Slovak Volkswagen strike settlement seen providing Czech inspiration

With wages set to a major issue in looming Czech parliamentary elections, a major strike by Volkswagen workers in neighbouring Slovakia has grabbed a lot of attention. Car production is the leading manufacturing sector in both countries with the German auto producer also the parent company of leading Czech producer Škoda Auto.

The strike at the Volkswagen, Bratislava, photo: ČTK

The strike at the Volkswagen, Bratislava, plant was the first since the German auto giant took over in 1991. Like its Czech counterpart, Škoda Auto, the Bratislava factory is one of the biggest private employers in the country with 12,300 workers and is a flagship of the booming manufacturing sector.

The Bratislava plant produces middle to top of the range cars such as the Porche Cayenne and SUV Volkswagen Toureg as well as smaller models such as the Volkswagen Up and Škoda Citigo. This year Volkswagen bosses gave the plant a vote of confidence by picking it out as the sole producer of the new SUV, the Audi Q8, with production starting in 2018.

The Slovak and Czech auto sectors currently share some of the same challenge: record low unemployment and a shortage of skilled workers although average wages at the Bratislava plant are around twice the Slovak average at around 47,000 crowns (1804 euros) a month.

It was in the context that unions in Slovakia put in a bid for wage rise of around 16 percent. Volkswagen managers offers around 8.5 percent in two slices. Following the six day strike, the two sides finally hammered out a deal offering rises of around 14 percent with employees returning to work on June 26.

Erich Handl is editor of the Czech magazine Automakers which covers the Czech and regional auto industry. This is how he summed up the Bratislava plant:

The strike at the Volkswagen, Bratislava, photo: ČTK

ʺThe Bratislava plant produces around 400,000 cars a year. This is a comparable figure to the amount per worker that are produced at other plants around Europe including the Czech Republic. "

Handl added that the latest wage deal still puts Slovak’s Volkswagen workers way behind their German counterparts.

"I think that this is still around half of what Volkswagen would pay a worker in Germany. The labour force in Slovakia can demand higher wages this year because there is a severe shortage of skilled workers there at the moment. "

But the Volkswagen strike and pay settlement could well provide a lead for Czech unions to follow, Handl says.

"I think that this Slovak example could well provide inspiration for Czech unions because the era of cheap labour is ended. In the former Czechoslovakia there is simply a shortage [of skilled workers] and I would expect them to increase their demands with employers.ʺ

Bosses and unions at the Czech Republics three main car plants have already concluded pay and conditions deals for this year. But the preparations will be made again for a new round of talks at the end of the year and talks peak at the start of 2018.