The second leg of the trip was to Prague, Czech Republic, 250 miles from Munich.
Country Manufacturing Value-Added (% of GDP) 27% (World Bank)
The Czech Republic is the longtime industrial center of the old Austro-Hungarian Empire. More than 40% of its workers are employed in industry, which is well above the EU average and the highest of any country in Europe (EuroStat, 2016). The reliance and emphasis on production can be partly credited to its historic and current proximity to markets. The Czech Republic has one of the highest economic concentrations of GDP originating from automobile design, manufacture, and supply-chain in the world (Czech Invest, 2016). A total of 54.2% of all exports are products related to the automotive industry (CZ, 2016). In fact, the country supplies parts to every automobile manufacturer in Europe (Czech Ministry of Trade, 2016). There are numerous automobile R&D and production centers in the Czech Republic, including Volkswagen (the owner of the Škoda automobile factory), Toyota, and Hyundai. The automobile industry is credited with giving the country a high per-capita income as compared to its European peers.
1) Multinational Automobile and Supply Chain Tours:
The economic rise of the Czech Republic has been led by the automobile industry. We had the opportunity to tour the massive Škoda Auto factory. Škoda began in 1895 as a pressing plant that manufactured bicycles, and ten years later it began producing motorcycles.
Since 2000, Škoda has been a wholly owned subsidiary of Volkswagen. Škoda cars are sold in 102 countries (under the Volkswagen name in America). More than 1.1 million cars are sold worldwide, including daily production of 2,500 at the factory we toured. During the German occupation, the factory was utilized for production of German military vehicles under the German automaker Ferdinand Porsche. The factory was bombed in May 1945 by Allied air raids.
The company has gone through many successful eras, and students had the opportunity to inspect the engines of the 2018 models.
Like many Czech industries, Škoda went through massive management changes after the Velvet Revolution and the influx of privatization brought upon by the fall of communism. During this phase, Volkswagen beat out French automaker Renault to win equity rights in Škoda. The company also produces in India and was voted the most dependable car brand in the UK in 2015. Currently, China is the #1 export market for Škoda. 60% of their products are transported via trains, and 40% via trucks.
The factory tour allowed us a better understanding of their modern production process, particularly the design and production of their new 7-speed automatic-transmissions. We had the opportunity to observe the press shop, the welding shop, and the final assembly hall. We saw the 2,000 pound pressing power machines, which cost €55 million each. We also got to see the 250 kilograms of excess metal waste for each vehicle, which gets recycled. We learned about the welding process, which is completed at 950 degree temperatures, and is cooled within 5 seconds in order for the metal to harden appropriately. 85% of the welding process is automated, using 620 robots and 260 workers per shift. Like the BMW factory, no photos were allowed during the tour.
Škoda employs 21,000 workers at the factory, with an average age of 33. Employees wear shirts based on their titles to better coordinate operations: green shirts are worn by managers, white shirts are worn by workers, and blue shirts are worn by temporary workers. The factory utilizes constant production, with an overlap of 15 minutes in-between shifts. Škoda had the best first quarter in sales in company history in 2017, making €84.3 billion by selling more than 283,000 vehicles, an increase of 28% from the prior year, and was awarded the prestigious “Exporter of the Year” award in both 2015 and 2016 from the Czech Republic’s Economic Chamber. Škoda Auto University nearby is the only company-owned University in the country and offers bachelors and masters degrees in logistics programs.
A Toyota production facility employing 3,000 workers is located right outside of Prague, and production exceeds 300,000 automobiles annually. This factory touts its environmentally-friendly vehicles and has been certified as ISO 14001:2004. The company specializes in small vehicles and claims “modern safety and ecological technologies” as core production features.
Citizens weren’t allowed to buy automobiles from Western Germany during the communist era in Czechoslovakia, so no BMW or Mercedes-Benz were driven since they were manufactured there. The car pictured below is called a Trabant. It was produced in Eastern Germany and made of cheap plastic material. They have been obsolete for awhile now; the one pictured below was just a novelty car used for advertising.
Europeans know how to be mobile, and we jumped into this cultural phenomenon and learned about the logistics of getting from place to place. Experiential learning is the best way to acquire knowledge, and we did just that as we maneuvered through train stations, trams, and buses. Some of us were seated on the train leaving Prague next to a couple with a dog (seen in the picture in the bottom left below). The train attendant informed them that they needed a €1 ticket for the dog.
2) Cultural Excursions and Immersions:
There is a venue in Prague containing the Munich Agreement document, a contract stipulating that Britain and France would cede the Sudetenland of the Czech Republic. This agreement occurred with unacknowledged Czech protests and is seen as a low point in the history of the country. Prague was the last democracy to govern in Eastern Europe, but in 1948, the country became communist and found itself under the authoritarian rule of the USSR for more than 40 years. In 1968, reformists galvanized efforts to allow freedom of the press and other reforms until the USSR deployed 200,000 troops to storm the country and crush the rebellion. The Velvet Revolution was a non-violent shift to capitalism and democracy, that started as a student protest in November 1989 on International Students’ Day, leading to a non-violent era of political upheaval which ultimately led to the first elections since 1946 in June 1990, that overturned the one-party communist system. Students have taken an active role in shaping Prague. Since Charles University in Prague is a public higher education institution, it is free for all Czechs.
St. Wenceslas Square, the historic center of Prague and a World Heritage Site, has been the epicenter of all the major political protests, speeches, and demonstrations over the years, from the Proclamation of Independence in 1918 to events in the German occupation, to communism, and now capitalism. We spent quite a bit of social time there. It was first established in 1348 as a horse market.
St. Wenceslas Square also includes the famous Charles Bridge, first constructed in 1357 during the reign of King Charles IV, who also founded the first University in the city. Our tour guide (below, in green) mentioned that when she was young, there used to be thousands of statues of Lenin and Stalin throughout Czechoslovakia, including the schools. Our tour guide was expelled from law school in the 1980’s because her father was an advocate for Democratic reform.
Politických vězňů (Political Prisoners’ Street) commemorates the brave citizens who were imprisoned for their political beliefs, in most cases under communist rule (below). Political Prisoners’ Street (below) served as the Prague Gestapo (German) headquarters during World War II, and many local Czech citizens were held here and interrogated. Anyone speaking out or leading a campaign could be labeled as an enemy of the state.
The New Town area of Prague, first built up in 1348, is also home to the Museum of Communism, which provides an overview of the recent history of political freedoms in the Czech Republic. The current freedoms enjoyed by the citizens have been hard fought, which we saw via documentary video, and have resulted in the capitalistic prosperity that the citizens now enjoy. Ironically, the museum is currently located next door to a McDonalds, which to many symbolizes global capitalism, as depicted in the picture below on the right.
Operation Anthropoid was a Czech code name for a plot to assassinate key leaders of the Nazi occupiers in Prague in May 1942, in conjunction with British special operations and the Czech government in exile. The Czechs successfully killed a major Nazi leader, which drew forceful German retaliation, including the killing of 5,000 Czech political leaders. 750 German troops pursued the leaders of Operation Anthropoid to St. Cyril Church where they had been secretly taking refuge. After two hours of gunfire, the plotters committed suicide. The photo below shows flowers and wreaths that are laid at the battle scene in commemoration of these brave Czechs today.
Czechs enjoy their sports, and oftentimes sports is shown on televisions at hotels and local establishments. The International Ice Hockey Federation’s playoffs were being played during our stay, which garnered much local attention because the Czech Republic team made the semifinals. The NBA playoffs were in the conference finals during the trip, but I didn’t notice any games or highlights being played. No hint of baseball either.
3) History of Capitalism/Trade:
The Czech Republic was one of the most affluent countries in Europe until communist rule took over. Since the Velvet Revolution, the Czech Republic has dived into capitalism and international trade. Today, the country boasts one of the fastest-growing economies in the EU. After joining the EU in 2004, its global competitiveness has made it the heart of many European global networks. The economy grew from less than $50 billion GDP in 1989 to over $200 billion today. The Czech Republic’s first modern democratic/capitalist leader, Václav Havel, is credited with redirecting its economy after playing a key role in the Velvet Revolution.
The Havel Market, in Old Town (seen below), has been a public market since 1232, when it was first established as a medieval settlement for trading food. We had the opportunity to stroll through Old Town, which still operates as a food market.
The Communism and Nuclear Bunker Tour of Prague and the Museum of Communism are both relevant examples of how the limitations and suppression of the old communist regime set back the production capabilities of the country for much of the twenty-first century. While the country was the center of production for the Austro-Hungarian Empire, the advent of communism thwarted much of the usual production capabilities. This tour highlights relevant communist and capitalist moments between the 1940’s and the Velvet Revolution, including information related to Soviet leader Joseph Stalin’s coordinated assassinations of capitalist leaders in Prague during the 1950’s. The bunker could hold 150 people for 2 weeks. The VIP Hotel above the bunker was for notable communist political leaders from around the region. An escape tunnel went to Wenceslas Square 15 meters away. One of the pictures below shows a map with the various nuclear bombs in Czechoslovakia pointed West, along with the points of the various Communist armies. We were allowed to play with the 1950’s-era communist spy equipment developed by Czech technology experts, wear communist military garb, and hold 1950’s-era guns.
Cooks weren’t used to using fresh ingredients in the communist days so fresh food is not common and the culture does not have a history of restaurants and eating out. Soup (polevka), beef sirloin with gravy/boiled sausage/ketchup/mustard on a roll (the Czech rohlík), and goulash/meat stew with white rice are all common. The students tended to enjoy Czech cuisine the most out of any other food.
The Czechs have been at the forefront of computer technology, even during the Communist era when the USSR commissioned the Czechs to research new developments in computerization. Famous computer pioneer, Czech Antonín Svoboda, developed and produced the SAPO computer in the late 1950s. The Czechs were the only country in Eastern Europe to utilize computers in its Universities. Technology created in Western Europe was off-limits during the communism era, and Apple products didn’t arrive in the country until 1993 (Miller, 2013). However, the love of computers skyrocketed in the years following. In tribute to the love of computers, Apple decided to locate its museum in the heart of Old Town. The museum is the only one of its kind, and displays almost every Apple products ever made, and is a tribute to late Apple founder Steve Jobs.