A leading lighting manufacturer is cautioning the chronic labour shortage in Eastern Europe will be around for a few years to come as suppliers in the region struggle to attract enough employees to staff the booming automotive sector.
The Visegrad Four: Czech Republic, Slovakia, Poland and Hungary, are the principal countries in the area, but are equally ringed with similarly low-cost bases in Slovenia, Romania, Bulgaria and Serbia, all competing for the same pool of increasingly in-demand labour.
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“The reality is the whole industry is in trouble,” Varroc global product development SVP, Todd Morgan told just-auto on the sidelines of last week’s Central and Eastern European Automotive Forum in Prague. “Sometimes we decline business because we don’t have resources available – the whole industry is like this – everyone is in the same boat.
“How do we bring through engineers straight out of school [university] and put them to work? We have to have robust processes. It is going to be around for a few years. In the Czech Republic, they are having difficulty in getting young guys to get into technical universities.
“I am in contact with the government. I had a meeting recently with the R&D Minister in the Czech Republic – this was interesting because they are really going to push incentives for R&D. I work with with the managing director of Continental as well and we say, maybe we need to work with secondary education to get young people interested in technical topics, this is where industry can work together.”
Several speakers at the CEE Forum raised the lack of staffing as a genuine difficulty, with the region a victim of its low-cost success, even leading the Association of Hungarian Automotive Component Manufacturers president, Denes Klujber, to tell just-auto the UK leaving the European Union could encourage some workers to return home.
“Brexit could help Hungary because if the UK [doesn’t] let eastern Europeans go there for work then, sooner or later, [some] of them will come back [home],” said Klujber. “[Labour] availability is even worse in Hungary – the salaries are lower which means there is a bigger chance Hungarians go to work in Slovakia.”
“That means we are not in the best situation with these low salaries – people leave the country and to work [abroad]. Partly the solution is many, many companies started quite an intensive [salary] increase because if they don’t pay more they don’t have any guys to work.”
Varroc Lighting is member of the Varroc Group family of automotive-components businesses.
Founded in 1990, the company is an emerging global automotive component manufacturer and supplier of exterior lighting systems, powertrains, electronics, body and chassis parts to leading passenger car and motorcycle segments worldwide.
Varroc Group has 35 manufacturing facilities, 11 engineering centres, 10,000 employees and 760 engineering experts in ten countries.
The company is a global passenger car exterior lighting supplier and the number one 2-wheeler automotive component supplier in India.
