The shutdown at the Škoda car plant may damage Czech economy

The planned shutdown at the Czech carmaker Škoda Auto can have serious consequences not only for the carmaker itself, but also for its suppliers, and ultimately for the entire economy. Thousands of jobs could be at risk. The economists, who were approached by the daily Právo, agreed on this. "Škoda itself represents 5% of the gross domestic product (GDP) of the entire Czech Republic and almost 10% of exports. Any shutdown of its operation has huge economic consequences. It will be difficult not only for the company, but especially for its extensive supply chain, which is in many cases highly dependent on it, "Radek Špicar, vice - president of the Czech Association of Industry and Trade of the Czech Republic, told Právo. The novinky.cz server informed about it. According to Deloitte analyst Václav Franče, every billion in the loss of sales in the automotive industry will cause a loss of sales of CZK 1.9 billion (EUR 74.7 million) and CZK 0.5 billion at the level of GDP in the entire economy. In addition, the loss of about 600 jobs. "Revenues in Škoda fell by CZK 36 billion last year as a result of the pandemic. It is difficult to quantify what this year's revenue shortfall will be due to a lack of chips. , "Franče added. "It is a blow to the entire Czech economy and an extremely unfavorable signal for the Czech automotive industry. It employs approximately 180,000 people in the country," said Trinity Bank economist Lukáš Kovanda. According to him, the situation in Škoda Auto is endangering tens of thousands of jobs. It will be important how quickly production resumes. At the same time, it is speculated in the world that the shortage of chips will persist until 2023. "Then it would not be possible to solve the situation in any other way, as well as by more extensive redundancies," Kovanda added.