Skoda goes to China

"What's bad for Škoda Auto is bad for the CR," is one way to turn around a decades-old expression about General Motors. Despite inflation of only about 2%, Škoda was forced to agree last week to a 7% pay hike for its workers. Škoda sent a thinly veiled warning a few days later: Assembly of Octavias will begin in China late next year. This will initially mean more work for its Czech factories, but in the mid-term it will give Škoda more leverage against excessive wage inflation in the CR. The idea of Octavias made in China and imported back to the CR might not be so far-fetched in a few years. We made fun in Dec. of the sudden Germanization of "Schoda Autowerke," but perhaps it's starting to make sense. It'd be easier for the German CEO of a German car company to move production to China than it would be for the Czech CEO of a "Czech" [Czech Republic manufacturing production CPI Germany]