Czech-American Ties: a 100 Year Bond

Czech-American ties: a 100 year bond

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CzechInvest in New York

Contact our specialist in New York! Jan Chmelík CONTENTS Dear Friends, Phone: 1-347-789-0570 3 Editorial There are two reasons why I am glad to have been given the opportunity E-mail: [email protected] to address the readers of this US-Czech business supplement. Mutual trade is increasing, but First, as a man of business, I am very much aware of the important role 4 a mutually beneficial business environment plays in relations between coun- black clouds are on the horizon tries. For that reason, one of the goals I set for myself as Ambassador to the Czech Republic was to promote economic prosperity and strengthen com- 6 The US is the number one Czech mercial ties between our two countries. export destination outside the EU, Second, as we celebrate the centennial of US-Czech diplomatic relations CzechInvest in San Francisco this year, we have an opportunity to look back, appraise, and discuss new and number three in terms ways to build our bilateral economic relationship – which is already at a high of inward investment level. Our West Coast oﬃ ce is the main point of contact for current In my first seven months as Ambassador I have visited many of the major and future investors as well as Czech start-ups heading to Silicon US Ambassador Stephen King on US companies invested in the Czech Republic, and I have also spoken to 8 many Czech business people interested in expanding their companies to Valley or other tech hubs. This oﬃ ce focuses on high-value-added the business of better diplomacy the United States. Wherever I went I was impressed by the Czech entrepre- projects in the areas of autonomous driving and e-mobility, ICT, neurial spirit, not only among professionals, but also among students and biotechnology, clean tech and high-tech manufacturing. 10 CzechInvest is building two-way ordinary people with the courage and energy to devote themselves to the investment bridges challenging task of starting their own business. In this spirit I recognize a common feature between our two countries. Aero Vodochody seeks to conquer I honestly love the world of business and at the same time I love my work Contact our specialist in San Francisco! 1 4 as ambassador. I therefore believe that it is the obligation of politicians and, America with its L-159 and L-39NG yes, even diplomats, to help create conditions for a sustainable and healthy Miroslav Tenkl planes business environment. We need to support high quality education, promote Phone: 1-831-313-6295 exchanges, and share information and expertise. E-mail: [email protected] I hope you will find inspiration and ideas worth pursuing in the articles 16 Hynek Kmoníček: The US values that follow. Czech reliability 18 A new lease of life for “Made in Czechoslovakia” Stephen B. King US Ambassador to www.czechinvest.org the Czech Republic

Czech-US ties: a 100-year bond. Special supplement. Published by ČTK via its Protext PR service, Opletalova 5, 111 44 Prague 1. Prague | Düsseldorf | London | New York | San Francisco | Tokyo | Seoul | Shanghai Project manager Jaroslav Kábele, editor Igor Záruba, sales Anna Uljačenková. Front cover Lucie Dynterová, ZČU ‒ US Point. Layout aper-grafika.cz. Photos Fotobanka ČTK, MPO, CzechInvest, Aero Vodochody, MZV, CSG. Translations Dominik Jůn. Contact www.protext.cz, [email protected]. Protex Special Black clouds on the horizon

Over the past five years, both the Czech state and Czech its diplomatic representation in the companies have considerably increased their activities in the US US – this includes new economic diplomats in Los Angeles and Chi- market. But newly-erected barriers to trade implemented by the cago, as well as adding new staff to the embassy in Washington, D.C. current US administration threaten further growth. Furthermore, the CzechTrade office in Chicago has also been expanded, while CzechInvest offices in New In terms of trade and investment market. Whether that is in IT services, record profits in the US. In terms of York and San Francisco continue to between the Czech Republic and biotechnologies, medical technologies, added value, we boast comparable carry out crucial work. Another key United States, certain key words or in the aeronautics business. results in the United States with the piece of news is that CzechInvest’s and phrases are impossible to avoid: I am delighted that even amidst likes of France and Italy, where we “CzechAccelerator” programme is added value, innovations, start-ups, considerable competition in the US, export twice the volume of goods. helping to support Czech start-ups technological cooperation, and source the Czech footprint is growing ever How has the Czech government in two destinations, namely Silicon of capital. The global success of our deeper in this market. And even reacted to this state of affairs? Over Valley and New York. technological companies is closely tied small and medium-sized businesses the past five years, the Czech Repub- It is also worth emphasising that to finding success in the American are taking an active interest, making lic has considerably strengthened a new state-backed system of in-

A hit in the US. Czech 3D printer manufacturer Prusa Research has successfully entered the global market, with demand for its products exceeding production capacities. The US represents the firm’s greatest market.

Done deal. In October, 2016, the Czech government signed an investment deal with GE. The US firm is planning to build a research, testing and production centre for turboprop engines in the Czech Republic.

4 summer 2018 Czech-US TIES

vestment incentives will factor-in to focus on measures pertaining to regret the current policies enacted of the World Trade Organisation the crucial mantra of the added the US automobile industry, utilising by the US administration. And the (WTO), as well as efforts to find value of given projects. One recent- a Section 232 investigation [a secti- European response to the steps taken a common solution based on the ly-cited example is investment on of the US Trade Expansion Act of by the US must be commended. We rules of international trade. undertaken into the Czech Repub- 1962, which provides the legal basis also fully support the approach taken One can only hope that the lic by US firm GE Aviation. for the US president’s actions –Ed.] the European Commission in defen- barriers introduced by the US are Alas, one cannot ignore recent to determine the effects of imports ding the binding rules of internatio- merely temporary and serve as an radical changes in US trade policy. on America’s national security. If nal trade. Such responses should be invitation to refocus efforts on build- From negotiating and eliminating such an investigation is truly carried proportional and only designed to ing a positive trade agenda. July's trade barriers via the Transatlantic out, then it could threaten European counter the negative effects of uni- Trump-Juncker meeting seems to Trade and Investment Partnership exports to the value of EUR 53bn; lateral actions by the US. In no case have given rise to such optimism. (TTIP), we now find ourselves in- and specifically Czech exports to the do we seek an escalation of tensions The two leaders struck a deal that stead creating new barriers to trade. order of EUR 300m. and protectionism in the arena of should end the rise in tit-for-tat trade President Donald Trump assumed All of which means we could be international trade. barriers and instead shift us towards the presidency espousing the mantra in for a hot summer and autumn, in Many of the problems found in closer cooperation on the issues of of “America First”. Recently en- which the automobile sector could international trade today, such as concern to both the EU and US. n acted policies by the US can only face a similar hit to what has already excessive production capacity, non- be described as protectionism. New occurred with steel and aluminium. -transparent subsidies, or a lack of US tariffs on steel and aluminium Naturally, the US still continues to be rules, apply to both the EU and US. imports will also impact Czech an important partner for the Czech Which is why we support EU efforts Vladimír Bärtl companies. President Trump has Republic and EU in terms of interna- to renew constructive cooperation Deputy Minister declared that after steel, he wants tional trade, which is why we deeply with the US within the framework of Industry and Trade

Cycling round the world. Based in the north-eastern town of Zlaté Hory, Velobel manufactu- res old-fashioned tyre pumps, bells and other accessories for bicyc- les. Pictured: steel pipes at the start of the manufacturing process.

Harsh policies. The US has implemented a 25 percent import tariff on steel coming from the EU, and 10 percent on aluminium. Such levies are sure to hit Czech exporters.

Tradition and progress in one. Traditional chandelier manufacturer and exporter Preciosa-Lustry Kamenický Šenov utilises LED lighting technology for 95 percent of its products. The company has its own development centre and collaborates with other electric light manufacturers.

summer 2018 5 Protex Special

Reinforcements from America. Travel Service is among the first airlines in the world to receive the new Boeing 737 MAX 8 passenger jet. The aircraft arrived in Prague on January 31, 2018.

Boeing1.jpg

Also gaining significance is the service sector. The Czech Republic’s The Czech Republic greatest exports in this regard are IT services, accounting for 42.8 percent of service sector exports. enters the New World And the greatest number of imports of US goods and services into the Czech Republic are found For the last three years, the Unites States has represented the Czech in the repair and maintenance sector Republic’s largest export market outside the EU. And in terms of (30.9 percent). Other highly sought- out categories are courier services, total inward foreign investments, the US finds itself in third place. road freight transport, consultancy, other services, software, franchise fees, audiovisual services and intel- Last year the US was the Czech to purchases of Boeing 737 MAX 8 including the defence and security lectual property. Republic’s 13th largest trading part- craft and the outfitting of the ELI industries. The US represents ner in terms of total revenue, with Beamlines laser technology centre in around 25 percent of total Czech Investment from the US an exchange of goods and services Dolní Břežany near Prague. arms sales. And Czech manufactur- According to official Czech Nation- worth around USD 7.8bn. And during The significance of the US as an ers of lights sports aircraft enjoy al Bank (ČNB) data, at year’s end the same period, the Czech Republic export destination for Czech busi- a 22 percent share of the US market. 2017, the volume of US investments exported around USD 3.8bn worth of nesses is underscored by several goods and services to the US. In per- key factors. For example, the US centage terms, that accounts for 2.1 represents a highly progressive and percent of total Czech exports. The innovative market; additionally, the US takes 12th place in terms of desti- US is also notable as a market that nation countries for Czech exporters. offers a higher degree of added And for countries outside the EU, for value. three years in a row the US has been And this is highly evident in the the number one destination. foreign trade commodity structure, which is dominated by categories Trade such as engineering products, Compared with 2016, the value of aerospace industry components, trade in 2017 increased by 13.3 per- engines, measuring instruments, cent, with Czech exports up by 6.2 microscopes, weapons and revolv- percent. Exports are seeing growth ers. Steel rods and tubes represent once again, while imports have in- a significant growth category, as creased by more than a fifth. And for well as firearms, rubber processing the first time since 2010, the Czech machines, radiolocation devices and Republic experienced a negative ba- semiconductor storage devices. lance of trade of goods to the order The US market is crucial for cer- Devilish ELI. The “L3 Lucifer” 1 petawatt (PW) superlaser was installed last year in of around USD 230bn, partly thanks tain sectors of the Czech economy, Dolní Břežany courtesy of the US-based Lawrence Livermore National Laboratory (LLNL).

6 summer 2018 Czech-US TIES

into the Czech Republic stood at Microsoft, IBM, Hewlett-Packard, Investors into manufacturing in- Mavel, Pilsen Imports, and Viking USD 1.3bn. At the end of 2016, this Baxter, Mayo Clinic, and GE Avia- clude AlbaMetal, GZ Media (Memphis Mašek. In the defence industry figure was USD 1.4bn, thus repre- tion. Record Pressing), CGS Group – Iowa Czech players in the US include senting a year on year decrease of And the most significant transac- (Mitas), Ceská zbrojovka, Fermat, Ceská zbrojovka and optics firm USD 85m. tion of recent times is an investment and KKCG. Other Czech firms con- Meopta. Meanwhile Czech consumer US investments account for by GE Aviation Czech into building sidering undertaking manufacturing goods are sold in the US courtesy of around one percent of all foreign an ATP turboprop engine research, in the US include textile producers Notino, Preciosa, Lasvit and Carun. investments into the Czech Republic. testing, and manufacturing centre Grund and Mileta, while battery In November 2017, Home Credit And according to the CNB, the US in the Czech Republic. Production producer HE3DA plans to open up (PPF) began offering loans via credit is the third-largest investor into the is scheduled to begin by the end of a production plant in the US. cards in the US market. This expan- country outside of the EU, and the 2022, and by 2023 GE is set to cre- In the IT sector, the twenty Czech sion of operations came on the heels 15th-largest investor overall. ate up to 500 highly specialised jobs. companies operating across the of an initial move two years ago, Attracting foreign investors into The end of 2017 saw the successful pond include Y Soft, Javlin, IT-CNS, when the company began offering the Czech Republic, and subse- completion of the first test of GE’s SocialBakers, STRV, GoodData, loans for the purchase of telephones quently providing key services, is new engine, and this year is focused OKsystem, Corinth, Glogster, Tap- and accessories at the fourth largest the central mission of investment on initiating the certification pro- mates, kiwi, and AVAST. mobile operator in America, namely promotion agency CzechInvest. It cess. Chemicals production is repre- Sprint. Boeing1.jpg has helped to facilitate a total of sented by Agrofert, KKCG, Power- And new announcements include 232 investment projects from the The Czech footstep Future Corp., and United Hydrogen an acquisition by Czech investment US. Last year, the total volume of The number of Czech investors (Brano Group – hydrogen for use in firm R2G - Family Office and Wealth such investment plans exceeded finding a place in the US market, the automobile industry). Management (also owner of Czech USD 3.58, with pledges to create and creating jobs there, continues to In the transportation sector Zetor, Pegas Nonwovens) of US textile firm 42,080 Czech jobs. grow. According to Czech Ministry Leo Express, Mitas Tires, and Czech First Quality Nonwovens. The USD US firms investing into Czech sci- of Trade and Industry figures, more Sport Aircraft have found success 500m acquisition represents the ence and research include Semicon- than seventy such firms are current- in the US. The same is true for en- largest ever Czech investment into ductor, Red Hat, Sun Microsystems, ly operating in the US. gineering firms Fermat, Alba-Metal, the US. n

Czech-US trade (in thousands USD) Export Import Turnover Balance USD Rank Index USD Rank Index USD Rank Index USD 1993 246,761 12 ‒ 420,208 8 ‒ 666,969 10 ‒ ‒173,447 1994 332,509 11 134.7 549,143 8 130.7 881,652 9 132.2 ‒216,634 1995 412,289 10 124.0 851,087 8 155.0 1,263,376 9 143.3 ‒438,798 1996 471,800 9 114.4 934,786 8 109.8 1,406,586 9 111.3 ‒462,986 1997 546,052 9 115.7 1,030,904 8 110.3 1,576,956 9 112.1 ‒484,852 1998 565,053 10 103.5 1,075,452 8 104.3 1,640,505 9 104.0 ‒510,399 1999 621,280 9 110.0 1,112,570 7 103.5 1,733,850 9 105.7 ‒491,290 2000 818,283 8 131.7 1,361,507 7 122.4 2,179,790 9 125.7 ‒543,224 2001 999,431 9 122.1 1,451,080 8 106.6 2,450,511 9 112.4 ‒451,649 2002 1,091,871 9 109.2 1,321,832 9 91.1 2,413,703 9 98.5 ‒229,961 2003 1,188,695 9 108.9 1,591,842 9 120.4 2,780,537 11 115.2 ‒403,147 2004 1,516,104 11 127.5 2,119,126 10 133.1 3,635,230 11 130.7 ‒603,022 2005 2,077,463 10 137.0 1,923,872 11 90.8 4,001,335 11 110.1 153,591 2006 2,179,434 12 104.9 2,173,477 13 113.0 4,352,911 13 108.8 5,957 2007 2,363,607 13 108.5 2,652,481 13 122.0 5,016,088 14 115.2 ‒288,874 2008 2,534,807 14 107.2 2,916,921 13 110.0 5,451,728 14 108.7 ‒382,114 2009 1,799,806 13 71.0 2,198,068 13 75.4 3,997,874 14 73.3 ‒398,262 2010 2,316,439 13 128.7 2,825,603 11 128.5 5,142,042 14 128.6 ‒509,164 2011 3,160,170 13 136.4 2,961,188 12 104.8 6,121,358 13 119.0 198,982 2012 3,579,301 12 113.3 3,030,149 12 102.3 6,609,450 12 108.0 549,152 2013 3,533,237 12 98.7 3,121,808 11 103.0 6,655,045 12 100.7 411,429 2014 3,913,312 13 110.8 3,733,180 10 119.6 7,646,492 12 114.9 180,132 2015 3,741,975 11 95.6 3,318,544 12 88.9 7,060,519 12 92.3 423,431 2016 3,540,665 12 94.6 3,299,551 13 99.4 6,840,216 12 96.9 241,114 2017 3,761,221 12 106.2 3,988,872 13 120.9 7,750,093 13 113.3 ‒227,651 I‒III/2017 898,642 12 23.9 902,759 12 22.6 1,801,401 13 23.2 ‒585 I‒III/2018 1,031,871 12 114.8 1,116,600 11 123.7 2,148,471 12 119.3 ‒6,523

Source: MPO

summer 2018 7 Protex Special The business of better diplomacy

In order to meet their full potential, relations between the Czech the embassy to help attain such an improvement. Republic and the United States require the cultivation of strong economic ties, says Stephen King, United States Ambassador to What kinds of goals? And what part will you play in realising the Czech Republic. Every year, the US embassy is aiming to find them? It works in two directions. I repre- two new investors for both countries, as well as to coax existing sent the United States here, and so I have to help Americans to invest in ones into further expanding existing trade. Such a scenario should, the Czech Republic. And conversely, believes King, create thousands of new jobs in both countries. I also have to help Czechs to do business in the United States. I have to balance that out at the moment. And You like to declare yourself to ships developed as a result of these And then, years later, when I was insofar as my potential legacy is con- be a “man of business” – what activities. Which was fantastic. I enjoy asked if I would accept an ambassa- cerned, I would like to build a third is behind this? Is it your past competing, and I think that the US dorship, I answered “why not?”. And pillar of mutual ties, which would career, affinity for doing busi- tops most indicators in this regard. when asked where I would like to mean that the overall structure will ness, and the experiences you I love sport for the same reason. serve, I answered: “Prague”. be able to stand on three legs. have gained? Which is why I so enjoyed being in The first pillar is bilateral friend- When I entered college, I had no the world of business and being com- Is your enthusiasm for Prague ship, and that is the basis for rela- idea that I would end up in the busi- petitive. Naturally, failure was also and the Czech Republic una- tions. We have a one-hundred year ness sector. I wanted to be a teach- part of the equation, but I learned bated? relationship of ties that are strong er, and, in fact, I ended up in that from these experiences, and sought Certainly. The experiences I have and solid, and so we have a great profession for some time. But then to come out on top if a similar situa- had affirmed my decision, and my foundation on which to further I succumbed to the world of busi- tion arose in the future. And that will expectations have only increased. build. ness, and I must say that that to compete and to succeed – that was The second pillar is security. is a world I genuinely love. what it was all about. You have on a number of occa- Friends are friends, and relations But I also have to add that I really As for the work of being an am- sions stated that you believe work along both bilateral and other enjoy serving as an ambassador. To bassador – if, indeed, I can draw any the Czech economy is in lines. I see great potential in such be in business – especially when conclusions after only seven months – a good shape. How is this fact mutual ties. We have fifty states in the in the US, everything is basically I find it rather similar. Here, too, one business – offers the chance to build has to invent a product, create it, sell management teams, expand a com- it for a competitive price; it is a kind pany, and the opportunity to make of business in the services sector. money, ideally for the longer term. I serve the American people, and That is all very well, and you are I remind myself of that every day. rewarded for your efforts according- ly – but, in all truth, there are other How big a change has it been advantages as well. By that I mean for you to shift to Prague? Did the creation of things which last and you prepare yourself beforehand have added value. It isn’t just about for a different kind of life? dong a certain kind of work, but Of course it was a kind of home- doing it for the benefit of people. work for me going into this. I want- And that led me to the discovery ed to arrive armed with knowledge that the business with which I was in- so as to be able to deal with any volved [setting up and later selling-off potential hurdles. I began making a chemicals production business – preparations in January 2017, and Ed.] did not just help to secure me in spent a year learning about Czech a financial sense, but also gave me society, its people, and its history. a great deal in human terms. Nor was I had never been here before, and this a particularly huge company – it don’t have Czech blood in my veins employed no more than one-hundred [the previous US ambassador An- staff. But it ended up being the most drew Schapiro had a Czech moth- worthy thing I had done. er –Ed.]. Despite this, or perhaps reflected in your work as an US, and each of these has a partner because of it, my expectations were ambassador-businessman? country abroad. They build military When did you realise that? high. Indeed, I have a friend in Wis- I would begin by answering that ties, and the legacy of past migration At the time, or only later? consin who served as ambassador the economy here really is very (from Europe to the New World) helps Yes, it wasn’t until sometime later. to the Czech Republic from 2006-09 strong. As for relations between the to cement such ties. But there is one I was buried up to my ears in busi- [Richard Graber –Ed.], and back Czech Republic and the US, I would country in the world which actually ness, and was doing what needed then he enjoyed telling me stories categorise them as being strong-to- has such close ties with two American to be done. I collaborated with the about this country. He spoke of the very strong. And I view it as my goal states – and that is the Czech Repub- public sector, and we also worked with Czech Republic with great appre- to elevate that status to the category lic. For it has partners in both Texas schools, the states, and the federal ciation, and that created a strong of excellent. And that is why we and Nebraska, and there are strong government. Many valuable friend- impression in me. have set ourselves certain goals at Czech communities in both states.

8 summer 2018 Czech-US TIES

Stephen B. King was confirmed by the Senate on October 5, 2017 as the U.S. Ambassador to the Czech Republic. He is a prominent public servant and businessman who successfully acquired, built, and sold a specialty chemical manufacturing business and founded a family investment business. Ambassador King served as a National Committeeman for From a security perspective, such the Wisconsin Republican Party from 2007-2017. Earlier in his career, Ambassador King investigated civil rights relations are crucial, and play a role in violations for the Federal Bureau of Investigation, served as an investigator for the U.S. Senate’s Permanent military and intelligence matters and Subcommittee on Investigations, and was named Special Assistant to the U.S. Secretary of Agriculture for liaison also law enforcement. between USDA and the Agriculture Committees of the House and Senate. Ambassador King earned a M.A. and The third pillar which I will try a B.S. at Western Illinois University. He grew up in Chicago, Illinois. He is married to Karen King. They have three to build is economic prosperity. This grown children and seven grandchildren. should serve to support the entire platform, but at the same time it forms a foundation on which we can still build for another hundred years. The first “two” is my assuming the Do you already have What general improvements And the importance of such economic ambassadorship, learning about the a good idea of the steps do you think can still be made ties could increase significantly; there environment, and securing two new to be taken this year towards in terms of Czech-US business is much to improve. My sense is that direct American investors who will the realisation of this ties? What would make them without the economic pillar, the other invest into the Czech Republic. And in equation? attain an excellent grade? components of friendship and security order to give them some inspiration, It gives me pleasure to be able to I believe that there should be more won’t be as solid as they could be. we have set out to approach two large state that we have already made exchange programmes between both And that is where I see my mis- existing investors, such as GE, Honey- considerable progress towards countries, both on a theoretical and sion and purpose. I came from the well or Microsoft, so as to encourage this goal. One excellent example practical level. There are certainly world of business, and have consid- them to further engage here and in- of something in which we played more opportunities out there than erable experience in this regard. crease existing investments. Meaning a role is investment from GE Avia- are presently being utilised. At the I also know how to set other goals “two” for new businesses, and another tion with the commitment to devel- embassy in Prague we regularly de- beyond measurable annual indica- “two” for existing corporations. op and manufacture a new type vote our energies to various aspects tors such as sales or profits. And, conversely, I also want to see of (aircraft) engine here in the of bilateral relations. For example, we two new Czech investors who will go Czech Republic, including collab- focused on STEM (science, technol- What, specifically, have you de- out to the United States. Similarly, oration with the Czech Technical ogy, engineering and mathematics), cided to do in this regard? each year I also want to see Czech University in Prague (ČVUT). This and organised a conference in Prague I have a vision for my service here companies already operating in the US plan, including collaboration with on this subject, which was attended in the Czech Republic structured further expanding their operations. ČVUT, should create many highly by experts, entrepreneurs, and scien- around each year that I spend here. At the end of this equation con- specialised jobs, and also educa- tists. The emphasis of the conference I will try to achieve something which taining four number “twos” should tion opportunities for students. was on nanotechnology. And this I describe as “two-plus-two-plus-two- be the creation of thousands of new It will undoubtedly also help kind of an exchange of views by both plus-two does not equal eight, but jobs, which will then help the GDPs to further fuel Czech economic sides could represent a further break- thousands!”. of both countries. development. through in building relations. n

summer 2018 9 Protex Special

Honeywell Brno CzechInvest – a coast Honeywell has built a strong base of operations for technology development in the Czech Republic. The en- to coast operation gineering and hardware firm entered the Czech Republic in 1993 establish- The United States represents a key long-term trading partner ing operations in Prague. A decade later it also opened a research and for the Czech Republic. In terms of the number of direct foreign development centre in Brno. Today, Honeywell also operates two produc- investments, the US is the most important source for new foreign tion plants, in Olomouc and Brno, investment projects after Germany. The CzechInvest agency has so supplying components for aviation, the automotive industry, as well as far negotiated more than 230 planned US investment projects with other automation-oriented industrial and consumer technologies. The a total value of around CZK 85bn. company is also a producer of special materials utilised in telecommunica- tions, electronics, in the automotive GE Aviation testing, manufacturing, right Prague centred on its Skype internet industry, construction, packaging, Prague through to customer support. The telephone and video communica- painting and dyeing, and also in the start of operations at this new turbo- tion software. In 2016, Microsoft agriculture and pharmaceutical in- GE entered the Czech market in prop production centre is scheduled also opened a second technology dustries. 2008 with the acquisition of Walter for 2022. development division in the Czech Engines (Waltrovka), a company with This year, GE Aviation also signed Republic, namely Dynamics CRM, decades-long experience in manu- a collaboration agreement with oriented towards the firm’s custom- Johnson facturing turbo-prop engines. Pres- the Czech Technical University in er relationship management (CRM) & Johnson ently more than 500 staff in Prague Prague (CVUT), which will consol- software solutions. work on designing, manufacturing, idate its capacities for conducting Global Services selling and servicing GE turboprop experimentation, and also improve Prague engines for use in transportation, its capabilities for evaluating in- Red Hat The J&J GS Prague centre offers agriculture, training and other kinds formation via the use of unique GE Brno support for commercial partners of aircraft spanning the branches of software. Red Hat develops software, spe- across the Johnson & Johnson family general and civilian aviation. cifically a Linux-based commercial of companies. Its Prague centre was In 2016, GE and representatives operating system named Red Hat established in 2006, and started out of the Czech government singed Microsoft Enterprise Linux. The company by providing services related to pro- an investment agreement for the Prague also offers consultation, training cessing supplier invoices. It later as- construction of a new GE centre The US firm is engaged in the pro- and certification services. The US sumed the responsibility of processing to manufacture turboprop engines duction, development and support multinational software company has claims, which served as the founda- in the Czech Republic. This devel- of a wide range of computer-related operated in Brno since 2006. In the tion for building up the centre to offer opment and manufacturing centre products. Asides from its Windows Czech Republic, Red Hat focuses on complex financial support services in Prague’s Letňany is to serve as and other operating systems, Mic- software development and testing. to J&J partner firms. Thanks to its the only GE facility outside the US rosoft is a market leader in office The firm collaborates closely with advantageous location, and a decade which engages in the construction of software, in gaming technology, con- local universities and employs 900 of globally successful operations, in aircraft engines, and which incorpo- sumer electronics, and in providing staff in Brno, making it the second- 2016 the Prague centre was expanded rates the full scope of the production digital services. In 2014, Microsoft -largest Red Hat centre after its further to incorporate purchases and process from development, through opened a development centre in headquarters in the United States. human resources divisions. n

Czech start-ups operating in the US market Legito The firm has managed to find success health problems in their earliest www.legito.cz in the US market – a key goal. stages. Product set includes: Health CzechInvest support: & Activity Tracker + a collection of n CzechDemo project – participa- smart Wi-fi food and water bowls + tion in the TechCrunch Disrupt Six Guys Labs iOS & Android applications. conference in London in Decem- www.actijoy.com Gained a CZK 25m investment from ber, 2016 CzechInvest support: Vafo Praha, a producer of pet food. The n CzechAccelerator project – three n CzechDemo project – participation investment is targeted towards the pro- month stay in a local business at the TechCrunch Disrupt London duction of the initial product line and to incubator in New York January- 2016, CES Las Vegas 2017, Tech- support entry into the US market. -April 2018 Crunch Disrupt New York 2017, Legito is an internet application for TechCrunch Disrupt San Francisco Participation in the CzechDemo the easy creation of customisable 2017, Slush Helsinki 2017, and project yielded huge dividends. contract templates and other legal CES Las Vegas 2018 conferences. Asides from facilitating direct ex- documents. Legito can be utilised as Smart technology for canines, which periences with this market, Cze- an internal company solution for gen- provides monitoring of dog health chInvest support also enabled erating and processing documents. and lifestyle, and reveals potential us to carry out a more targeted

10 summer 2018 Czech-US TIES

US investments into the Czech Republic US investments into the Czech Republic negotiated by CzechInvest, 1993-2017 negotiated by CzechInvest, 1993-2017 (according to year) (according to sector) Number Level of Number Number Level of Number Year of investments of Sector of investments of projects (CZK mil.) jobs projects (CZK mil.) jobs 1994 4 975,91 472 Biotechnology and medical technology 4 1,109.92 625 1997 1 1,367.20 500 Strategic Services Centre 1 1.00 155 1998 2 1,050.36 227 Electrical equipment 9 3,204.39 2,313 1999 3 785.04 371 Electronics 16 4,085.86 2,071 2000 11 5,335.45 3,175 Pharmaceuticals 5 1,693.96 1,021 2001 6 5,559.42 1,132 Rubber production 7 1,952.00 1,024 2002 4 2,203.04 2,121 Chemical and petrochemical 8 3,274.42 1,609 2003 14 6,863.70 4,483 ICT 31 2,952.48 5,461 2004 21 3,911.52 3,078 IT and software development 4 308.50 847 2005 20 5,964.94 2,698 Metalworking and machining 5 2,945.45 706 2006 13 6,489.75 3,276 Aviation 11 7,371.18 2,180 2007 16 5,476.40 3,026 Logistics 1 35.00 15 2008 11 1,848.98 1,932 Paper and woodworking 3 1,019.30 162 2009 8 1,777.37 604 Plastics 6 1,435.29 924 2010 10 2,093.59 1,185 Advanced materials and nanotechnology 1 465.07 34 2011 12 6,231.49 2,338 Foods 7 4,502.15 491 2012 10 1,270.54 1,048 Services 15 2,179.96 5,540 2013 11 6,327.79 1,527 Engineering 26 11,881.79 4,760 2014 13 3,134.27 2,900 Textiles 1 12.00 25 2015 22 9,695.23 3,464 Automobile production 56 23,523.75 9,816 2016 10 4,351.81 1,396 Furniture production 1 646.05 440 2017 10 2,063.40 1,127 Others 14 10,177.69 1,861

Source: CzechInvest

both general use and customised in- TechDay helped us to meet new teractive solutions in the audiovisual people and get to know new field. XLAB offers the most modern companies from our field, and technologies and sophisticated-cre- we continue to further cultivate ative thinking. these ties. This has opened up The firm has a division in New the door towards widening our York, and is also planning on expand- network of local contacts. ing its activities to the West Coast. Martin Stoila XLAB views the US market as an XLAB representative amenable business environment, in which the firm has encountered a large demand for its services. The Integromat attractiveness and size of the US www.integromat.com market helped to motivate the firm’s CzechInvest support: decision to establish an overseas n CzechAccelerator project – three- branch. month stay at a local business

introduction to consumers, part- XLAB ners and investors, as well as to www.xlab.cz hone our presentation skills, and www.xlabrealtime.com chiefly to gain many valuable CzechInvest support: contacts of the kind that would n CzechDemo project – participation otherwise be very difficult to at the TechDay New York confer- cultivate. Furthermore, the op- ence, May, 2018 portunity to present our business XLAB focuses on development in the at the various conferences repre- fields of HW and SW (hardware and sents a valuable PR opportunity software), and on the integration for any start-up firm. of multimedia during major shows, Robert Hašek live TV broadcasts, and corporate

CEO, Six Guys Labs presentations, as well as on creating 

summer 2018 11 Protex Special

incubator in San Francisco, Janu- ary-April, 2018 Ready for action Integromat is a human work automation tool. It integrates online appli- American firms aren’t interested in endless talk. During cations and services of the kind that do not normally communicate with negotiations, foreign visitors need to come prepared and be able each other, enabling mutual data sharing. This integration is designed to answer any questions clearly, says CzechInvest’s New York to not require complex programming office representative Jan Chmelík. skills and also to offer a significantly cheaper alternative to custom integration solutions. The Integromat How would you sum up Czech- from President Barack Obama to is offered free for basic use. Forbes Invest’s mission? What kind of President Donald Trump? magazine’s “Startup of the Week” clients do you serve, and how Right now, I am aware that this is winner (January, 2018). does the agency determine is a very strong issue being played out Has presently secured an invest- modus operandi? in the media. Naturally some (US) ment offer. Its main goal continues to be secur- companies might re-evaluate investing new investment flows into the ment aims outside of the US, includ- Czech Republic – we are working ing because of their country’s new Presentigo with an ever-expanding pool of tax system, but I have yet to come www.presentigo.com investors, and never cease trying across that directly insofar as a com- CzechInvest support: to find new opportunities in this pany suspending talks as a result of n CzechAccelerator project ‒ three- regard. We are in contact with other the new administration’s policies. month stay at a local business in- Czechs in the area. To this end, we International agreements and local cubator in San Francisco (March- undertake the closest collaboration rules still continue to be in effect. -June, 2014) with the Czech General Consulate in Furthermore, manufacturing or Sales tool which helps businesses to New York. We try to collate all of our other activities in Europe are mostly present their products and services different resources so as to jointly also related to market proximity, in an interactive manner, combining aid the effort of gaining new invest- meaning being close to customers 3D visualisations and infographics, as ment into the Czech Republic, and with regards to time and location. well as data collection during the du- also in assisting Czech firms abroad. What has most surprised you What do you see as the positive Of which achievement is Czech- during your stay in America? assets of the Czech Republic in Invest’s New York office most Mostly small things associated with terms of attracting US invest- proud? a somewhat different lifestyle. Per- ments? What resources help to As part of its support of small and haps the hardest thing to get used consolidate ties? medium-sized enterprises, I am most to was the tipping system (in bars Firms operating in the Czech Republic proud of the Czech Startup Week and restaurants) in which the bare value the workmanship and skills of NYC project, which we have twice minimum 15 percent is almost con- the Czech labour force. A long man- organised now. This programme, sidered to be rude. But that is the ufacturing tradition is crucial, and with assistance from CzechDemo way it works here. we can certainly prove this heritage [a specific CzechInvest programme in the Czech Republic. Our country to support start-ups –Ed.], has In what manner do you under- offers many examples of very sophisti- helped to bring Czech start-ups to take communications with head- cated US projects being implemented prestigious conferences in New quarters back in Prague? across a wide range of fields. I’m not York. And thanks to assistance from We have in place a system of report- sure I would label them “resources”, our New York consulate, and an ing, as well as regular online con- but just as the rest of the world, we overall policy of support for econom- ferences and other communications also face issues with finding sufficient ic diplomacy, we are able – apart with individual departments based labour for the desired fields. from securing attendance for com- on specific cases. panies – to also enable such firms What kinds of questions do US ration of the presentation to cloud and to spend a week getting acquainted If you are able to make such firms ask about the Czech Re- CRM systems. Presently also working with the local market, to learn cru- a comparison – have you observed public? What do they emphasise on virtual reality (VR) application. cial local information from experts, a change in the environment in in terms of importance? and to make presentations in front the US, and thus also your own Facts and dates. American companies We were able to experience the of panels of local investors. And this work methodology, as a result of are not interested in endless talk; atmosphere in which the largest is all a relatively new phenomenon. the change of administrations when you come to a meeting, you technological companies in the need to be prepared and to be ready world are born; to partake in to answer questions clearly and networking events, and to co- directly. Naturally, you will need to llect valuable experiences and One becomes two present an offer and underscore the contacts. Without the support of CzechInvest has had representation in New York since 2011. Previously, this added value for the company, should CzechInvest it would have been Czech agency had a single office in Chicago responsible for the entire United the Czech Republic be the destina- very difficult to make our way States. But now the country is divided across the Mississippi into east and tion of choice. Also of importance out to Silicon Valley in this ma- west, which has enabled CzechInvest greater flexibility in reacting to oppor- is infrastructure, and how advanced nner. Today, we have a subsidia- tunities on either American coast via offices in New York and San Francisco. a country is professionally in a given ry established in the US, alongsi- This new arrangement has also helped the agency’s CzechAccelerator field. I believe that Czech Republic de customers and partners. project to assist Czech start-ups in both Silicon Valley and New York. continues to do very well in such Adam Mrštík, Presentigo areas. n

12 summer 2018 Czech-US TIES

part of expert panels, we organise surprise that liberal California is a large number of our own events, clearly very much in the opponent we undertake expansive marketing camp in this regard. campaigns, and we actively develop relations with our trading partners, What do you see as the positive as well as with journalists and the assets of the Czech Republic in Czech community. All this means terms of attracting US invest- that the Czech Republic is highly ments? What resources help to visible here. consolidate ties? Our key strengths undoubtedly What has most surprised you include a highly developed talent about your activities in the US? base in the field of traditional and To a considerable degree, unlike software engineering; additionally, Europe, the US has multifarious ed- the geographic location of our coun- ucation, health, social and business try and the Prague “brand”, which systems. In this sense, practical mat- is often better known abroad than ters are somewhat different, and it our country. In terms of disadvan- took me a while to get used to that. tages, in many cases we have a rigid In my view, life in the US is harder business climate, for example in than life in Europe in the wider terms of the process of establishing sense. And in terms of San Francisco a company, as well as an outdated itself, I was surprised by the highly system of investment incentives. visible and evident negative side of Another disadvantage for our work global development – the differences is the situation in the Czech labour between the social classes are huge market [meaning shortages of skilled here, and the number of homeless labour –Ed.]. people on the streets in the centre of town is incomparable with other What kinds of questions do US US cities. firms ask about the Czech Repub- lic? What do they emphasise in In what manner do you commu- terms of importance? nicate with headquarters back in One key issue is the availability and A carp amidst Prague? also the quality of the Czech labour I am in regular contact with Czech- Invest’s headquarters, both in terms a sea of tech whales of coordinating investment projects, The Czech Republic has become an and also with regards to programs 20 years in supporting start-ups. Of all our unmistakable presence in Silicon Valley. We agency’s foreign offices, we have Silicon Valley CzechInvest has had a presence the greatest time difference with in the Bay Area for almost twenty nurture our start-ups, make presentations Prague (nine hours). And so I can’t years. It is the longest-serving deal with Prague at all during stan- at conferences, organise our own events, agency of its kind from Central dard working hours, and so have to Europe. The initial motivations for undertake marketing campaigns, and plan my work and communications establishing a West Coast office carefully. endure: Silicon Valley is, and will actively develop relations with business continue to be, the heartland of partners. So says Miroslav Tenkl, If indeed you are able to make the US technology industry, and a comparison, how would you that still offers considerable busi- CzechInvest’s foreign representative at the say life in the US, and also your ness opportunities for the Czech work, has changed as a result of Republic. agency’s San Francisco branch. the change of administrations from President Barack Obama to President Donald Trump? What is the mission of your West called CzechAccelerator. The third In my view, the impact of this on force, primarily in terms of the high- Coast office; who are the clients; pillar of our work is to continually the everyday lives of Americans, ly-qualified sector. And this is closely and how do you determine your build a successful “brand” for the including their wages, has tended tied to the interest of companies in modus operandi? Czech Republic as a country, espe- to be demonised. The main tangible the quality and orientation of Czech Our office has three main missions. cially in terms of being a place in impacts that I have come across technical universities. And only in The first is to negotiate with firms on which to do business. tend to be in immigration policy and subsequent steps do we focus on the US West Coast about potential in terms of issuing visas. Those are issues such as wage requirements investment projects in the Czech Re- Of which undertaking is CzechIn- issues which not only Czech start- for given positions or financial in- public with a high added value. We vest’s San Francisco office partic- ups are now having to deal with centives from the side of the Czech mainly reach out to companies in the ularly proud? rather more frequently. I would tend government. Other major issues are fields of autonomous mobility, elec- Probably the greatest achievement to view the impact of the new pres- quality of life associated with the tro-mobility, artificial intelligence, is the fact that the Czech Republic ident more in terms of the reaction presence of international schools data centres, or in the gaming in- has become of the most visible and of society here, and the division of and preschools, accessibility of hous- dustry. Secondly, we nurture Czech active European countries in Silicon people into opponents and supporting, the sizes of ex-pat communities, start-ups coming to Silicon Valley. Valley. We regularly make presen- ers of the current administration crime levels, and free time opportu- Our key platform in this regard is tations at business conferences as in Washington. It will come as no nities. n

summer 2018 13 Protex Special

Side by side. An L-159 and L-39CW fly jointly in the air. The L-39CW is powered by small turbofan engines, and is a demonstrator of the new generation L-39NG.

combat training for various con- flict scenarios. The L-159 and L-39NG (both turbofan jet) possess many advantages compared with turboprop aircraft. For example, they are multi-purpose, can be placed into service far quicker, and they possess greater firepower. They can also attain higher speeds at a range of altitudes and also boast better acceleration speeds. Conse- quently, they are safer for pilots. Additionally, in the case of the L-39NG, increased performance is offered at the same, or even a lower cost than turboprop aircraft. The L-159 model intended for the US market will be outfitted with the most modern battle-tested generation 4+ avionics from Israel Aero Vodochody has its sights set Aerospace Industries (IAI). They will also be outfitted with Israeli Elta radar for operations in day- on the US market time, night-time, and in all kinds of Aero Vodochody is targeting the US market, responding to demand weather. L-39NG craft, cousins of the for light compact aircraft via its L-159 and L-39NG aircraft, as affordably-designed L-39 model, are also able to strike ground- well as via a partnership with Israel Aerospace Industries, a world based targets. The current version leader in military technology systems. “Aircraft could be produced of the L-39NG retains the tried and tested aerodynamic design of the in the Czech Republic or abroad,” concedes Aero Vodochody L-39, combining this with the most modern technologies on the mar- general manager Guiseppe Giordo. ket. Avionics have been installed with a view to the requirement of OA-X is an experimental pro- inforced runways. And all other jet multi-purpose missions, and can gramme operated by the US Air aircraft have been eliminated from easily be customised to meet the Force, one in which Aero Vodocho- the competition for failure to meet specific needs of customers. They dy is seeking to participate. The this requirement, and only two are also outfitted with five pylon programme is designed to expand other turbo-prop craft remain. stations designed to carry any US forces to include a new class But rather than being daunted, combination of fuel, weaponry or of light attack aircraft with lower such requirements are providing other auxiliary attachments. operating costs. The US Air Force motivation to Aero – it is partaking Presently, Aero Vodochody is is seeking 300 new aircraft to pro- in the tender process convinced in the phase of seeking out an ap- vide direct support to ground forc- that its models are fully capable propriate partner in the American es and also aerial reconnaissance. of taking off from non-reinforced market. The Czech aeronautics And in this regard, Aero, the runways; indeed, the L-139 and producer is aware that its chances largest aeronautics manufacturer L-39NG models have repeatedly of success in the US are dependant in the Czech Republic, is targeting demonstrated this very capability. on partnering with a local player the North American market with “The United States is already in the field. The promise of the its L-159 and L-39NG models. home to more than 300 L-39 Czech company shifting part of “We believe that these craft are aircraft licensed for civilian use, its productions across the Atlantic a perfect choice for the US mili- adapted to a number of custom- may serve to significantly increase tary if they are seeking tried and ised configurations. And US Air Manufacturing the main wing spar. the chances of gaining the desired tested light combat craft, and need Force units are in regular contact This February, Aero initiated production contract. “We are capable of shift- craft for use in close proximity of with Czech military combat craft, of its new L-39NG jet aircraft. ing not only final assembly to the airports,” explains the company’s thanks to a (US) company called US, but also the manufacturing of president Guiseppe Giordo. Draken International. They are individual components,” explains One important requirement the largest global player in the the US Department of Defense,” Giordo. The results of the tender sought by the US military is for field of military contract air ser- adds Giordo. Draken utilises the should be announced early next aircraft to be able to utilise non-re- vices for fighter aircraft, serving L-159E and L-39 specifically in year. n

14 summer 2018

vodochody3-CZ-GB 9. července 2018 12:27:05 vodochody3-CZ-GB 9. července 2018 12:27:05 Protex Special

Joined by his spouse. Ambassador Kmoníček is married to Uzbek -born American Tatar Indira Gumarova.

Another little Austria In the eyes of many Americans, the Czech Republic has cultivated the extradition of Nikulin was certainly an event that was noted at a reputation as being a reliable country, able to debate issues ad in- all levels. finitum, albeit ultimately always acting like a reliable Western country, What is the nature of Czech says Czech Ambassador to the United States Hynek Kmoníček. “reliability”? The fact that we can debate issues ad infinitum, but in the end we You have served as Ambassador often overlook the significance of capital might still acquire in the always end up acting like a pre- for more than a year now. How a visit such as Ryan’s. United States. dictable Western country. would you evaluate your four- Also of significance is the fact teen months in Washington? that last year we reached a volume You have emphasised that for Can you list other countries That is for others to do. But I am of more than CZK 181bn in trade the US, the Czech Republic does with whom we share a similar glad that, along with my current with America. And this year’s num- not represent a priority country, standing in American eyes? team, I managed to organise bers suggest further trade growth but that it does have a reputa- The nations of Central Europe. If a meeting here of interior and de- of more than ten percent. Czech- tion as a reliable partner. Does I had to compare our position with fence ministers with their American US strategic dialogue has just this reputation endure, and has anyone, then I would say that for counterparts. And mainly also to taken place, and over the space it been helped, for example, by Americans, we are a kind of Austria. bring the American political num- of a year 660,000 Americans have the extradition to the US of ac- A wealthy Central European country, ber three Paul Ryan [as US Speaker visited the Czech Republic, includ- cused Russian hacker Yevgeniy albeit one with a manifold variety of of the House of Representatives, ing making use of a new air route Nikulin in March? contacts with places one might not he is second in line of succession between Philadelphia and Prague. We still enjoy this reputation, and expect, from Russia to Senegal. after the Vice President –Ed.] to the Add to that more than one-hun- it is so strong that it may even be Czech Republic. Ryan’s historical dred cultural events organised by somewhat detrimental to us. By Have you had a chance to expe- address to both chambers of the our embassy, which also helped to that I mean that we lack any grand rience first-hand the changes Czech parliament represented the increase our visibility among the themes that would extend into which have occurred in terms most significant US visit to the American public. After a number internal American politics. Trade is of foreign diplomacy from the Czech Republic for the last nine of years, we finally find ourselves growing; as Czechs we don’t have Trump administration in com- years. President Obama’s 2009 in a situation in which we are no any power-based grand foreign parison to the Obama adminis- visit was not primarily bilateral longer primarily seeking US inves- agenda; rather, we tend to focus tration? Czech-US in nature. Because of the tors into the Czech Republic, but on internal or European questions. Of course. Beginning with the fig- overriding Czech “fascination” with rather are looking out for further For Americans, we represent urative personnel earthquakes at Donald Trump and only Trump, we possibilities regarding what Czech a kind of problem-free nation. And the White House and State Depart-

16 summer 2018 Czech-US TIES

ment, all the way through to en- The Czech position was fully ex- tirely new approaches by the US to pressed by the Ministry of Foreign Hynek Kmoníček Europe, trade policy, Iran, the Near Affairs of the Czech Republic, and Graduate of the Pedagogic Faculty in České Budějovice, and English and East, and so on. Indeed, the chang- it was such a balanced position that Arabic languages at Charles University, Prague. Also studied the modern es have been so quick that Prague during a single night, both the Israe- history of the Near East, Arabic and Hebrew at the Hebrew University in has often not been able to fully reg- lis and Palestinians thanked me for Jerusalem. An experienced diplomat, he served as Czech Ambassador to ister and digest them. Everything it. Everyone picked out what they the United Nations from 2001-06. Also served as ambassador to India and has changed, and Europe has not wanted from it. I did not advise the Australia. Spent four years heading the Foreign Section of the Office of the yet come to terms with that. president, because my present em- Czech President. Ambassador to the United States since April 24, 2017. ployer is the Czech foreign ministry. As an expert in security matters and the Near East, were you Is a visit by President Zeman invited to partake in the debate to the United States still on the the president. And the last time ton, while the Czech Philharmonic over shifting the US Embassy in cards? Is it still dependant on the Austrian president visited here will be performing in the Kennedy Israel to Jerusalem? the existence of a Czech govern- (the US) was 1996. Centre. We are also preparing I wasn’t, nor could I have been. ment which has secured a vote a major international conference That is chiefly a political matter, not of confidence in the Czech par- Stephen King, the new US Am- to mark the anniversary. All of this to mention an internal matter for liament? [this interview was con- bassador to the Czech Repub- is a kind of year-long bonus in ad- the United States. The country had ducted prior to the vote in July in lic, says he considers himself dition to that CZK 181bn in trade its motivations for this decision. which a Babiš-led government won a “man of business”, and wants I mentioned, which represents I am a representative of a “foreign a vote of confidence –Ed.] to shape his tenure around that “business as usual” for us. power” here, and if I partook in The situation has not changed. idea. If you were so inclined, such debates, then I would be We have received an invitation, what kind of an appellation If you received an offer to return viewed as a native. But I know and when issues of interest will would you ascribe to yourself? to the Czech Republic to work where I am at home. Of course, come to the fore for the US, then Perhaps a Czech diplomat who is in a post which appealed to you, I did play a role in presenting the we will be able to set a date. We able to distinguish important mat- would you return? What kind of Czech position on this matter. are essentially Austria, and our ters from figurative media ballast. an offer would make you serious- democratic systems are ever-more ly consider returning home? Did you advise President Zeman similar – ones with a significant On what issues will you be fo- It would have to be a genuinely over the Czech response? role, but not an executive one, for cusing for the rest of your am- long-term offer, because right now bassadorship? This year is the 100th anniversary of the found- ing of the Czechoslovak state, We have received an and the United States had invitation for President a central role in that history. Will any celebrations be taking Zeman to visit the US, place across the Atlantic? When and where will they be? and when issues Such events are planned, and will be taking place throughout the of interest will come year. Not long ago, I calculated to the fore for the US, that this year alone I had already driven more than 4,000 miles so then we will be able as to be able to attend various Czech centennial celebrations in to set a date the kinds of communities where a Czech ambassador had never On television. During a May festival event in Memphis saluting the Czech Republic, visited. From Nebraska to Texas, Ambassador Kmoníček appeared on the television show Live@9. our compatriots have utilised the I am deeply invested in reaping anniversary to celebrate their what has been sowed here across national and cultural roots. Some- the Atlantic. I am at home in the times it is very moving to observe. Czech Republic, but here in the For example, in South Dakota, in US I also don’t entirely feel like a small, isolated town with almost a foreigner. It would appear that entirely Czech roots I was asked in my life will continue to play out all seriousness during a celebra- between both continents. Which tion event about “where and how is why I am trying to take a more were our royal family living”. individual approach, based on the May saw a month-long celebra- fact that I feel comfortable in both tion of Czech culture in Memphis, countries. You could call it a kind held right next to Graceland, the of cultural Czech-American transla- home of Elvis Presley. I will be in tion. It means being able to explain Nebraska in August, serving as to someone, not so much what a marshal for a large Czech pro- a partner is doing, but rather what cession, heading a roughly 15,000 motivated them to undertake such strong group of Czech-Americans. moves. Not just what, but also why. Greatest presentation. While attending the 42nd annual Memphis in May festival, And in October, the Kühn Chil- To go all the way to matters of mo- Ambassador Kmoníček met with local councilman Berlin Boyd and Shelby County dren’s Choir will be performing at tivation – and then beyond motiva- mayor Mark Luttrell. the National Cathedral in Washing- tion, to the factors that led to it. n

summer 2018 17 Protex Special Made in Czechoslovakia lives on of the Czech Republic, Slovakia, The Strnad Czech entrepreneurial family has managed to transform Poland, India and others. And in the civilian sector, the Tatra Phoenix the long-defunct “Made in Czechoslovakia” label into a modern brand. chassis concept is reliably serving Its Czechoslovak Group holding company now incorporates such well foresters, farmers, miners and other customers. The firm’s reputation for -known Czechoslovak brands as Tatra and Avia. The company’s activi- reliability and endurance has also been tested in extreme cross-coun- ties are also expanding beyond Europe and across the Atlantic. try rally competitions such as the Dakar Rally, Africa Eco Race and the Euro-Asian Silk Way Rally. Founded in 1918, Czechoslovakia ended its existence as a single Jaroslav Strnad Business strategies country in 1993 with the establish- The journey of the Strnads to Tatra ment of the Czech Republic and When it comes to acquisition of troubled businesses was a far from easy one, and serves Slovakia (often referred to as the Jaroslav Strnad is evidently somewhat fearless, under- as an illustration of the family’s Velvet Divorce). But, almost a quar- taking restructuring efforts designed to return such overall approach to doing business. ter of a century later, the Czech companies to prosperity. His Czechoslovak Group (CSG) Father Jaroslav and son Michael Strnad entrepreneurial family includes automotive firms Tatra Trucks and Avia Motors. Strnad make targeted investments At the start of 2018, ownership of the group was trans- decided to revive the name of the into companies which find them- ferred to son Michal Strnad. CSG also comprises watch defunct state. It named its holding selves in financial difficulties, often manufacturer Elton (its watches go under the Prim company Czechoslovak Group as a result of mismanagement by brand), train brake manufacturer DAKO-CZ, and the traditional Slovak (CSG), and in 2016 undertook the the former owners. They then as- firms ZVS (ammunition) and ZTS Metalurg (metallurgy). Despite the highly symbolic move of labelling change of hands, Jaroslav Strnad is still actively involved in overseeing sume the inherent risks of trying to its products “Made in Czechoslo- the strategic steps undertaken by the CSG group of companies. bring such business “organisms” vakia”. This reminder of the now back to good health, including gain- non-existent federation is proving ing new customers. In 2013, Jaro- to be an asset for the Strnad family slav Strnad and fellow shareholder business – for they operate facto- petitors in the trade: repairing and ry going back to the mid-19th cen- René Matera acquired a Tatra com- ries in both the Czech Republic and reselling hardware, or dismantling it tury. Its trucks division specialises pany riddled with debts, and suffer- Slovakia. And CSG has managed to for replacements parts, would yield in the production of heavy trucks, ing from an almost complete lack of acquire a number of highly-regard- far greater profits. Over time, Str- which offer exceptional mobility in business. During the space of four ed Czech(oslovak) brands into its nad became a manufacturer in his a variety of terrains. Tatra Trucks’ years, they managed to revive not portfolio, including truck manufac- own right. As the number of compa- unique chassis design, featuring only Tatra’s economic fortunes, but turers Tatra and Avia. nies he had acquired grew, Strnad a central load-bearing pipe, forms also its former good name. Three Jaroslav Strnad (born 1972) be- gradually expanded into the military, the basis of an entire flotilla of years later, in 2016, the Strnads gan his career trading in scrap iron, automotive and railway industries. logistics vehicles and vehicle un- also acquired another traditional including decommissioned military Today, Tatra Trucks forms the dercarriages. These vehicles carry Czech automotive firm, namely hardware. He then had an idea to most important part of Strnad’s military and electronics systems Avia. In this case, the former owner take matters a step beyond his com- business holdings. Tatra has a histo- for national armies including that had halted local production and

Avia Motors The roots of Avia Motors stretch back to 1919. From its inception, the company primarily oriented itself towards aeronautical manufacturing. From the 1920s Avia began supplying craft for both domestic and foreign air forces and also for civilian operators. After the Second World War, Avia expanded beyond aeronautics production into the field of freight vehicle transport. From the 1960s, truck manufacturing became the chief activity of Avia. 1967 proved to be a decisive year with the signing of a licensing agreement with French automaker Renault. This led to the emergence of Avia’s “A” series of trucks spanning various gross vehicle weights (GVW). Avia supplied such trucks to both the domestic market and also abroad via large serial production operations. After 1989, the company changed owners a number of times. In 1995 it was acquired by Korean firm Daewoo. In 2005, amidst a background of growing losses at the firm, Daewoo sold its share to financial group Odien. They then sold the firm a year later to Indian engineering firm Ashok Leyland Motors. In 2013, manufacturing was shifted to a new plant in India. That meant that for a number of years the only operations undertaken in the Czech Republic by Avia were vehicle servicing for existing customers. In 2016, Avia was acquired by Czechoslovak Group, shifting its headquarters from Letňany, Prague to an industrial centre in Přelouč, near the town of Pardubice. In 2018, Avia revived freight vehicle production.

18 summer 2018 Czech-US TIES

Tatra Trucks Tatra is the third-oldest automotive company in the world with a history going back 165 years. The company developed its first automobile car in 1897 (the Präsident) and a year later developed its first truck (the NW First Truck). Today, Tatra’s trucks are in use around the world boasting a unique backbone chassis design which spans models from 4x4 (wheel drive) to 16x16. These are used in both civilian and military operations. The majority of Tatra vehicles are used for freight and cargo transportation, and also as carriers for special extensions (such as cranes or military hardware). Tatra chassis are also in use in armoured vehicles. In 2013, Tatra became a subsidiary of the Tatra Trucks joint stock company and underwent a successful restructuring process. Today, the firm has expanded production to include special custom-made freight vehicles, attuned to the needs of particular customers. 80 percent of production is geared towards export.

shifted it to India. By the start of Slovak Training Academy, which is 2018, after gaining the necessary Michal Strnad fulfilling a commission from US firm certifications, Avia revived manu- Raytheon to train helicopter pilots. facturing of light commercial vehi- Strnad began working for his family company – then In recent times CSG’s ties to the cles (aka LGVs, or vans). going under the name of Excalibur Army – at the age US have strengthened to such a de- The railway industry forms an- of fifteen. From temporary holiday jobs, Strnad soon gree that the group has even found other pillar of the Strnad family’s secured a more permanent footing, working in sections representation there via the well- business operations. DAKO-CZ is including warehouse management, IT, marketing and, known lawyer and lobbyist Lanny of course, the sales department. Michal also began to part of their Czechoslovak Group, Davis. In May 2018, Davis took part accompany his father Jaroslav to business meetings, and serves to develop and manu- in a debate held in Prague’s Žofín gaining experience in dealing with customers, suppliers facture break systems for trains Palace entitled “What the heck is and other partners. He joined the firm full-time at the age of twenty. Prior made by global manufacturers going on in America”, which also to assuming control over Czechoslovak Group in January 2018, Michal featured former White House strat- such as Bombardier, Siemens and Strnad had spent several years serving as CSG’s general manager. Strnad Stadler. As an example, DAKO-CZ also undertakes independent activities investing in start-up projects. egist Steve Bannon. breaks are used in subway trains The Strnad family is continuing on Oslo’s underground system, as to further increase the footprint of well in Munich and Kuala Lumpur. Czechoslovak Group. For example, And so the Strnads are cer- within the NATO alliance. Such subsidiary firm Tatra Defence Ve- CSG also produces luxury watches tainly not the kind of investors capabilities eliminate unwanted hicle, and represent a variation of as well as servicing large aircraft who acquire businesses only to dependence on former Russian the US Stryker armoured vehicle. operated by civilian airlines. Such appraise their value with the aim manufacturers, and also serve as In 2017, these Czech-made Pan- an empire can’t help but bring to of stripping out and selling off the direct competition in this regard. durs gained their first customer, mind another famous Czech(oslo- most saleable commodities. Rather, namely the Czech Ministry of De- vak) business dynasty, namely the their aim is to nurture and develop Growing ties fence, which ordered twenty “com- Baťa family, most famous for their their businesses for the long-term, to the West and US mand” (velitelský) and “support” footwear business. In total, Czecho- thus building up a strong family of CSG also develops modern va- (spojovací) versions. slovak Group employs more than viable and profitable companies. rieties of overland hardware in Also of note are Alliance Ground 8,000 people in the Czech Republic Asides from the automotive and conjunction with close Western Surveillance (AGS) container work- and Slovakia. In 2017, the group’s railway industries, Czechoslovak partners such as French arms stations with electronic systems turnover exceeded USD 1.13bn, Group’s Czech and Slovak subsid- manufacturer Nexter Systems. developed, manufactured and with an EBITDA of USD 110m. iaries also devote themselves to the Also of strategic significance is the supplied for NATO by the Pardu- The group’s slogan is “Tradice development and modernisation firm’s collaboration with General bice-based Retia, also part of the je budoucnost” (Tradition is the of weapons systems. Czechoslovak Dynamics European Land Systems Strnad family of companies. Yet Future). And on the subject of the Group enjoys the capability within (Swiss company MOWAG), from another of their companies, Karbox, future, given current strong levels its family of companies to repair whom CSG has gained a licence has also delivered field hospitals to of global economic growth and the and modernise military hardware to manufacture Pandur II 8x8 CZ the North Atlantic alliance. Then equally strong export orientation of so-called “eastern origin”, but all-wheel-drive armoured vehicles. there is another member of the of the Strnad business empire, the which is still in use by many armies Specifically, these are produced by Czechoslovak Group, namely the future looks rosy. n

summer 2018 19 www.100letprumyslu.cz 100 YEARS 100 ANS OF CZECHOSLOVAK INDUSTRY DE L‘INDUSTRIE TCHÉCOSLOVAQUE

CZECHOSLOVAK GROUP (CSG) is a holding company LE CZECHOSLOVAK GROUP (CSG) est une société with firm roots in the Czech and Slovak industrial holding basée sur la tradition de l’industrie tradition. The group provides a solid foundation for the tchécoslovaque. Elle soutient le développement des current and future development of established brands entreprises traditionnelles tchèques et slovaques which have a strong reputation in the manufacturing engagées dans la production industrielle de défense sector, specializing in both the defence industry and et civile et le commerce. civilian production. www.100letprumyslu.cz/en