The Hyundai project is the largest foreign green-field investment in the history of the Czech Republic. (ČTK)
Three years ago at this time of the year, farmers were harvesting violet heads of the famous Nošovice cabbage here.
But for more than a year the farmland has been covered with an asphalt parking lot, which started to fill with brand-new tri-colour Hyundai i30 cars last week. And on Monday this week, the Hyundai Motor Manufacturing Czech (HMMC) plant in Nošovice launched serial production. Cars leaving the assembly line will be available for sale now. The only thing that recalls farming is the smell coming to the industrial premises from the nearby fertilised fields.
The Hyundai project is the largest foreign green-field investment in the history of the Czech Republic. The plant is worth EUR 990 million, or about CZK 24.7 billion. Its annual capacity is 200,000 cars.
The launch of serial production came five months earlier than the company predicted still in the spring of this year.
“We lost roughly six months in the initial stage – when negotiating conditions between the Korean company Hyundai and the Czech Republic, and then in the zoning plan and building permit proceedings whose participants had appealed. That is why production was scheduled to begin in April 2009, even though the original plans from 2005 counted on a start in 2008. We managed to build the plant in a shorter time and return to the initial schedule,” said Petr Vaněk, the PR head at HMMC.
Hyundai does not believe in crisis
Launching car production seems risky at a time where many car manufacturers are cutting jobs and closing down plants in reaction to decreasing new car sales caused by the global financial crisis. “We perceive the situation as serious, but it’s not a risk. Endangered are sales of large cars with high fuel consumption, and in Europe also those that fail to comply with emission limits. We are not the case,” said Vaněk.
The global diversification of production capacities can help Hyundai offset the decline in America and Europe by raising sales in Asia, in particular China and India where demand for Hyundai cars exceeds the production capacity of local factories. Hyundai’s another competitive advantage is the fact that its plant in Nošovice has been completed, while some of its competitors have postponed planned investment projects owing to rising borrowing costs on global markets.
“Wind-down of production concerns obsolete facilities, fifteen-to-twenty years old. We are the most state-of-the-art car factory in Europe at present. The output of roughly 18,000 cars that we plan for this year is backed by orders. There is no reason not to start producing as soon as possible and as much as possible,” Vaněk said.
Most modern car plant
What is the most modern thing in the Nošovice plant? In particular the welding shop whose staff will never be sick and will never strike. There are only robots working there.
Their “father” is Main Buck, a huge welding machine that makes it possible to manufacture four different car models, for instance Hyundai i30 followed by the small Hyundai Getz, then by the giant Santa Fe and then, let’s say, the luxury Sonata, without having to stop the production line. By changing the setting of welding points, which takes a fraction of a second, Main Buck tells the hundred other robots in the line how to complete the welding process.
The car body then proceeds to the paint shop and then for assembly.
“Here we put the seats in, the dashboard, the whole front part including the engine, simply change the car bodies into cars. The last part of operation is called “OK line” and there all the necessary liquids are added, the break liquid, the windscreen washer, and fuel. Using its own force, the car then goes for tests, every car is tested,” said the assembly head, the thirty-two-year-old Oldřich Fabián. At full operation, when sixty cars will be leaving the line every hour, he will manage 370 people in one shift.
As a graduate from the Brno University of Technology (VÚT), Fabián knows the theory, while training abroad provided him with modern practical experience. “I went for a three-week training to Korea, that is a standard period of time,” said Fabián. But before that he got training from Toyota in the Japan-based Takaoka Plant as one of seven young Czechs who were supposed to assume management posts in the TPCA plant in Kolín.
Did Hyundai offer a higher salary? “I am from Moravia, and Nošovice is closer,” said Fabián, avoiding an answer to the question.
Women get paid well at Hyundai
Wearing a light-blue uniform, Blanka Pavelková, of the nearby village of Tošanovice, is tightening something under the bonnet, using a pneumatic screwer. It was easy for her to decide. “I was in London for a year, then worked in the Nošovice brewery, and then lost my job. That is why I joined Hyundai. I have a good salary, there is a clean environment here and nice people,” said the young operator.
Marcela Pokutová’s orange uniform indicates that she works as a controller. “Hyundai pays well. I used to be a kitchen worker, and my last job was as a shop assistant,” said the young woman whose task is to check whether the equipment of each car corresponds to what the customers has ordered. In the next stages, the equipment functionality is tested and the car parameters checked.
The modernity of the plant also shows in the division of tasks into very basic steps. Anybody can perform them after short training, and the work is not physically hard. That is the reason why 23% of the 1,800 employees are women, most of them working in the assembly line. “And the salary here is roughly double the salary of a shop assistant,” plant spokesman Petr Vaněk said.
YN model to come as early as 2009
The production inputs and new cars will be carried by lorries until November 15. Then a railway siding should start operating.
Hyundai wants to take on 400 more people for the Nošovice plant by the end of the year to be able to launch the second shift in 2009.
Once it reaches full capacity, the Nošovice plant will manufacture 1,200 vehicles a day. Two of three cars will be the models Hyundai i30, the third one will be a multi-purpose vehicle, now called YN. Based on the same platform as i30, it will be produced as of next year instead of 2011.
Starting in 2010, the new plant should manufacture 300,000 cars a year and employ roughly 3,400 people. The company will invest a further EUR 130 million in expansion of the plant, and still be repaying the equipment that has been installed already.
“We have settled roughly two thirds of the EUR 990 million we have invested so far. We pay for all machines and equipment in the form of deferred installment. It will take roughly two years to settle the sum,” said Vaněk.
The Czech state provided investment incentives worth some CZK 5 billion to Hyundai and its suppliers. The government and the Moravian-Silesian region spent another CZK 2 billion on preparations of the industrial zone. The region is to invest a total of CZK 10.5 billion in transport infrastructure that will serve not only the car producers.
“The launch of serial production is rather an internal affair. The ceremonial start will take place on Monday, November 10, and the ceremonial opening of the plant, in which the top management from Korea and journalists from all over the world will attend, is scheduled for April of next year,” Vaněk said.
Translated with permission by the Prague Daily Monitor.
