Czech manufacturers bank on COVID tests to avoid a nationwide shutdown of industry

* Government wants millions tested a week

* Czech Rep tops global COVID cases per capita

* So far, strategy has avoided factory shutdowns

PORICANY, Czech Republic, March 12 (Reuters) - Czech manufacturing firms, a key part of European supply chains for the automotive and other industries, are banking on government-ordered mandatory coronavirus testing to avoid nationwide closures during a spike in infections.

Manufacturing, the backbone of the Czech Republic’s export-oriented economy, has so far been largely spared restrictions that have shut services and schools in the country of 10.7 million, which for weeks has been at the top of global rankings in per capita COVID-19 cases and deaths.

Czech auto and machine tool components supplier Benes a Lat said a government order for compulsory testing would help the Czech manufacturing industry avoid damaging closures.

“This is the right way: test and do not shut down,” said Jan Lat, who co-owns the family firm that employs 450 and supplies moulded components for locks, hydraulic and other systems.

With daily cases near 13,000 this week – per capita 10 times the rate in neighbouring Germany – the government is fighting to reverse that trend while limiting damage to the economy.

That has resulted in fresh curbs on movement and a bet on mass testing at firms, targeting about 2 million people a week, which it is hoped will allow the government to stop outbreaks from spreading without the need for industry-wide shutdowns.

All firms with more than 50 employees must complete the first round of testing by Monday.

Benes a Lat had about 25-30 staff either infected or in quarantine as of Thursday, with just one new case among 200 staff tested that day under the compulsory scheme, Lat said.

On a larger scale, Volkswagen’s Czech unit Skoda Auto had tested 28,000 out of its 35,000 Czech-based staff by Thursday, with a 0.66% positive rate. In total, the firm has over 800 infected workers at the moment, it said.

“The trend is slowly stabilising and declining a little, so we hope that our measures are having an effect,” board member Maren Graef said.


A broader shutdown of the sector would have repercussions even outside the Czech Republic.

“Chains that we supply have to have inventory for several days,” said Lat. “If we shut for 14 days, there will be a shortage of something we supply on four continents.”

While big customers often source at more than one supplier, unplanned interruptions would still cause them trouble and spark rows over financial compensation, Lat said.

The critical impact supply chain disruptions can have on the auto industry has been illustrated this year by a global chip shortage that has hit production at carmakers from General Motors to Volkswagen.

Jan Rafaj, deputy chairman of the Confederation of Industry, said calls for a national closure of industry, which had been mooted by the country’s medical chamber as well as a junior government party, had subdued with the testing rollout.

The key to maintaining that would be the situation in intensive care units, he said, which according to the Health Ministry contained an unprecedented 1,962 patients on Wednesday.

“If we remain at a peak for long, the pressure... will come.”

Not all agree the measures will be enough, given deep-rooted problems with tracing and enforcement. COVID-19 vaccination rates in the Czech Republic have been among the slowest in Europe.

The leader of the main union group CMKOS, Josef Stredula, argued for a short-term lockdown excluding critical infrastructure around Easter to cut the prevalence across society.

“A (factory) owner can think he will operate, but if people get sick, he will not. Health comes first,” he said.

Rene Levinsky of non-government epidemic modelling centre BISOP said the latest measures might halt the surge, but the country needed to slash new case numbers to around 1,000 per day to make things manageable.

A shutdown around Easter would cost just four working days and could sharply cut infections, he said. (Editing by Mark John and Jan Harvey)