Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

ALEKSANDRA JANOVSKAIA
to share its fate. At that time, Škoda had 237
domestic suppliers. Its bankruptcy, therefore,
would have had a high impact on the regional
economy (Pavlínek 2008: 80).
However, the time dimension is very important
for the understanding of this privatisation
strategy. Foreign investors were perceived by
the public and the government as a solution
for the company’s short-term survival, but also
as a guarantor of the long-term prosperity of
the company as well as the regional economy
as a whole. Thus, these so-called ‘strategic
privatisations’ were not only motivated by the
short-term financial returns. Preserving the
existing industrial capabilities – even if they were
weak and not up to international competition at
that moment – was considered crucial because
preserving industrial traditions was a symbol of
continuous economic development. It is in this
context that foreign investors were considered
as ‘saviours’ of local companies and guarantors
of long-term enterprise success.
The role of government was important, as it
could dictate the conditions of the joint venture.
The preservation of the Škoda brand was a
precondition for privatisation. It was explicitly
expressed in the privatisation negotiations,
together with other demands such as
maintenance of the labour force, continuation
of relations with local suppliers, continuation
of R&D activities and Czech participation
in company’s management ( Jung, Klemm et
al. 2004). The choice of the foreign partner -
the VW group - was thus made dependent
on the condition of preserving the industrial
capabilities of the enterprise. The other foreign
bidder for Škoda was Renault, yet this major
French car manufacturer was not interested in
preserving and developing Škoda’s industrial
capabilities: ‘to opt for a co-operation with
Volkswagen was the credible commitment
of Volkswagen to keep Škoda as a brand
manufacturer coupled with the promises of
major modernisation’(Sperling 2004: 184).
The joint venture agreement signed between
the VW group and the Czech government
in April 1991 explicitly stated the level
of expected investment on the part of the
German investor and the future production
capacities. It also included clauses concerning
Czech components producers and Škoda’s
employees (Pavlínek 2008). These numerous
special clauses were developed by government
officials and were one of the first expressions
of government stakeholders before a more
formalised process of privatisation was
established. As Pavlinek (2008: 86) points out,
it was only several months after drafting the
Škoda joint venture agreement that the Czech
Ministry for National Property Management
formulated a directive that set out how
privatisation projects should look.
Yet the joint venture plants were made by
government officials in cooperation with
the management and trade unions, and not
against their will. The role of Škoda’s direct
stakeholders - i.e. management and trade
unions - in the privatisation decision was
crucial. Local management supported
the idea of a joint venture with
a foreign company: ‘as a leading
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industry in Czechoslovakia and based
on past trade experience with Western
partners, the Škoda management quickly
realized that drastic measures needed to be
taken if the company was to survive under the