Skoda’s Union Problems

Skoda Auto is a major subsidiary of Volkswagen and recipient of quality Volkswagen parts such as VW cold air intakes. The VW cold air intake boosts the vehicles’ capacity to provide more power even for long extended drives. The Skoda is also the ugly duckling turned swan brand of Volkswagen. It used to be the laughing stock in the automotive world. But due to the ingenuity and remarkable management of Wolfsburg-based automaker, Skoda has turned into one of its most profitable brands. And presently is one of the cash cows of Volkswagen together with Audi.

Skoda Auto is presently having problems with its work unions and according to union head Jaroslav Povsik in an interview with CTK recently they will organize information meetings next week to support their wage demands.

And in the event that no agreement is reached, the unions are prepared to organize a general meeting with one-hour token strikes in all three shifts, Povsik added. Aside from that, the unions is also planning to launch a strike for an indefinite period of time this coming April. There were already four rounds of bargaining agreements that have already taken place at the Skoda Auto but unfortunately with no positive results. Both parties have agreed to set their deadline on March 31 to finalize their agreement regarding the current wage contract that will expire on that date.

Martin Jahn, Skoda HR director in an interview with CTK said, “We are halfway through the talks, there is absolutely no reason for protest meetings. Our goal is to reach an agreement by end-March.”

On March 19, 2007 the first information meeting will be held at the welding plant and will cause the plant to fall sort by 30 cars according to Povsik. The unions plan to organize a total of sixty meetings before March 22 and that will include meetings even on night shifts. Povsik said, “We will explain our demands to people. We see the wage growth that the company proposes to us is too low, considering its record results. We also reject the new wage system that the company proposes, as it does not guarantee a wage growth for all employees.”

It was last February 8 when the unions and the management first presented their wage proposals. Volkswagen’s Skoda Auto proposed a 6.1 percent wage increase for the period between April 1, 2007 and March 31, 2009. On the other hand, the unions want an increase for only one year covering until March 31, 2008 and want a 17 percent growth on average.

Currently the average monthly wage of the car maker excluding managers’ wages is between Kc22,000 and Kc27,000. The average monthly wage in the Czech Republic stands at around Kc20,000. The workforce at Skoda Auto has increased by 700 to 26,728 for the next two years.

Last year Skoda Auto has obtained an increase in sales by 11.7 percent to 550,000 cars. Its recorded net profit increased by 40 percent to Kc11.06bn.