Business News

Photo: CTK

In business news this week: management and trade unions at Skoda Mlada Boleslav resolve long-standing pay dispute. The state-controlled Czech airline CSA reports another rise in passenger traffic in the first quarter and, the world-famous fashion brand Giorgio Armani may have its suits made at Czech clothing producer OP Prostejov.

Pay dispute at Skoda resolved, following one-day strike

Photo: CTK
Trade unions and management at the Skoda Auto car plant in Mlada Boleslav this week reached agreement in a long running pay dispute. A one-day staggered strike at the company on Tuesday resulted in losses of around 55 million crowns (2.5 million USD) putting pressure for negotiators to reach a compromise solution. Under the deal wages will rise by 12.7 percent until the end of 2008. Workers will also receive a one-off payment of 10,000 crowns (486 USD) for last year's record company results with further bonus payments linked to the firm's performance. Many workers, hoping for a 17 percent increase, are said to be disappointed with the deal; analysts predict that the agreement reached will be a psychological boost for unions elsewhere in seeking higher wages.

CEZ to invest in power and mining joint venture in Serbia

Czech electricity giant CEZ announced on Tuesday it had signed an agreement to form a power and mining joint venture in Serbia in which it will invest up to 1.4 billion euros (1.89 billion USD). Under the agreement signed with the energy company ERS and the Serbian state-owned mining company and power company Rudnik i Termoelektrana Gacko, CEZ will have a 51.0 percent stake. The joint venture will lead to the production of a 600 MW power station, develop current coal mining around the north-eastern town of Gacko and revamp an existing 300 MW power plant. CEZ will bring the financing to the venture, with the other parties bringing their existing power and mining assets.

CSA sees rise in passenger traffic in first quarter

The state-controlled Czech airline CSA saw a rise in passenger traffic once again in the first quarter of 2007. CSA carried 1.06 million passengers during the first three months of the year, almost 6 percent more than during the same period in 2006. Last year CSA reported as 4.7-percent increase on 2005. The cash-strapped airline hopes to return to profit in 2008 following a major restructuring programme launched in 2006 which includes the shedding of non-core activities. The government has charged the transport and finance ministries to come up with a privatisation plan for the 90.0 percent state-owned carrier by the end of this year.

Trade minister Riman says EC has underestimated economic growth in Czech Republic

Photo: European Commission
Czech Industry Minister Martin Riman on Thursday attacked the grounds on which the European Commission has slashed the country's future greenhouse gas emissions quota. Riman said the commission had "seriously underestimated" future Czech economic growth for 2009 and 2010. "While the commission counts on growth of around 3.6 percent, the average estimate of local institutions such as the Czech National Bank and the Czech Statistical Office is one percentage point higher," Riman said, adding that the finance ministry counts on a 5.1 percent growth for both years. Riman said his analysis would be used as a basis for a future government decision on whether to lodge an official challenge to the commission's decision.

OP Prostejov looks set to get order from Giorgio Armani

The world-famous fashion brand Giorgio Armani may have its suits made at Czech clothing producer OP Prostejov which has already prepared a trial order for the Italian company, according to the business daily Hospodarske noviny. "They liked both our production and our prices. I assume we will get the order," OP Prostejov CEO Frantisek Tuhy told the paper. The contract worth millions of crowns should be signed within the next few weeks, he added. Armani is not the first world brand to show interest in cooperation with OP Prostejov. The Czech firm already produces suits for Cerutti, Mexx and Massimo Duti, for instance. Hugo Boss has allegedly shown interest in returning production to OP Prostejov after a two-year break.