Slovakia may hold key to European auto industry

Bratislava area home to factories that pump out over 1M vehicles per year

Published: September 17, 2017, 6:25 PM
Updated: November 21, 2021, 3:07 PM

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According to a recent Financial Times story, the future of the European car industry may well depend on whether Slovakia can find enough workers to keep factories operating at peak capacity.

You can be forgiven for not recalling any Slovakian makes or models, but chances are you know a fair number of products that are created in the landlocked country, and not just historical models (as part of the past Czechoslovakia, it was home to two of the world’s oldest car makers — Skoda and Tatra) but also current models such as the Porsche Cayenne.

The Bratislava plant was established in 1971 as the Bratislavské Automobilové Závody (BAZ) and produced a variety of models under the BAZ banner, and a couple Skoda models, for two decades until the Iron Curtain collapsed and Volkswagen bought an 80% stake, and continued to make Skoda models as well as select VWs such as the Passat.

Volkswagen bought the rest of the shares in 2002 and started production of the company’s large SUVs — Audi Q7, VW Touareg and the Porsche Cayenne (partially, with the interior, finishing and final inspection back in Germany) — and recently also the Bentley Bentayga. At the other end of the spectrum, the plant also produces the Volkswagen up! and rebadged variants.

Amid growth in Slovakia’s auto industry (production at its big 3 plants — VW, Groupe PSA and Kia — increased by 500% over the past ten years), is a workforce problem, says the FT story. There is a problem finding workers to work the country’s expanding factories that are pushing out over a million vehicles a year. And, there’s a new Jaguar Land Rover plant on the way that will add another 150,000 vehicles per year, when it’s up to speed, and is looking to double that in its second phase.

“We make 105 cars per 1,000 people; that’s the highest in the world,” Wilfried Serles, head of the Slovakia branch of Grant Thornton consultancy, told the FT. “Slovakia is now benchmarked against every other country.”

Jaguar Land Rover hopes to add 2,800 jobs to produce its Discovery SUV, while industry analysts say Volkswagen will probably have to add 1,500 and Groupe PSA another 1,200. And the FT adds that there is also the need of suppliers (such as JLR’s aluminum body-panel supplier Gestamp) relocating in the region and adding thousands to the job roll.

That may lead to either an increase in immigration or relocation of the current Slovakian population. The plants are all located in the western part of the country, around Bratislava, where already there are few people looking for work. However, points out the Financial Times, the other side of the country is currently experiencing 20% unemployment.

Still there is no shortage of job seekers, says the business publication, with JLR’s call to action resulting in some 40,000 applicants. However, many of those are reportedly working at other manufacturers’ plants, meaning the positions wouldn’t mean hiring more people, but rather moving workers around.

That may also mean an increase in automation at the plants, which are already heavily automated to ensure the quality control desired by the companies. Kia’s plant, for example, the only engine-maker in the country, is almost completely automated, as is its production facility’s body shop.

But that may be a selling point to young workers who shy away from heavy industry, says the FT, because young workers become more interested when they find out that much of the work is now controlled by a tablet, not by fork-lifts and paint sprayers in gas-masks.