Škoda Works
Much of the product of Austro-Hungarian loom, work bench and forge was quite artistic and charming; that there often was displayed fine taste and originality of conception. Many of the manufactures — such as glassware, china and tableware, leather goods, furniture and articles of domestic decoration, as well as the cloths of Bohemia, etc. — bore a stamp of their own and were appreciated by the connoisseur. But admitting all that, the fact was still true that the whole methods in vogue in its industry were antiquated and did not admit of those processes of standardising and of rendering the volume of output so large and at the same time the selling prices so cheap as to readily admit of competing with more wide-awake nations.
The air of Austria or Hungary was not conducive to the growth of the modern captains of industry that elsewhere had left their mark. And the trend of those elements in both halves of the monarchy that have capital to spare was not, on the whole, in the direction of industrial investments. The Skoda Works was one of the very few exceptions. Czech financiers played a significant role in the development of heavy industry. Emil Skoda (1839—1900) became the major arms producer in the Habsburg Empire. Czechs like Emil Skoda and Tomas Bata [the shoemaker] became symbols of the new Czech capitalists.
The fortunes of the Škoda Works were interwoven with those of Plzen through several generations of employees. The Skoda factories were founded by Count Wallenstain in 1859. Count Wallenstein-Vartenberk set up a branch of his foundry and engineering works in Plzen. The output of the plant, employing over a hundred workers, included machinery and equipment for sugar mills, breweries, mines, steam engines, boilers, iron bridge structures, and railway facilities. Ten years later it was taken over by Emil Skoda, a Czech engineer, who employed 130 people. Emil Skoda purchased the factory from Count Waldstein in 1869 for 167000 gulden with money borrowed from his physician uncle in Vienna, Josef Skoda the great Viennese clinician. Skoda had originally been employed in the iron works of Wallentein (Valdstejn) in Pilsen.
When engineer Emil Škoda purchased a small engineering works located in the centre of Plzen, then a town with a population of 30,000, he set out on a path leading to the major development of his plant and fame for Plzen around the world. The coalfields at nearby Nýrany and local iron-ore deposits gave rise in the 19th century to Plzen's engineering industry, symbolized by the Škoda Works, which occupy most of the city's western sector. Škoda was quick to expand business, and in the 1880s founded what was then a very modern steelworks capable of delivering castings weighing dozens of tons. Steel castings and, later, forgings for larger passenger liners and warships went on to rank alongside the sugar mills as the top export branches of Škoda's factory.
Initially Emil von Skoda held a majority of shares, but the Creditanstalt soon acquired a controlling interest. The Skoda firm became a joint-stock company in 1899 to raise capital for expansion. It was founded in 1899 by the Creditanstalt and the Czech Escomptebank to acquire the existing Company E. Skoda Pilsen, including land, equipment and railway equipment. For decades the company's workshops produced steam machines, equipment for sugar factories, breweries and power stations, machine tools, engines and large forgings applied in the construction of ships. For many armies, the Škoda Works were for years one of the largest suppliers of weapons in Europe.
The Skoda Works were part of the Creditanstalt group and most of the manufacture of artillery was concentrated there. The Skoda works (directed by Emil and Karl Skoda) had become the Monarchy's major producer of machinery and armaments by the 1900s. Škoda Works became the largest arms manufacturer in Austria-Hungary. It was a navy and army contractor, mainly supplying heavy guns and ammunition. Exports included castings, such as part of the piping for the Niagara Falls Power Plant or for the Suez Canal sluices, as well as machinery for sugar mills in Turkey, breweries throughout Europe, and guns for the Far East and South America.
By 1914 Skoda was one of Europe's major arms producers. At the Skoda Works in Pilsen everything was done on an enormous scale — grounds covered, trip hammers of a hundred tons apiece, 30,000 men toiling and sweating for good pay; and capital galore. And enormous profits; during the Great War one of the Krupps became a partner. A Czech, Baron Skoda, was the brain of the concern, and a number of able German engineers were the sub-brains.
The First World War brought a drop in the output of peacetime products. Huge sums were invested into expanding production capacities. By this time, Škoda Works already held a majorities in a number of companies in the Czech Lands and abroad that were not involved in arms manufacture. In 1917, the company had 35,000 employees in Plzen alone.
The Skoda gun, the Austrian 30.5 centimetre (12-inch) howitzer, manufactured at the Skoda Works near Pilsen, was not a surprise: it was tested in the presence of foreign military attaches in 1912. During the Great War some officers in the German ordnance department considered the big guns turned out by the Skoda works in Austria superior to those of Krupp. Just before the War the Skoda plant completed its triumph — the 30.5 c.m. howitzers drawn by traction engines. "See," the objectors claimed. " Skoda is better than Krupp." "Wait," said Bertha Krupp." These Skoda guns, while the biggest movable guns in the world today, are not big enough." And she produced for Germany the famous 42 c.m. howitzers, whose shells were nicknamed "Busy Berthas." These formidable 42-centimetre howitzers laid Liege and Antwerp low.
The Archduke Leopold Salvator was for a number of years before the war, and during the War, the very important post of inspector of the entire artillery for the Austro-Hungarian army and navy. In that capacity he strove hard to obtain from the two parliaments grants sufficient and in time to construct those heavy ordnance which all military experts had predicted would be indispensably needed in the next great war. His efforts proved in vain; at least the appropriations were made too late and in amount quite insufficient. Archduke Leopold Salvator, though personally strongly averse to war, had all along been convinced that such a great war, with all Europe for long resembling a powder magazine, was bound to come.
On an understanding with the aged emperor, but unknown to either the Hungarian or Austrian parliament (except a few members in his confidence), the archduke managed to have those much-needed heavy guns made, mostly at the Skoda Works in Pilsen; to have them tested thoroughly and installed in the army. These were the marvellous 30.5 centimetre howitzers and the 42-centimetre mortars that played such a decisive part in the early days of the war. They had been designed, made and tested wholly without the connivance, even the knowledge, of the German general staff. Liege, it may be recalled, fell before these guns, and the quick capture of Antwerp was also largely due to them.
Soon after war was declared the Skoda works in Austria, practically the equal to Creusot in artillery technique, sent a battery of 30.2-centimeter howitzers to be tried out in comparison with the 21-centimetre field and the 28-centimetre siege howitzers of Krupp make. These are the three types of pieces that finally reduced the chain of forts defending Liege and Namur to fragments, but as the maximum calibre was held by the Skoda guns some observers got the notion into their heads that Austria furnished the big guns and not Prussia. It was not until the army of General von Kluck crossed the Meuse and the bombarding of Fort Maubeuge began that the "Brummers," the 42-centimeter Krupp automobile mortars, were allowed to decide the issue, hence the confusion in terms and calibre by "veteran" war correspondents.
Following the emergence of the Czecho-Slovak Republic in 1918, in the complex economic conditions of post-war Europe the company was transformed from what was exclusively an arms manufacturer into a multi-sector concern. In addition to traditional branches, the production programme embraced a number of new concepts, such as steam (and later electric) locomotives, freight and passenger vehicles, aircraft, ships, machine tools, steam turbines, power-engineering equipment, etc.
In May, 1919, a commission of Ordnance officers was sent to the Skoda Works in Austria for the purpose of investigating their methods of constructing large and small ordnance. While there they secured additional data from the chief engineer of the plant with reference to the design of the gun, and saw the three guns which had been in process of construction on November 11, 1918.
Its trademark - a winged arrow enclosed with a circle, devised in the 1920s, has been a guarantee of top technical standards and product quality, the dimensions and quantities of which and the purposes for which they were produced Emil Škoda would have never dreamed of. Over the years, the lives of hundreds of thousands of the inhabitants of Plzen and the surrounding area have been linked to the plant in times of both peace and war.
At the beginning of December 1895 the mechanic Václav Laurin and the book-seller Václav Klement, both bicykle enthusiasts, hd started manufacturing bycycles of their own design, patriotically named Slavia in the nationalist atmosphere of the ond of the 19th century. A few years later, in 1899, the Laurin & Klement Co. began producing motorcycles, wich were soon succesful and gained several racing victories. After initial experiments at the turn of century, producing of motorcycles was gradually replaced by automobiles form 1905 onward.
Like the motor cycles, the first Laurin & Klement automobile, the Voiturette A, was a full success, later becoming the archetype of Czech automobile classic. It soon formed a stable position for Company in the developing international automobile market, so that the Company could soon start operating on a wide scale. The volume of the production increased and soon exceeded the potential of a private enterprise, and in 1907 the founders of Laurin & Klement initiated conversion to a joint-stock company.
Škoda took part in significant companies in the cast steel, machinery and weapons production, since 1924 automobiles. First, a Hispano-Suiza "designed by Marc Birkigt, was copied under license. In 1925, fusion with the Pilsen Škoda Co. was accomplished, marking the end of the Laurin & Klement trademark. In early 1930s, the automotive business was again organized as a separate joint-stock company within the Škoda Group (Automobile Industry Co., ASAP). After the crisis, the Company achieved a break-through with the Type Škoda Popular.
The deteriorating political situation in Europe saw arms production rise again in the mid-thirties.
By the Munich Agreement signed in September 1938 by Great Britain, France, and Germany, Czechoslovakia, under President Eduard Benes, agreed to cede the Sudetenland to Germany. By the end of the year the Sudetenland was incorporated into the Reich, the district of Teschen was seized by Poland, portions of southern Slovakia was acquired by Hungary, and the rest of Slovakia became a vassal state of Germany. Hitler’s quick absorption of the whole of Czechoslovakia included the famous Skoda ironworks, and he subsequently used the conquered nation as a Nazi arsenal.
The Reichswerke Hermann Goering acquired a significant hold on the Czech economy, acquiring coal and steel mills, as well as two of the top three iron works and three large Czech armaments concerns, including the Skoda Works. Reich Works Hermann Goering acquired large possession of shares in the Skoda Works, in order to use the latter as a finishing industry for the products of their own rolling mills and steel works, just as they used other industries in Germany. At that time the Skoda Works was one of the largest armaments complexes in Europe. The production volume of Skoda Works between August 1938 and September 1939 alone was nearly equal to that of all British arsenal factories in that period. The adverse loss of Skoda Works to Germany drastically increased Hitler's military power.
In a conference between Goering, Mussolini, and Ciano on 15 April 1939, one month after the conquest of Czechoslovakia, Goering told his junior partners in the Axis of the progress of German preparations for war. He compared the strength of Germany with the strength of England and France. He mentioned the German occupation of Czechoslovakia in these words: "However, the heavy armament of Czechoslovakia shows, in any case, how dangerous this country could have been, even after Munich, in the event of a serious conflict. Because of Germany's action the situation of both Axis countries was ameliorated, among other reasons because of the economic possibilities which result from the transfer to Germany of the great production capacity (armament potential) of Czechoslovakia. That contributes toward a considerable strengthening of the axis against the Western powers."
The Skoda Works led a charmed life until the end of World War II. On the night of 16 April 1943, Bomber Harris sent out more than 300 Lancasters to make the long flight to Pilsen, Czechoslovakia, where they would bomb the Skoda Works. Since the target was far beyond the range of Oboe, the attack used H2S. The H2S operators mistook the town of Dobrany for Pilsen (a 12-mile error) and a large mental hospital for the Skoda Works. Two hundred eighty-five bombers proceeded to deluge the area with 691 tons of bombs — a nightmarish absurdity that even Franz Kafka would have found difficult to express. The attacking force suffered grievously too. It lost 36 aircraft, more than 12 percent of the attacking force.
At the end of May 1943, in the remaining large raid of the month, Harris tried again for Pilsen. This time 150 bombers correctly identified the target, but landed almost all their bombs in a field outside the plant. The Fifteenth air Force raided Czechoslovakia in the middle of October 1944, striking at the Brux synthetic oil plant (416 tons), the Skoda Works at Pilsen (307 tons), and miscellaneous rail yards. On 25 April 1945 the Eighth Air Force launched the last heavy bomber combat mission in the European Theater, destroying 75% of the Skoda Armaments at Pilsen, Czechoslovakia.
World War II brought the plant to the verge of destruction, but its employees, whether those from the production workshops, construction studios or laboratories, worked with dedication to achieve its revival, modernization and expansion so that it could contribute not only to the development of the town of Plzen and the Czech Republic, but also that of neighbouring as well as remote countries.
In 1945, the company was nationalized. Škoda Works was gradually split up into different sections (e.g. the car works in Mladá Boleslav, the aircraft plant in Prague, factories in Slovakia, and other plants producing food-industry equipment). The company's main task now was to produce equipment for heavy engineering, capital construction in the industrial sector, public transportation, and power engineering. Most exports were headed towards the Eastern Bloc.
Severely damaged in World War II, the Pilsen factories were rebuilt and restored to production, renamed the V.I. Lenin Works. Best known for munitions, the Škoda Works also manufactured heavy machinery of various types, military aircraft, railway locomotives, and cars. Škoda pioneered the development of electric-railway locomotives, with plastic body panels to reduce axle loadings.
The transfer of arms from an industrialized nation to a third World country is a common feature of international foreign relations. The first such transfer of notable scale occurred in 1955 when the Soviet Union began shipping large quanities of modern arms to Egypt. This transfer, known as the Czech arms deal, is widely recognized to have been a turning point in the relative influence of the Soviet Union and the United States in the Middle East. Nevertheless, the specific details of the deal itself and of the events and decisions associated with this precedent setting incident are not well known or understood.
By the 1960s Skoda was largely engaged in civil, not military, activities. Based on the traditional production processes and past success, the Czechoslovak economy managed to maintain a relatively good standard in the post/socialist period for several decades, in spite of the changes brought about by planned economy and efforts at unduly rapid growth. This standard only became questionable towards the end of the nineteen sixties due to development of new technology in the western world. The permanent stagnation of the economy started after the seventies, also affecting the Mladá Boleslav automobile manufacturer in spite of the company’s leading position in the East Europe marker. Production grew again only when the model range Škoda Favorit went into production in 1987.
Following the change in political climate in 1989, ŠKODA started along the path of privatization, and used this time to come up with an optimal production programme, make new business contacts, and look for markets other than those that had so far been its priority (and only) markets, i.e. the Comecon countries and the Soviet Union, which collapsed after 1989.
After the political changes of 1989, under the new market economy conditions the Government of the Czechoslovak Republic and the management of Škoda began to search for a strong foreign partner whose experience and investments would be capable of securing long-range international competitiveness of the company. In December 1990, the Government decided on cooperation with the German Volkswagen Group. The Škoda – Volkswagen joint venture began to operate on 16 April 1991 under the name Škoda, automobilová a.s., becoming the fourth brand of the Volkswagen Group alongside VW, AUDI a SEAT.
In 1992, the company was privatized by the so-called Czech method. It began expanding its production activities (e.g. by acquiring the TATRA and LIAZ vehicle works and constructing a plant to produce aluminium drinks cans). This expansion put the company's financial stability in jeopardy. In 1999, it concluded a standstill agreement with its main creditor banks, and restructuring of the entire capital structure of the Škoda group was launched. The result was legal and financial stability at the company.
Trading companies in the defense industry are required to have licenses. In 1995, four firms, Aero Vodochody, Zenit Prague, Omnipol and Ceska Zbrojovka Uhersky Brod, were responsible for 94 percent of arms exports. Omnipol enjoyed a monopoly in the Czech arms trade from 1968 until 1989 and developed extensive international contacts during this time. In September 1996, ninety-seven firms, including engineering conglomerate Skoda Plzen, had a military arms trading license.
Škoda remains the major Czech car manufacturer, eastern Europe's oldest car manufacturer, whose main plant is located in Mladá Boleslav. Taken over in the early 1990s by the German company Volkswagen and thoroughly modernized, Škoda became the Czech Republic's biggest export earner in the early 2000s, accounting for about one-tenth of the country's overall exports. In the Czech Republic, Volkswagen transferred skills to indigenous managers following its acquisition of Skoda by having pairs of managers, one Czech and one expatriate, work together as a team and by sending its Czech managers abroad to study and work.
ŠKODA HOLDING a.s. was created on the basis of financial and organisational restructuring. It is the sort of financial holding, which financially and methodically manages its subsidiary companies. 100 percent share is owned by the international investment group - Appian Group. Together with its subsidiaries, Škoda Holding a.s. has a headcount of 4,300 employees (in connection with the sale of a new number of branches to new owners – c.f. the Appian Group and ŠKODA HOLDING introduce their development strategy – more than 4,000 erstwhile employees of Škoda Holding have transferred to new owners since 2000; conversely, new acquisitions – VÚKV, Sibelelektroprivod, and SKODA Vagonka – have brought in 1400 more people). The partnership between Skoda and Westinghouse had been working since 1990, and resulted in the successful completion of the Temelin Nuclear Power Plant units in the Czech Republic. Fuel for the Temelin plant is being supplied by Westinghouse as part of the plant's upgrading and completion. The fuel was manufactured in the United States, with the Czech Republic's Skoda Plzen participating in fuel testing and development. The first of 60 CASTOR casks designed by Germany's Gesellschaft für Nuklear Behälter and manufactured by Skoda Plzen were delivered to the plant in January 1996. Skoda expected to be able to manufacture 20 casks annually. Skoda Plzen, which made heavy component sets for VVER reactors, obtained American Society of Mechanical Engineers (ASME) certification.
In the Czech Republic, conversion - exchange of HEU for LEU - was done in 2 research reactors by 1998. These are the LVR-15 research reactor (power up to 10 -15 MW, burning IRT - 2M type fuel from Russia), operated by the Nuclear Research Institute in Rez near Prague and the VR- I training reactor (power up to 5kW, IRT-3M type fuel ), operated by the Faculty of Nuclear Sciences and Physical Engineering, Czech Technical University in Prague. Both reactors have a number of common design features, e. g. stainless steel reactor vessels (made by SKODA Nuclear Machinery, Co.), core support plate, control rods etc.
A region known for Skoda cars, Zetor tractors, and Tatra trucks, by 2005 the Czech Republic had become the major car manufacturer in the Central/Eastern European region. With new auto investments in neighboring Slovakia, Hungary and Poland, this region was fast becoming the Detroit of Europe. Once there was only one dominant car manufacturer in the Czech Republic: SKODA AUTO, a member of Volkswagen Group, with production of 410,000 cars in 2003. A major investment of TPCA of CZK 50 billion ($ 2.17 billion) in the City of Kolin and a following inflow of its suppliers – dramatically increased the importance of the Czech automotive industry. In 2005, the new manufacturing facility of Toyota- Peugeot-Citroen (TPCA) started production with capacity approximately 300,000 vehicles per year.
The present plant and its employees continue in the footsteps of their predecessors - albeit in entirely different conditions - carrying on the traditional production programmes and introducing others corresponding to the requirements set for companies intending to earn for themselves a leading place in international technical and economic competition.
