Skoda Auto production line

Matt Atlas

Skoda To Halt Production For A Week Due To Chip Shortage

The Mladá Boleslav-based carmaker Škoda Auto will completely stop production in all three of its plants in the Czech Republic from 27 September. The reason is the lack of chips that are used in on-board electronics. This was stated today by the weekly Škodovácký odborář.

According to the unions, the company planned a mass holiday for Monday, September 27, because Tuesday the 28th is St. Wenceslas Day. Employees would have four days off at the weekend. “At the same time, we will continue to do so by canceling shifts until the end of the week, including the overlap into Saturday’s shifts of the seventeen and eighteen-shift system.

Employees receive 85 percent of the average salary for a canceled shift, which includes, for example, extraordinary annual bonuses. They are thus at the level of their daily earnings. According to Povšík, however, there is a risk that wage compensation will have to be reduced if the situation continues to deteriorate. According to him, people working in Škoda would then receive, for example, 80 percent of the average salary. The set minimum wage compensation is 60 percent.

According to unions, there are shutdowns in Volkswagen Group factories around the world. “Some high-margin companies, such as Porsche and Audi, are partially preferred. Planned outages are especially important for planning suppliers and logistics flows,” said Povšík.

The shutdown in production will be used to repair the busy roundabout in Mladá Boleslav in Průmyslová Street, which the builders will also extend by one lane. “This will significantly relieve traffic and speed up the exit from the 13th gate. In normal operation, such a building modification would cause incredible chaos,” said Povšík.

According to the union leader, the situation with chips has improved slightly, the factories in Malaysia have already resumed their production, but not yet to the maximum. Povšík estimates that full production, including overtime, will not start until the end of the year. “The situation is unlikely to be consolidated in 2022 either, at least at the beginning of the year in the first and second quarters,” he said.

At the same time, Povšík stated that the unions, in cooperation with the company, will keep employment at the highest possible level. “There may be partial transfers of employees, but always under the full control of the KOVO departments at Škoda Auto,” he said. According to him, the situation is worse with the transition to electromobility, when the number of employees corresponds to the types of assigned products within the group. “We can handle what is happening with chips now,” he added.

This week, production is also in the Toyota Motor Manufacturing Czech Republic in Cologne, and here the reason is the lack of chips. Production of the small Toyota, Peugeot and Citroën cars should resume on Sunday evening, September 19, ie by night shift on Monday.

The Nošovice carmaker Hyundai has not yet had to stop production due to a lack of components. “There are problems, but we don’t have to interrupt the shifts yet,” Petr Michník, a spokesman for the Silesian carmaker, told ČTK. He added that there will be no overtime Saturday shifts in Nošovice, which the company originally planned for September. The carmaker has previously stated that it adapts the current availability of specific parts to the production plan and tries to strengthen stocks.

Škoda Auto employs almost 39,000 people, of which about 34,000 in the Czech Republic. These are regular employees, in addition to them, agency workers also work in the car factory. The average tariff wage at Škoda Auto is around 56,000 crowns.

Last year, Škoda Auto delivered over one million cars worldwide. It operates three production plants in the Czech Republic, produces in China, Russia, Slovakia and India, mostly through group partnerships, as well as in Ukraine and Kazakhstan in cooperation with local partners. It is active in more than 100 markets.