Škoda Works

Škoda, a.s.
Private
Industry Conglomerates
Fate divided
Successor
Founded Plzeň, Kingdom of Bohemia, Austrian Empire (1859 (1859))
Founder Emil Škoda
Defunct 1999 (1999)
Headquarters Plzeň, Czech Republic
Area served
 Worldwide
Products
  • locomotives
  • aircraft
  • ships
  • machine tools
  • steam turbines
  • guns
  • trolleybuses and trams

The Škoda Works (Czech: Škodovy závody) was one of the largest European industrial conglomerates of the 20th century, founded by Czech engineer Emil Škoda in 1859 in Plzeň, then in the Kingdom of Bohemia, Austrian Empire. It is the predecessor of today's Škoda Auto and Škoda Transportation companies.

History

1859–99: establishment of Škoda

The noble Waldstein family founded the company in 1859 in Plzeň; Emil Škoda bought it in 1869. It soon established itself as Austria-Hungary's leading arms manufacturer producing heavy guns for the navy, mountain guns or mortars along with the Škoda M1909 machine gun as one of its noted products. Besides producing arms for the Austro-Hungarian military, Škoda also manufactured locomotives, aircraft, ships, machine tools, steam turbines and equipment for power utilities and still does so.

In 1859, Count Wallenstein-Vartenberk set up a branch of his foundry and engineering works in Plzeň. 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. In 1869, the plant was taken over by Emil Škoda, an industrious engineer and dynamic entrepreneur.

Škoda soon expanded the firm, 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.

1899–1945: before and during World War II

Škoda 75 mm Model 15
Panzer 35(t) tank
Škoda supplied all the artillery weaponry for Dreadnoughts of Austro-Hungarian Navy class Tegetthoff

In 1899, the ever expanding business was transformed into a joint-stock company, and before the First World War 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.

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 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, 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 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-thirties.

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). These tanks were originally produced for the Czechoslovak army and were used extensively by the Wehrmacht in the Polish campaign, the Battle of France, and the German invasion of the Soviet Union. In July 1944 Skoda 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 the entire Czechoslovak economy came under government control.

Mountain guns produced by Škoda: Other weapons produced by Škoda:

1945–89: after World War II

ES499.1 locomotive
Škoda 14 Tr trolley bus in Vilnius

After World War II, in 1945 (the year when nationalisation efforts began in Czechoslovakia Škoda was nationalized and many sections were split from the company (e.g. the car works in Mladá Boleslav (Škoda Auto), the aircraft plant in Prague, some factories in Slovakia, and other plants producing food-industry equipment).

The company was renamed Závody Vladimíra Iljiče Lenina (Vladimir Ilyich Lenin Plants) in 1953, but since the new name caused losses of sales abroad, the name was changed back to Škoda in 1965.[1]

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 USSR and other countries as a trolley bus manufacturer, beginning 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 the 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 privatization, and used this time to come up with an optimal production programme, making new business contacts, and looking for markets other than those that had so far been its priority markets, i.e. the Communist Bloc countries and the Soviet Union, which collapsed after 1989.

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 privatized 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. This expansion put the company's financial stability in jeopardy. In 1999, it concluded an agreement with creditor banks, and restructuring of the entire capital structure of the Škoda group was undertaken. The result was 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 CZK million;[2] later that year the Appian Group acquired the rest of its stake in a liquidation of the previous owner.[3] 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.[4][5] In September 2010, a group of four managers (current or former Škoda or Appian managers) announced that they would acquire Škoda from Appian for an undisclosed price.[6][7] The Czech media speculated that the acquisition was only a formality, as the managers probably owned the parent company Appian.[7][8]

Škoda was subsequently 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 around 1 CZK billion).[9] Simultaneously some smaller transport companies were acquired, for example a 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 will acquire its power section for 11,5 CZK billion ($656 million).[9][10] Finally, in March 2011 Škoda sold its Škoda Transportation subdidiary to Cyprus-based company Skoda Industry (Europe) Ltd,[11] 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 CZK billion (app. 1.18 billion Euro/1.6 billion USD).[12]

Škoda products

Electric multiple unit ČD Class 471, commonly known as CityElefant, operated by České dráhy

Škoda Transportation produces various types of trolleybuses, tramcars, locomotives and rapid transit train systems. More can be found at: List of Škoda Transportation products.

Former subsidiaries

See also

References

  1. ↑ Úřad průmyslového vlastnictví: Výpis z rejstříku ochranných známek - spis č. 8440, zápis č. 111109
  2. ↑ Vláda schválila prodej Škody Holding americké Appian Machinery
  3. ↑ "Rozhodnutí OF/S264/02-215/03". Compet.cz. Retrieved 2013-04-07.
  4. ↑ all: Economia, a.s. "Janoušek - stopa, které se mnozí bojí". Hn.ihned.cz. Retrieved 2013-04-07.
  5. ↑ http://www.radio.cz/en/section/business/police-amass-damning-evidence-over-skoda-plzen-sale-no-prosecutions-likely-report
  6. ↑ lidovky.cz (2010-09-20). "lidovky.cz: Velké tajemství českého byznysu odhaleno: plzeňská Škoda odkryla majitele". Byznys.lidovky.cz. Retrieved 2013-04-07.
  7. 1 2 "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.
  8. ↑ "Krsek, Korecký, Čmejla a Diviš koupili firmu, která byla už dávno jejich". motejlek.com. Retrieved 2013-04-07.
  9. 1 2 "Jihokorejský Doosan smí převzít Škodu Power". Magazin.ceskenoviny.cz. 2012-10-22. Retrieved 2013-04-07.
  10. ↑ Park, Kyunghee (2009-09-14). "Doosan Buys Škoda Power, its Biggest Purchase Abroad (Update1)". Bloomberg. Retrieved 2013-04-07.
  11. ↑ E15: Skoda Industry může převzít Škodu Transportation
  12. ↑ "Ze Škody odteklo 32 miliard. Neznámo kam". Lidové noviny. 2 February 2012.
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