Strike at Škoda Auto

By 30 March 2005 management and trade unions at the Škoda Auto plant at Mladá Boleslav had been through thirteen unsuccessful rounds of bargaining on a collective agreement; and the old collective agreement expired on April 1. Wages were at the heart of the dispute - the unions demanding a 10% increase in tariff wages; the management was prepared to add just under 3% to offset inflation. What is more, the management demanded wage restraint for a period of 15 months. Under these circumstances, the trade unions organised a three-hour strike on 30 March 2005. An 80% turnout by workers convinced the management that it had to yield: in the new collective agreement it undertook to raise wages by 7% and guaranteed further increases. The strike was the first ever at the Škoda motor works in its 100 years of existence.

Wage bargaining

Labour relations in one of the most important companies in the Czech Republic - Škoda Auto (Škoda Auto a.s.) - have seriously worsened in the first three months of this year. Although there has been dialogue between representatives of the trade unions and management in order to conclude a collective agreement for the coming period, with negotiators meeting a total of 13 times by the end of March, the two parties could not agree on the most important point - wage developments.

The trade unions demanded that tariff wages rise by 10%, the company management only offered wage growth in line with inflation, i.e. just under 3%. The trade unions based their demand on the fact that 2004 brought record profits for the company: CZK 3.5 billion. They also argued that pay in Škoda Auto is the lowest in the entire Volkswagen concern. The management countered that the company had to continue with the economy measures that were being introduced.

Strike

In this situation the company trade union council decided to organise a three-hour warning strike combined with a demonstration, and also threatened an indefinite strike. The strike lasted three hours, from 1 to 3 p.m. and from 10 to 11 p.m., and a demonstration was held in front of the company headquarters in Mladá Boleslav. In total, 17,000 people went on strike, that is 80% of all core employees. Production stopped -230 cars were not produced, and the loss is estimated at CZK 75 million.

New enterprise-level collective agreement

Immediately after the afternoon phase of the strike finished on March 30, another round of wage bargaining started. The employer’s first reaction was to reject the trade union demands. When the management took on board the high level of participation in the strike, however, it reappraised its position and accepted most of the trade union proposals. On April 4 the text of the agreement was finalised and two days later the collective agreement was signed.

The enterprise-level collective agreement at Škoda Auto runs from 1 April 2005 to 31 March 2007. It brings a 7% increase in 'tariff wages' starting in June, an increased 'personal assessment' starting in July, a CZK 3,500 bonus for April, conservation of the '13th pay', and a CZK 100 increase in the contribution towards 'supplemental pension insurance' to CZK 300 per month starting in April 2005. These wage measures will cost the company CZK 1.3 billion.

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