Czech labour shortage forces Skoda to recruit workers from Vietnam

http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article2964036.ece

Skoda has begun to recruit workers from Vietnam for its factories in the Czech Republic as it struggles with a labour shortage.

The Czech carmaker is having to search further afield for employees amid increased migration of Eastern European workers and a booming domestic automotive industry.

Skoda, which is owned by VW, has used an employment agency to recruit several hundred workers from Vietnam, whom it regards as disciplined and attentive to detail.

A spokesman said: “We have a shortage of labour so we are using employment agencies to bring in staff. Vietnam is one of the areas we are bringing people from. We would rather find people close to home and it is a long way for them to come, but until we can find the right people nearer home this is what we will have to do.”

It is not the first time that workers from Vietnam have moved to the Czech Republic. When the country was under communist rule as Czechoslovakia, Vietnam, also under communist control, and Cuba sent workers in return for arms and heavy engineering goods.

Many stayed in Czechoslovakia after the overthrow of communism in 1989 and set up small businesses. Now the Vietnamese are the third-largest immigrant group in the Czech Republic, behind Ukrainians and Slovaks.

Skoda, which has been steadily repositioning itself in the car market as more of a value brand, is one of the Czech Republic’s biggest employers. It has more than 27,000 workers in its three factories.

The open-borders policy of the European Union means that it is suffering recruitment problems. Many Czech workers have left for better paid jobs in Western Europe. Additionally, those from the neighbouring countries of Poland and Slovakia, which traditionally have made up the majority of foreign workers in the Czech car industry, are also choosing to go further or to take jobs in their own growing automotive industries.

The Czech Republic’s automotive industry employs more than 120,000 people, an increase of 40 per cent on 15 years ago. A number of Western carmakers have built factories in the country in recent years because of its lower labour costs and its central location in Europe.

Skoda’s own production, which includes some output from a factory in China, is set to exceed 640,000 vehicles this year. In 1994, the Czech company, which is more than 100 years old, produced only 173,000 vehicles. The carmaker believes that it can make one million cars in the forseeable future.

The Czech Republic is trying to make it easier for more migrant workers to settle in the country so that it can maintain a decent labour pool. It intends to issue green cards for workers outside the European Union that will combine rights for residency and work permits.

Vietnam’s emerging automotive industry and its broader economy are being closely watched for evidence that the country could be the next China in terms of rapid industrial growth. This year it became the 150th member of the World Trade Organisation. Its car industry is still young because traditionally Vietnam imported virtually all of its vehicles from communist Eastern Europe.

However, Japanese carmakers, such as Toyota, Honda and Mitsubishi, began to move into the country in the mid-1990s, producing cars in partnership with Vietnamese businesses.

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