Vucic on Magna in Odzaci: 1,000 Jobs to Shrink
In Ratkovo near Odzaci, the president for the first time publicly linked the rising minimum wage to job cuts at the auto parts plant, and announced a meeting with Magna for September 16.
Magna’s plant in Odzaci employs about 1,000 people, and according to Serbian President Aleksandar Vucic, that number is set to shrink. Vucic made the statement on Sunday, September 6, during a visit to the Phi Academy company in Ratkovo near Odzaci, where he for the first time publicly linked the rising minimum wage to shrinking output at labor intensive factories.
“You have Magna there with 1,000 employees, and that number is going to shrink,” Vucic said, adding that the state would have to step in immediately and bring in new investors to Odzaci so that, as he put it, the municipality would not face a catastrophe.
Why the minimum wage affects job numbers
Vucic pointed to a mechanism he had not previously named in connection with a specific company: labor intensive companies with lower wages cut output as soon as the state raises the minimum wage. Magna’s Odzaci plant makes parts for car seats, work that requires a large workforce at a relatively low cost, which puts this type of production first in line when labor costs rise.
A meeting with Magna is scheduled for September 16. Vucic said the government would then try to preserve as many jobs at the company as possible. “So we’ll try to work it out with them and save a large number of jobs, and see what else we can do for Odzaci,” the president said.
Magna operates at four locations in Serbia: Belgrade, Novi Sad, Odzaci and Aleksinac, with production concentrated in the latter two cities. The Odzaci plant has been running since 2012, and the Aleksinac facility opened in 2020.
Minimum wage to rise 9.2 percent from January 2027
The Serbian government decided to raise the minimum wage on August 20, 2026. Starting January 1, 2027, the minimum wage will rise by 9.2 percent to 405 dinars per hour, or about 70,000 dinars a month, roughly 600 euros. According to Vucic, that decision is the direct reason behind the concern over jobs at factories like Magna’s.
Subsidies for Phi Academy, a plan for 150 new jobs
While flagging the possible job losses at Magna, Vucic at the same time offered state subsidies to Phi Academy owner Branko Babic if he hires another five to ten people. “If you hire people, you can count on subsidies,” the president told Babic.
Babic told the president he has a plan that would create 150 additional jobs in Odzaci, to which Vucic replied that hiring on that scale would qualify for additional state subsidies. Phi Academy is a training academy for aesthetic medicine, permanent makeup and Japanese eyebrow shading, founded by Babic in 2011, which today employs 22 people in Ratkovo.
“For us, 22 jobs in Ratkovo matter enormously,” Vucic said, pointing to the difference in scale between the small academy and the thousand workers at Magna whose jobs are now uncertain.
Infrastructure investment in the region
The visit to Ratkovo was part of a broader tour of the West Backa District. Vucic said 21 million euros had been invested in the district’s infrastructure over the past three years, building about 100 kilometers of regional, national and local roads. Also present with the president at Phi Academy were Minister of Agriculture, Forestry and Water Management Dragan Glamocic and President of the Provincial Government of Vojvodina Maja Gojkovic.
Until now, srpske.rs has covered the minimum wage increase strictly in terms of the figure and the government’s decision. This is the first time the authorities have publicly named a specific company whose workforce could shrink as a direct consequence of that decision. The meeting scheduled for September 16 should show whether, and to what extent, Magna will keep its workers in Odzaci.
