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

AUTOMOTIVE MNCS IN CENTRAL EUROPE
kept on board at Škoda, at least the ‘core
workers’. In 1994, restructuring of production
organisation meant that 800 Czech workers
and a much larger number of foreign workers
lost their jobs. Among these foreign workers
were 800 Cubans, 700 Poles and more then
1,500 Vietnamese (Pavlínek 2008: 97). Yet
these large lay-offs have still been relatively
small in relation to the overall headcount of
15,000 and 17,000 in the early 1990s. Thus,
labour hoarding, even if at a much smaller
scale in comparison to state socialist times,
was still partially preserved. Also, during the
second phase, examples of temporary ‘labour
hoarding’ still exist. Thus, at Audi Györ, during
the periods of model change when production
volumes are low due to technical restructuring
of the assembly line, the company could afford
to keep employees on board.
The second phase of company developments is
associated with industrial upgrading and, thus,
with another type of ‘productionist’ enterprise
norm. VW group’s internationalisation
strategies in all four production locations
intensified in terms of investment volumes,
production and employment numbers that
went together with industrial upgrading. For
Central European managers, the importance
of engineering and technical proficiency has
been at the heart of this modernisation process.
In Škoda, introduction of the Octavia model
in 1996 was described as a crucial
moment despite the fact that the
page 90 joint venture has been in place since
1991 and two early models - Felicia
and Favorit - were already produced
in cooperation with German headquarters.
These two commonly developed models still
had some elements of the original Škoda
design and technology, but local managers
did not express any regret about them being
replaced by Volkswagen technology (Interview
December 2006). The technical and engineering
supremacy of German know-how definitely
seems to have priority for local managers.
International comparative benchmarking
techniques such as Harbour Report, which
compares data of productivity and efficiency,
are familiar to the production management; but
when confronted with relatively ‘bad’ results for
VW group on financial and productivity figures
from the Harbour Report, Škoda management
did not see a big problem (Interview December
2006). The director for industrial engineering
explained that the low productivity figures of
Central European VW subsidiaries can be
explained by low levels of automation. Thus,
the role of comparative benchmarks in labour
costs does not seem to be high. When costs are
evoked, they are used to justify ‘productionist’
decisions such as keeping a high headcount: it
is acknowledged that the share of labour costs
in Central European automotive production is
relatively low. In Škoda’s case it is 20-30% of
total production costs, which is significantly
lower than the share for the VW group as a
whole (around 50%). It is argued that employing
people is cheaper and more flexible than using
machines. These would need to be replaced,
while people can adapt. This fact allowed for
the retention of a high headcount (Interview
December 2006). A similar argument has been
developed by the HR director of VW Slovakia,
who argued that ‘The sophisticated cars that
we produce here demand a lot of manual work
and manual work is cheap in Slovakia’. He also
explained that: ‘One reason for low automation
is that we wanted employment. [..] Ten years