Purdue Polytechnic’s Central European Multinational Automobile Organization Supply Chain Experience

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 former Austro-Hungarian Empire.  According to EuroStat (2018), “The most important sector for Czech SMEs is manufacturing, which generates almost 30% of SME value added and employment, nearly 10 percentage points more than the respective averages in the rest of the EU”.  The reliance and emphasis on production can be partly credited to the country’s 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, 2018).  AIA (2017) noted, “The Czech automotive industry employs more than 150,000 people and accounts for more than 20% of both Czech manufacturing output and Czech exports.”  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.

Most Czechs over 40 years old do not speak English because the Russians closed off their society from the West, behind the Iron Curtain.  Even today, they prefer to be referred to as “Central Europeans” rather than “Eastern Europeans”.  However, those under 40 generally speak English and enjoy chatting with Americans and discussing American culture.  Truly, Czech culture is shaped by their turbulent political history.

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Václav Havel, Czech dissident turned national hero and then president, was both the last president of Czechoslovakia as well as the first president of the Czech Republic.  He symbolized the citizen struggle that toppled communism, and he provided economic opportunity to the Czechs.  Here, he is speaking to a joint session of US Congress in Washington, DC in 1990.  Seated behind him (clapping) is former VP and Indiana Senator Dan Quayle.

 

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.  Ten years later, it began producing motorcycles.

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Škoda founders Václav Laurin and Václav Klement outside the factory

 

Since 2000, Škoda has been a wholly owned subsidiary of Volkswagen.  More than 1.1 million Škoda cars are sold in 102 countries (under the Volkswagen name in America) worldwide each year, 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.  Like many Czech industries, Škoda went through massive management changes after the Velvet Revolution and the influx of privatization brought on 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.

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One of many Škoda logistics trucks (from scania.com)

 

The factory tour provided an enhanced understanding of their modern production process, particularly the design and production of their new 7-speed automatic transmissions.  Students had the opportunity to observe the press shop, the welding shop, and the final assembly hall and saw the 2,000 pound pressing power machines, which cost €55 million each.  The group also got to see the 250 kilograms of excess metal waste for each vehicle, which is eventually recycled and learned about the welding process, which is completed at 950-degree temperatures, and 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.  As in the BMW factory, no photos were allowed during the tour.

 

Škoda employs 21,000 workers at the factory; their average age is 33.  Employees wear shirts based on their titles to better coordinate operations: green shirts are worn by managers, white shirts by workers, and blue shirts 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.  Nearby Škoda Auto University is the only company-owned University in the country and offers bachelors and masters degrees in logistics programs.  Škoda continues to innovate today, as they have developed various incarnations of electric bicycles.

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.

Europeans know how to be mobile, and we again 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 (see below).  Perhaps the proudest moment (from the perspective of the trip leader) occurred when one student (who had never traveled to a great extent), whose parents were concerned about her registering for the trip because they feared that she would get lost while abroad, ended up helping the group navigate from place to place and ultimately became more savvy about the routes than anyone, including the faculty.

 

One morning we visited the campus of Purdue partner institution Czech Technical University.  We had the opportunity to learn from demonstrations by Dr. Pavel Burget, Head of the Czech Technical University’s Industrial Automation Group and learned about their robotics initiatives and their collaborations with multinational organizations such as Škoda.  The group enjoyed the descriptions of their robotics labs by members of the university’s student international club.  

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Purdue University students at Czech Technical University

 

While on campus, we visited the National Library of Technology, where the students go  study and research, and we listened to a lecture about the integration of technology into the curriculum (see below).  We noticed that again, students drank alcohol freely in the library.

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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, reformers 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.  The first elections since 1946 were held in June 1990 and 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, was first established in 1348 as a horse market.  It 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.

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St. Wenceslas Statue at the Historic St. Wenceslas Square

 

St. Wenceslas Square also includes the famous Charles Bridge, first constructed in 1357 during the reign of King Charles IV, who founded the first University in the city.

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Students at the Charles Bridge

 

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 and interrogated there.  Anyone speaking out or leading a campaign could be labeled as an enemy of the state.

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Political Prisoners’ Street

 

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 fiercely fought for, as we saw in a documentary video, and have resulted in the capitalistic prosperity that the citizens now enjoy as seen in the pictures with students below.

 

Czechs enjoy their sports, and sports are shown on televisions at hotels but not at local establishments like in the US.  The NBA playoffs were in the conference semi-finals during the trip, but none of us noticed any games or highlights being played.  There was no hint of baseball either.  Popular sports in the Czech Republic include soccer, ice hockey, and tennis.  In particular, ice hockey games were broadcast prominently during our time there.  The International Ice Hockey Federation’s playoffs, which garnered much local attention because the Czech Republic team made the semifinals, took place during our stay.  We were lucky to be in Prague during the USA vs. Czech Republic quarterfinal hockey game of the 2018 International Ice Hockey Federation Men’s World Championship (below, right).  Some members of the US Embassy were watching the game during our visit.  The USA team won 3-2, but we saw them lose in the semifinals to Sweden a few days later.  Škoda was the official main sponsor of the tournament.  Their logo can be seen at center ice (below, center) and on the hockey helmet of the Czech player (below, left).  In a company press release, Škoda stated “Ice hockey may be considered one of the Czech national sports and thus it’s only logical that Škoda Auto, as a Czech company, supports it with great devotion” (Škoda-auto.com, 2018).

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The U.S. Embassy in Prague was established with the appointment of the first Ambassador, Richard Crane from Chicago, Illinois, in 1918.  This year, the US and the Czech Republic are celebrating 100 years of official diplomatic relations.  The U.S. Embassy in Prague is housed in the Schoenborn Palace, built in 1643 on the site of a symbolic house destroyed during the Thirty Years War, when Swedish forces invaded Prague.  We had the opportunity to tour the American Center at the Embassy and learn more about the role of US diplomats living in the Czech Republic.

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A Sgt. Pepper-esque photo with not only real people but cardboard cutouts in the background.

 

 

 

 

 

 

 

 

 

 

 

 

The U.S. Embassy sponsors services for education, innovation, and manufacturing as they relate to promoting American interests in Bohemia.  Recently, Ambassador Stephen King was a key panel member at a press conference regarding the collaboration of American multinational organization General Electric Aviation and the Czech Technical University in Prague (Cz.usembassy.gov).  The collaboration is expected to bring more than 500 jobs into Prague, as well as offer new degrees in aviation at Czech Tech.  Below are pictures (left to right) of security inspecting a vehicle, students outside the embassy, and an opening welcome powerpoint slide.

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Our US Military Veterans were especially proud during the visit to the Embassy

 

Our hotel was attached to the professional soccer team SK Slavia Prague’s stadium in the Czech First League and coincidentally, team members were watching the Royal Wedding a few hours before their match.  One table of players was nice enough to take a picture with one student (Abbie).  The Royal Wedding can be seen on the television in the background (below, right).

 

A home soccer match was played on our last night, and a student-led excursion (Shelby) allowed us to easily watch the match.  We observed the typical European soccer chanting during the entire match.  Pictures included below are (left to right) the match day apparel store, game day action, a view of our seats, and the view from a student’s hotel room after the match.

 

Another student-led excursion included the 9th-century Prague Castle, the largest ancient castle in the world, seat of the former kings of Bohemia (see picture below).

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One of the most popular and memorable aspects of these trips is the unplanned nightlife experiences in meeting and hanging out with people from other cultures.  For instance, one evening some of the students setup a karaoke night that spawned some memorable moments, including our musical collaboration with a Norwegian group, as seen in the mutual sing-alongs and a spontaneous collaboration with a member of their group that sang with a duo from our group (below, left).

 

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.  Although the Czech Republic has made massive strides since adopting capitalism, including an astounding 4.5% annual GNP growth rate, many reminders of its Eastern European past remain, including the Czech Republic’s not yet adopting the Euro as currency.  It’s always challenging for students to adapt to the Czech Korona (crown) due to its high denominations.

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Our currency for the three days in Prague.  1000 CZK = $46

 

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.  Although the country had been the center of production for the Austro-Hungarian Empire, communist rule thwarted much of the usual production capabilities.  The Communism and Nuclear Bunker Tour, always a favorite group excursion (partly due to our humrrous and knowledgeable guide David Patak), 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 able 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.

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Students dressed as Czech soldiers aligned with the old Soviet regime

 

 

Cooks weren’t used to using fresh ingredients in the communist days, so fresh food is not common and there is not much of a culture 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.  Some students seemed to enjoy Czech cuisine more than that in Bavaria, including some of the dishes pictured below (student photos by Rubin: Bohemian Beef Goulash on the left, Czech kielbasa (sausage) on the right).

 

Of course, group dinners tend to be lively.  One night we ate dinner at an Irish restaurant at St. Wenceslas Square.  It’s mind-boggling to be at the location of so many monumental political events over the past centuries.  Central Europe and Prague have truly been the epicenter of so much world-changing political upheaval, chaos, and change (both for good and bad).

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On to Hamburg…

Comments on: "2 of 4) Prague, Czech Republic" (1)

  1. […] Tanoos, the students loved the beautiful city of Prague and thanks to his comprehensive report at his blog, today we get to share in some of that […]

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