October 5, 2017 / 2:45 PM / a year ago

Skoda unions threaten overtime cuts if VW considers production move

PRAGUE (Reuters) - Unions at Volkswagen’s (VOWG_p.DE) Skoda Auto said on Thursday they would cut back on overtime work if the group considers shifting any production from the Czech carmaker to Germany.

A Volkswagen (VW) logo is pictured next to a logo of Skoda during the second media day of the 86th International Motor Show in Geneva, Switzerland, March 2, 2016. REUTERS/Denis Balibouse

Volkswagen managers and unions in Germany are seeking to curb competition from lower-cost Skoda by moving some of its production to Germany and making the Czech brand pay more for shared technology, Reuters reported.

Wednesday’s report, which cited company sources, has raised concerns of job losses within the Czech Republic’s biggest exporter, which has seen its business grow strongly in recent years with annual sales surpassing 1.1 million vehicles.

But while it has steadily won business from rivals, this has included from Skoda’s sister brand VW and the Czech carmaker even beat Audi’s operating profit margin last year.

In a letter to Skoda employees reacting to the Reuters report, Skoda’s main union chief, Jaroslav Povsik, objected to statements that Skoda had an unfair advantage.

“Such news is in essence aimed against Skoda Auto, its employees who are admonished for their success, flexibility, production quality and their business results,” he said.

“Behind this, though, is an enormous deployment of all employees (and) work on weekends at the expense of family life.”

Povsik said if “this situation will continue and not come to a quick correction, unions... will no longer support flexible work and other necessities for growth of the company”.

Tension between VW’s brands is expected to rise ahead of a Nov. 17 supervisory board meeting which is due to approve annual investment budgets for the world’s biggest carmaker.

The Czech union has warned any production shift could result into as many as 2,000 lost jobs at Skoda, which employed 28,000 at the end of 2016, excluding temporary staff.

The prospect of production moves has also prompted Prime Minister Bohuslav Sobotka to say he wants to meet Skoda’s leadership and unions to discuss any shift.

Union representatives were not immediately available for further comment and Skoda Auto had no immediate comment.

Reporting by Petra Vodstrcilova; Writing by Jason Hovet; Editing by Alexander Smith

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