How Škoda got into the Volkswagen Group. The contract was signed 30 years ago – ČT24 – Czech Television

The main attraction that made 22 foreign carmakers interested in the Mladá Boleslav company at the time was the Škoda Favorit. The carmaker started its production in 1988 (introduced to the public a year earlier). At the time, it was considered by many to be the best and most reliable car in communist Europe.

Financially exhausted company

However, its development significantly exhausted the carmaker financially. That is also why she was not in good condition at the turn of the 1980s and 1990s. “At the time of the privatization of Škoda, it was an obsolete and, above all, heavily indebted company,” recalled former Minister of Industry Jan Vrba. Tens of thousands of jobs are at risk.

Finally, the French Renault and the German Volkswagen advanced to the finals of the privatization competition. In the end, the Czech government’s decision was clear. Volkswagen won. Its offer was rated 40 percent better than the competitor.

Among the employees of the then car manufacturer AZNP (Automobile Works, National Enterprise), Mladá Boleslav aroused the most positive reactions. The television news of December 10, 1990 captured them as follows: “I think this is the only salvation for us,” was one of the voices. Another: “It will probably have to be technological discipline and adhere to working hours and such basic things that are common in the West.” People usually realized that they would have to work differently than in a former national enterprise.

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The carmaker (called Škoda Auto since 1997) received two years of tax holidays from the state. And Volkswagen again promised to invest nine billion in development and maintain development and production in the Czech Republic.

A minor snag was then dealt with shortly before the treaty entered into force. “However, until late last night, it was not clear whether the car agreement, signed on March 28, would enter into force,” television news reported on April 16, 1991.

The sole owner of the logo with a winged arrow was Škoda Plzeň. And the local trade unionists opposed the Mladá Boleslav carmaker receiving the brand for free. Volkswagen has threatened to withdraw from the contract if it does not receive the logo. The agreement was reached the night before the agreement entered into force.

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