Ilomantsi’s via dolorosa
ends with flag raising
74
In April 2016, Kesla’s subsidiary MFG Components announced that it was negotiating the clo-
chine engineering workshop made parts for Ke-
sure of its Ilomantsi machine engineering workshop. According to the stock exchange release,
sla and also for external customers. They were
the closure was planned for the end of the same year, due to “the prolonged weak financial
often individual pieces, which took a lot of time
situation of the Ilomantsi machine engineering workshop”. The employees of the Ilomantsi
and labour. There were all kinds of disturbanc-
unit responded to the news with a walkout. The escalation of the wretched situation began
es and delays – many products were not at all
many years earlier.
suitable for our production and the operations
Ilomantsi had manufactured hydraulic cylin-
Founded by the late Pekka Shemeikka, MFG
ders and machining parts for Kesla’s products.
had produced a decent result. The purchase
In 2005, the machine engineering workshop
price of the company has even been described
was incorporated into Kesla Components Oy,
as cheap. Even so cheap that 12 years after the
a wholly-owned subsidiary of Kesla. Jari Ne-
transaction Veli-Matti Kärkkäinen, Chairman
valainen, then CEO of Kesla, described the in-
of Kesla’s Board of Directors, described the
corporation in an interview on 27 October 2009:
transaction as follows: “Just like Sulo Vilén – we
“Until the incorporation, the Ilomantsi factory
bought it because it was cheap.” Sulo Vilén was
had been carried by its parent company with-
a Finnish comedy character in the late 1970s.
out any real market pressure. Operations were
In the TV series, Vilén was an unlucky service
too passive – they just delivered what Kesla or-
station entrepreneur whose business was not
dered. The incorporation seeks to change the
going well at all, but who kept buying all kinds
situation and activate sales.”
of things – because they were cheap.
“Just like Sulo Vilén”
Motivation put to test
In 2007 Kesla had purchased MFG Components,
When Kesla purchased MFG Components in
a company based in Tohmajärvi, which was sup-
2007, the product range of the Ilomantsi ma-
posed to bring with it the sales know-how of
chine engineering workshop changed. The
machine engineering systems and also external
atmosphere was described by Harri Mustonen,
customers. The idea was to give the company
who joined the company in 1997. He observed
more supports in order to make it less depend-
the goings-on in Ilomantsi as a production
ent on the cycles of the forest industry.
worker and team leader: “The Ilomantsi ma-
were not profitable.” When production stalled, Kesla had to buy the products it needed from abroad. Everyone in Ilomantsi knew the reasons for the losses. The situation took its toll on the team’s motivation.
Bad personal chemistry Juha Tahvanainen, who worked as a mechanic in Ilomantsi for 25 years, explains that he understands Kesla’s management’s motives regarding MFG, but in his opinion the implementation started off on the wrong track right from the start. A manager was elected from in-house to run the company. There was bad personal chemistry, and the workers in Ilomantsi felt that they were being treated condescendingly.
Time of crisis Kesla’s turnover had dived in 2015, due, for example, to the crisis in Crimea. At the same time, Kesla was in the middle of a cash crisis. On 27 May 2015, the company announced that it had
