VW attempts to placate Czech passions over Skoda production move to Germany

By bne IntelliNews October 11, 2017

Volkswagen on October 11 attempted to placate Czechs angered that their 'family silver' carmaker Skoda Auto could lose some production to Germany by stating that as a matter of fact it is planning to add jobs in Czechia.

Unions at Skoda have threatened to cut their commitment to overtime if VW goes ahead with the transfer of the production of the Superb car to Germany on the basis that not enough workers can be found in Czechia–currently enjoying the lowest unemployment rate in the EU at 3.8%–to enable the company to meet demand for the model as well as planned new cars such as SUVs.

Skoda CEO Bernhard Maier relayed VW's job creation plans to reporters. He stressed that the Czech Republic would remain Skoda’s home and that the German giant's subsidiary was indeed set to add jobs locally to meet capacity demands. “Skoda is running at the edge of its capacity, which is evidence that our strategy is working. At the moment, concerning global demand, we are not able to cover it from the Czech Republic, [and] for this reason we are looking around at other production capacities,” Reuters reported him as saying.

Skoda had taken on 3,000 workers in recent months and sold an all-time high of 1.13mn vehicles last year, he added. Not only that, but Skoda Auto's global car sales rose by 5.4% to 112,900 vehicles in September, its best ever monthly result.

Analysts wonder at how VW has managed to let news of the possible production transfer to Germany reach the public domain just prior to the Czech general election scheduled for October 20-21. Skoda, more than a century old, is the pride and joy of many Czechs, thus any hint of such a production transfer was bound to stir passions.

Also on October 11, Czech Prime Minister Bohuslav Sobotka said Skoda had assured him that it would do its utmost not to jeopardise jobs in Czechia. The unions fear a production shift of the Superb could mean 2,000 lost jobs at Skoda, an employer of 28,000 full-time workers at the end of 2016.

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