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3 Post-1989 Transformation of Škoda Auto The collapse of state socialism in Czechoslovakia in November 1989 re- sulted in an immediate shock for Škoda. Because of the persistent labor shortages so typical for the centrally planned economy, resulting from its inefficient use of labor, Škoda had to increasingly rely on forced labor and foreign workers in the 1970s and 1980s. It built a prison right behind the border of its factory in the 1970s. By the late 1980s the company em- ployed up to 1,600 convicts and 1,520 Vietnamese workers. Convicts worked in the most outdated shops such as the metallurgy, press and me- chanical finish. They accounted for almost 90% of employees in the press shop, for example. All convicts left suddenly after the presidential amnesty in early January 1990. Škoda was paralyzed. The Favorit assembly line slowed from the daily production of 212 cars on January 2, 1990 to 57 cars on January 3 and it stopped completely on January 4 when no cars were made. The situation led to massive losses for Škoda and a hasty reorgani- zation within the factory. However, newly employed (including 230 sol- diers) or inexperienced workers transferred from other assignments within
Published: Mar 4, 2008
Keywords: Assembly Line; Joint Venture; Foreign Worker; Assembly Plant; Annual Capacity
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