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Škoda Works

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This article is about the former parent company. For the present-day automobile manufacturer, see Škoda Auto. For the rail vehicle manufacturer, see Škoda Transportation.
Škoda, a.s.
Company typePrivate
IndustryConglomerates
FoundedPlzeň, Kingdom of Bohemia, Austrian Empire (1859 (1859))
FounderEmil Škoda
Defunct1999 (1999)
FateDivided
Successor
Headquarters
Plzeň
,
Czech Republic
Area served
Worldwide
Products
  • Locomotives,
  • aircraft,
  • ships,
  • machine tools,
  • steam turbines,
  • guns,
  • trolleybuses and trams
ParentReichswerke AG für Waffen-und Maschinenbau Hermann Göring 

The Škoda Works (Czech: Škodovy závody, Czech pronunciation: [ˈʃkoda] ⓘ) was one of the largest European industrial conglomerates of the 20th century. In 1859, Czech engineer Emil Škoda bought a foundry and machine factory in Plzeň, Bohemia, Austria-Hungary that had been established ten years previously, founding Škoda Works. By World War I, Škoda Works had become the largest arms manufacturer in Austria-Hungary, supplying the Austro-Hungarian army with mountain guns, mortars and machine guns, including the Škoda M1909, and the ships of the Austro-Hungarian navy with heavy guns. After the end of the war and the creation of the First Czechoslovak Republic, the company, previously focused on manufacturing of armaments, diversified and became a major manufacturer of locomotives, aircraft, ships, machine tools, steam turbines, equipment for power utilities, among other industrial products.

The deteriorating political situation in Europe by the latter half of the interwar period eventually led to a renewed focus on armaments. Following Nazi Germany's 1938 occupation of Czechoslovakia, Škoda's factories started supplying the German army with Panzer 35(t) and Jagdpanzer 38 tanks, both based on earlier designs for the Czechoslovak Army. After World War II, Škoda Works was nationalized and split into several companies by the newly communist government in Czechoslovakia. Important products during the Communist era include nuclear reactors and trolley buses.

By the early 1990s, with the Communist Party no longer in power, the companies that were part of the Škoda group were privatized and eventually sold off to a number of international buyers such as German conglomerate Volkswagen and South Korean Doosan. Škoda Works is the predecessor of several modern-day companies, most notably car maker Škoda Auto, power station equipment manufacturer Doosan Škoda Power, as well as tram and train manufacturer Škoda Transportation.

History

1859–1899: establishment

In 1859, Count Ernst von Waldstein-Wartenberg of the aristocratic Waldstein and Wartenberg families set up a branch of his foundry and engineering works in Plzeň. The output of the plant, employing over 100 workers, included machinery and equipment for sugar mills, breweries, mines, steam engines, boilers, iron bridge structures, and railway facilities. In 1869, the plant was bought by engineer and entrepreneur Emil Škoda. Škoda soon expanded the firm, and in the 1880s, he 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 the factory.

1899–1945: before and during World War II

Share of the Škodawerke AG, issued 1. February 1900
Škoda 75 mm Model 15
Panzer 35(t) tank
Škoda supplied all the artillery weaponry for dreadnoughts of the Austro-Hungarian Navy Tegetthoff class

In 1899, the ever-expanding business was transformed into a joint-stock company, and before World War I, Škoda Works had become 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 and 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.

World War I brought a drop in the output of peacetime products. Huge sums were invested into expanding production capacities. By then, Škoda Works held 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 Plzeň alone.

Following the emergence of the Czechoslovak Republic in 1918, the complex economic conditions of postwar Europe caused the company to be 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 1923, the company's world-famous registered trademark, the winged arrow in a circle, was entered in the Companies Register. The deteriorating political situation in Europe saw arms production rise again in the mid-1930s.

Škoda manufactured the triple-barreled gun turrets for the Tegetthoff-class battleships of the Austro-Hungarian navy. Prior to World War II, Škoda produced LT-35 tanks, which are better known under their German designation, Panzer 35(t). They were originally produced for the Czechoslovak Army and were used extensively by the Wehrmacht in the Polish campaign, the Fall of France and the German invasion of the Soviet Union. In July 1944, Škoda started production of the Jagdpanzer 38(t).

In 1924, Škoda Works acquired the Laurin & Klement car manufacturer, later known as Škoda Auto. The companies were separated after 1945, when all of the Czechoslovak economy was nationalised.

Mountain guns produced by Škoda
Other weapons produced by Škoda

1945–1989: after World War II

ES499.1 locomotive
Škoda, Lenin Works Pilsen (People's Enterprise) in Russian Cyrillic
Škoda 14Tr trolleybus in Vilnius

In 1945, the year that nationalisation efforts began in Czechoslovakia, Škoda was nationalised, and many sections were split from the company. The car works in Mladá Boleslav became Automobilové závody, národní podnik, AZNP, today's Škoda Auto, and the aircraft plant in Prague and truck plant became part of a conglomerate of nine truck producers headquartered in Liberec as LIAZ (Liberecké automobilové závody), although the trucks were still marketed as Škodas.[1] Some factories in Slovakia were also split off, and other plants produced food-industry equipment.

The company was renamed Závody Vladimíra Iljiče Lenina (Vladimir Ilyich Lenin Works) in 1953, but since the new name caused losses of sales abroad, the name was changed back to Škoda in 1965.[2]

The factory concentrated on markets in the Soviet Union and the Eastern Bloc. The company produced a wide range of heavy machinery such as nuclear reactors and locomotives. A lack of updates to its product designs and infrastructure considerably weakened the company's competitive position and its brand.

After 1962, Škoda became well known in the Soviet Union and other countries as a trolley bus manufacturer after it began to export Škoda 9 Tr, one of its most successful models. The successor, Škoda 14 Tr, manufactured between 1982 and 1997, is still widely used, for example, in post-Soviet states.

In 1978, the company was turned into the government-owned group of companies ("koncern") Škoda. It was based in Plzeň and consisted of the companies: První brněnská strojírna (First Machine Works of Brno), ČKD Blansko, ČKD Dukla Praha-Karlín in Prague, Slovenské energetické strojárne S. M. Kirova (Slovak S. M. Kirov Energy Machine Works) in Tlmače, and Výzkumný ústav energetických zařízení (Energy Facilities Research Institute) in Brno.

1989–2011: after fall of communism

Hall of transportation section, parts of tram Škoda 14 T on left, modernized metro wagon 81-71 on right
Low floor tram Škoda 15 T in Prague

After the Communist Party lost power in late 1989, the company was privatized into the hands of management. Mismanagement and asset stripping led to a collapse. The company was restructured and some factories closed. Except for some smaller companies named Škoda and Škoda Auto, after the chaotic 1990s period, the Czech Škoda companies were again regrouped within the holding company Škoda Holding a.s. in 2000. In 2010, the holding company changed its name to Škoda Investment, a.s..

Following the change in the political climate in 1989, Škoda started along a path of privatisation and used the 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 markets, communist countries.

In 1991, a foreign partner for the passenger car works Škoda Auto a.s. was sought by the Czech government. Volkswagen was chosen, and the German firm initially took a 30% stake, rising to 100% ownership by 1999. Škoda Auto is now a completely-independent entity from other companies bearing the Škoda name.

In 1992, the company was privatised by the so-called Czech method. It began expanding its production activities, acquiring the Tatra and LIAZ vehicle works and constructing a plant to produce aluminum soft drink cans. The expansion put the company's financial stability in jeopardy. In 1999, it concluded an agreement with creditor banks, and the restructuring of the entire capital structure of the Škoda group was undertaken. The result was the legal and financial stability at the company. Currently, a sectoral restructuring of production companies in the group is under way. In April 2000, Škoda Holding a.s. took over the helm, controlling nineteen primary subsidiaries and most product lines.

In 2003, the Czech government sold its 49% stake to the Appian Group for 350 million CZK;[3] (in 2020, equivalent to 14.78 million USD) later that year the Appian Group acquired the rest of its stake in a liquidation of the previous owner.[4] The Appian Group is a holding company incorporated in the Netherlands and controlled through a screen of shell companies. The real owner or owners are unknown, despite investigations by the Czech police.[5][6] In September 2010, a group of four current or former Škoda or Appian managers announced that it would acquire Škoda from Appian for an undisclosed price.[7][8] The Czech media speculated that the acquisition was only a formality, as the managers probably owned the parent company Appian.[8][9]

Škoda was then focused solely on the transport sector. Other divisions have been sold, a large part of them to the Russian company OMZ (the price was not published, estimated at 1 billion CZK).[10] Some smaller transport companies were acquired, such as part of the Hungarian company Ganz, VÚKV (owner of the Velim railway test circuit) and some transport-related assets of the former ČKD, now called Škoda Vagonka. In 2009, Škoda holding announced that the South Korean conglomerate Doosan would acquire its power section for 11,5 billion CZK (US$656 million).[10][11] Finally, in March 2011, Škoda sold its Škoda Transportation subsidiary to Cyprus-based company Škoda Industry (Europe) Ltd,[12] later renamed CEIL (Central Europe Industries) Ltd.

As of 2012, Škoda Investment still owns the Škoda brand and some real estate but does not perform any industrial activity. Between 2007 and 2012, the company paid dividends to Appian, a sum of 32 billion CZK (1.18 billion euro or US$1.6 billion).[13]

Former subsidiaries

  • Power division sold to Doosan produces as Doosan Škoda Power (former Škoda Power) steam turbines, heat exchangers and condensers
  • Metallurgy division held by United Group produces as Pilsen Steel (former Škoda, Hutě, Plzeň) crankshafts, turbine components or ingots
  • Nuclear division sold to OMZ produces as Škoda JS equipment for nuclear plants or oil refining, petrochemical and gas industry
  • Transportation division produces as Škoda Transportation trolleybuses, tramcars, electric locomotives, electric multiple units and rapid transit train systems.
  • Škoda Praha sold to ČEZ Group is supplier of power generation projects and their technological parts.
  • Former Škoda Vyzkum research institute now operating as VZÚ Plzeň
  • TS Plzeň a.s. (former Škoda TS) is active in heavy engineering, doing curing presses, hydraulic presses, equipment for rolling-mill plants and equipment for sugar-cane refineries.
  • Brush SEM, owned by UK based FKI, manufactures generators.
  • Pilsen Tools s.r.o. and Škoda Machine Tool a.s. are active in the machine tool sector.
  • Czech Precision Forge a.s. does open- die and closed-die forging of steel and non-ferrous alloys.
  • MKV Ozubená kola s.r.o. and Wikov Gear s.r.o. produce gearboxes and gear wheels.

See also

References

  1. ^ Schauen, Till (December 2015). "Bau-genossen" [The joys of cooperative building]. Last & Kraft (in German). Vol. 24, no. 1 (December/Januar 2016). Mainz, Germany: Vereinigte Fachverlage. pp. 62–63. ISSN 1613-1606.
  2. ^ "Výpis z rejstříku ochranných známek" [Extract from the Register of Trademarks, file 8440, entry no. 111109] (in Czech). Prague, Czech Republic: Úřad průmyslového vlastnictví [Office of Industrial Property]. Archived from the original on 2014-01-07. Retrieved 2017-08-15. Archived 2014-01-07 at the Wayback Machine
  3. ^ "Vláda schválila prodej Škody Holding americké Appian Machinery".
  4. ^ "Rozhodnutí OF/S264/02-215/03". Compet.cz. Retrieved 2013-04-07.
  5. ^ all: Economia, a.s. (30 July 2009). "Janoušek - stopa, které se mnozí bojí". Hn.ihned.cz. Retrieved 2013-04-07.
  6. ^ "Police amass damning evidence over Škoda Plzeň sale, no prosecutions likely: report". Radio Prague International. 2016-03-04. Retrieved 2020-06-18.
  7. ^ lidovky.cz (2010-09-20). "lidovky.cz: Velké tajemství českého byznysu odhaleno: plzeňská Škoda odkryla majitele". Byznys.lidovky.cz. Retrieved 2013-04-07.
  8. ^ a b "ihned.cz: Plzeňskou Škodu koupili čtyři manažeři. Appian v pozadí ale dál zůstává v mlze". Ekonomika.ihned.cz. 2010-09-21. Retrieved 2013-04-07.
  9. ^ "Krsek, Korecký, Čmejla a Diviš koupili firmu, která byla už dávno jejich". motejlek.com. Retrieved 2013-04-07.
  10. ^ a b "Jihokorejský Doosan smí převzít Škodu Power". Magazin.ceskenoviny.cz. 2012-10-22. Retrieved 2013-04-07.
  11. ^ Park, Kyunghee (2009-09-14). "Doosan Buys Škoda Power, its Biggest Purchase Abroad (Update1)". Bloomberg. Retrieved 2013-04-07.
  12. ^ "E15: Skoda Industry může převzít Škodu Transportation". Archived from the original on 2013-10-16. Retrieved 2014-03-08.
  13. ^ "Ze Škody odteklo 32 miliard. Neznámo kam". Lidové noviny. 2 February 2012.

Further reading

  • Grant, Jonathan A. (2018). Between Depression and Disarmament: The International Armaments Business, 1919–1939. Cambridge: Cambridge University Press. ISBN 978-1-108-42835-4. OCLC 1010995486. Online review. Focus on munitions production in the interwar period.
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