Škoda Auto to hive off hundreds of workers and cut manager numbers

28-01-2015

The Czech Republic’s biggest car maker Škoda Auto is having one of its most successful periods and last year sold a record one million-plus vehicles. However, Mladá fronta Dnes reported on Wednesday, it is planning to hive off some workers into outside companies – a move that could spark strike action.

Photo: Škoda AutoPhoto: Škoda Auto Škoda Auto, which is based in Mladá Boleslav in East Bohemia, has hatched the plan with a view to coping better with future market fluctuations, the newspaper said.

Up to 800 employees are set to be removed from the firm’s payroll and become contract workers for external companies as Škoda Auto focuses on its core business of manufacturing cars.

The organisational shake-up will also hit managers, Mladá fronta Dnes reported. At present there is one manager for every five workers. The auto producer’s executives regard this as a bloated system and want to slim it down to one manager per eight employees.

While factory floor staff are not overly concerned about the fate of their bosses, they have been greatly disquieted by the news that workers in particular areas – such as spare parts manufacturing and export – will be hived off.

The employees are worried that being moved into other firms will see them lose the relatively good pay they receive at present, along with other perks.

The move would affect a small fraction of Škoda Auto’s 24,000 employees. Nevertheless, the workforce are “up in arms” over the “attack” on jobs, trade union representative Jaroslav Povšík told Mladá fronta Dnes.

Mr. Povšík said a heated meeting had been held on Tuesday at which union officials pledged to take action if the company “does not improve”. The steps he outlined include, open-ended strike action as a last resort.

Explaining the decision to staff, board chairman and CEO Winfried Vahland said it had been taken with a view to ensuring the continued existence of Škoda Auto, which is owned by German car giant Volkswagen.

Big challenges lie ahead and the coming decades will be the toughest ever experienced by the company, said Mr. Vahland, adding the move was not aimed at saving costs but at improving efficiency.

At present Škoda Auto has the lowest car per employee ratio among the Czech Republic’s three carmakers, with around 30 a year. Hyundai, by contrast, boasts a figure of 93 cars an employee at its north Moravian plant.

However, that data is not particularly instructive, as Hyundai and the other auto manufacturer TPCA in Kolín carry out assembly alone at their Czech plants. Škoda Auto’s employees also work in the fields of development and sales and marketing.

The biggest markets for Škoda Auto’s products in 2014 were China (with over a quarter of a million sales), Germany, Russia and the Czech Republic.

28-01-2015