrialization. By the 1980s, heavy industry produced processed metals (mainly iron, steel, zinc, lead, and copper) and derivative products; chemicals; a wide variety of transportation equipment, including ships and motor vehicles; electrical and nonelectrical machines and equipment; and electronic and computer equipment. The most important light industry was textiles.

Under the central planning system, statistics on production by individual industries and on their relative shares in total industrial production through the communist period were distorted by administrative price fixing and unequal distribution of industrial subsidies. In general, however, between 1960 and 1989 the relative importance of food processing declined steadily while that of the engineering and chemical industries grew steadily. The share of light industry declined early in the period but then increased under the stimulus of expanded Soviet export markets. The relative importance of the metallurgical, mineral, and wood and paper industries remained basically unchanged. Within the engineering group, the machine building, transport equipment, and electrotechnical and electronic industries increased in relative importance between 1960 and 1989.

The engineering and chemical industries received a considerable injection of Western technology, including patents and licenses, under the technology import program of the 1970s. In the late 1980s and early 1990s, however, economic crisis, recession, and postcommunist reform measures brought a drastic decline in output in those industries. For example, output of the artificial fertilizer industry dropped 32 percent between 1989 and 1990, mostly because rising fertilizer prices reduced domestic demand. A sharper drop was prevented by quadrupling fertilizer exports. In 1991 output of nitrogenous fertilizers remained stable, but output of phosphoric fertilizers again dropped sharply.

Some existing manufacturing facilities could support expansion of production, but others required modernization before they could be exploited efficiently to meet Poland's new economic priorities. Other facilities offered no possibility of expansion or modernization and were simply closed. In the Polish steel industry, which was second only to that of the Soviet Union in Comecon, only two plants had been built between 1945 and 1982. The Lenin Iron and Steel Plant at Nowa Huta, the largest in the country, was built near Kielce in 1954 with aid from the Soviet Union. Although some plants were modernized in the intervening years, most of the prewar Polish steel plants featured low productivity, low-quality metal, and poor working conditions, as well as very high pollution levels.

With the help of foreign experts, the Bielecki government undertook a number of sectoral studies. The objective was to draw attention to the existing obstacles to growth and to increase international competitiveness of industrial enterprises in various sectors. Four major restructuring programs were prepared in cooperation with United Nations experts. They included improving the management and modernization of the agricultural machinery industry, restructuring the production of fertilizers, improving management and technology in the pharmaceutical industry, and increasing the degree of automation in various branches of industry.

Light Industry

On behalf of the World Bank, United States experts assessed Polish light industry in early 1991. They found the critical difference between Polish and West European manufacturing systems to be computerization; the high degree of computerization utilized by the latter systems enabled them to use short production series and make quick design changes. In textiles, Polish machinery was geared to produce intermediate-quality yarn that could not be made into exportable products. Polish finishing machinery was also outmoded. Although textile enterprises had been privatized quite early, they nevertheless remained too labor-intensive and used materials inefficiently, according to the report. On the other hand, Polish combed woolens and linen products were rated as potentially competitive in the European market.

Automotive Industry

In 1992 the Polish automotive industry was expecting to modernize through a series of joint ventures with Western firms. In 1992 Fiat Corporation, the pioneer of Western automobile production in Eastern Europe since 1973, invested in Polish production of a new model at its Bielsko-Biala plant. Fiat was to arrange for export of a large part of the output of that model. Also in 1992, General Motors Europe, the European branch of the United States automotive giant, was expected to begin assembling cars in Warsaw by agreement with the Warsaw-based Passenger Car Plant. Volvo of Sweden planned to produce buses, trucks, and tractors at a plant near Wroclaw following the signing of a joint venture agreement in early 1992.

Construction Machinery

The construction machinery industry, which expanded during the 1970s on the basis of Western licenses, traditionally exported a large proportion of its output to the Soviet Union, with which some joint ventures were established. Under license, with Western firms, Polish machinery plants produced mobile cranes, heavy truck axles, hydraulic equipment, truck-mounted concrete mixers, and other construction machinery. In the 1980s, reduced Western investments in Poland curtailed demand for these products. In the 1990s, the highly centralized, bureaucratic construction machine industry was reorganized into a large number of small- and medium-sized private firms. The reorganization targeted expansion of the housing construction industry, which received high priority in reform planning. The second goal of this reorganization was to revive demand for the relatively modern and sophisticated construction machines that the Polish industry was able to produce.

Shipbuilding

Polish shipbuilding expanded rapidly in the 1960s and 1970s, spurred by the Soviet drive to become a maritime superpower. In the 1980s, the industry included six shipyards, twenty-one equipment factories, and three research and development centers, altogether employing about 57,000 people. In that decade, Poland became the fifth largest producer of ships in the world, exporting most of its products to the Soviet Union. Some 1,000 plants all over the country supplied materials to the shipbuilding industry. At the end of the 1980s, however, the industry suffered greatly from drastic reduction in orders from the Soviet Union and other customers, the loss of government subsidies in the midst of production, and a rapid rise in domestic material costs for ships already contracted. Nevertheless, the shipbuilding firms were able to attract many Western licenses, and they retained a highly skilled labor force. If modernized and restructured, the industry had the potential to significantly accelerate its production of modern ships, including fishing vessels, factory ships, trawlers, car ferries, container vessels, roll on-roll off ships, and tankers. The wellequipped Gdynia Shipyard was capable of building very large bulk cargo ships, but it operated at only 30 percent of capacity in 1991. Large new contracts were expected to more than double that level of production by 1994, however. In 1992 it seemed probable that the shipyard's very high debt would be eased by a two-step transition, first into a partnership with the State Treasury and ultimately into a private enterprise. In 1991 the Ministry of Industry completed a restructuring program for the entire shipbuilding industry in cooperation with Western experts.

http://www.nationsencyclopedia.com/economies/Europe/Poland.html
https://en.wikipedia.org/wiki/Poland


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