Czechia

Bohemia has manufactured precision instruments for whoever controlled Central Europe—Habsburgs, Nazis, Soviets, and now Volkswagen. The name of the overlord changes; the factories keep running.

The Celtic Boii gave this land its name before Slavic Czechs settled in the 5th and 6th centuries. By 1198, Otakar I had been named hereditary king of Bohemia, establishing a kingdom within the Holy Roman Empire whose ruler was a prince-elector—one of seven nobles who chose the emperor. The 1212 Golden Bull of Sicily exempted Bohemia from most imperial obligations while confirming its status as the empire's industrial heartland. Under Charles IV of the Luxembourg dynasty, Prague became the imperial seat itself; he founded Central Europe's first university there in 1348. Bohemia wasn't a peripheral territory—it was often the empire's center of gravity.

This centrality attracted attention. When King Louis II died at the Battle of Mohács in 1526, the Habsburg Archduke Ferdinand claimed both Bohemia and Hungary, beginning nearly four centuries of Austrian rule. Bohemian Protestants resisted: the 1618 Defenestration of Prague—when Protestant nobles threw Catholic officials from a window—sparked the Thirty Years' War that devastated Central Europe. The Protestant defeat at White Mountain in 1620 ended Bohemian autonomy; the Habsburgs imposed Catholicism and German language on a Czech-speaking population. When Austria-Hungary emerged from the 1867 Ausgleich, Czech politicians attempted to create a tripartite monarchy—Austria-Hungary-Bohemia—but failed in 1871. The kingdom remained a crown land, its manufacturing capacity serving Viennese interests.

That manufacturing capacity was formidable. Škoda Works, founded in Plzeň in 1859, became one of the world's largest armaments producers—supplying artillery to Austria-Hungary, then tanks to Nazi Germany after the 1938 Munich Agreement handed the Sudetenland to Hitler. Under communist rule (1948-1989), Czechoslovakia industrialized further within the Soviet bloc's planned economy. The precision engineering tradition that had served emperors now served Moscow.

November 17, 1989 changed the ownership structure, not the capability. The Velvet Revolution—beginning with student protests nine days after the Berlin Wall fell—toppled communist rule nonviolently within weeks. Václav Havel, the dissident playwright, became president by December 29. Czechoslovakia peacefully divorced into the Czech Republic and Slovakia in 1993, and the market transformation began. When Volkswagen outbid BMW, Renault, and Ford for Škoda in 1991, it acquired not just a brand but a century of accumulated expertise. The Škoda Octavia now shares platforms with the Audi A3 and VW Golf; component suppliers cluster around Mladá Boleslav like organisms around a hydrothermal vent.

Today, the automotive sector accounts for 10% of Czech GDP—the highest share in Europe. The industry provides 434,000 jobs directly and indirectly, exports comprise 20% of national total, and Škoda alone generates €26.5 billion annually, equivalent to 10% of the economy. But this symbiosis creates dependency: 30% of exports go to Germany. When VW restructures or German demand falls, Czech employment follows. An IMF simulation found that an "EV shock"—rapid transition to electric vehicles for which Czech suppliers are unprepared—could cost 1.5% of GDP, the largest loss among European producers.

Through 2026, Czechia faces familiar patterns in new form. The 2025 production figures show 1.2 million vehicles with EVs comprising 19.4%—adaptation in progress but far from complete. The same geographic position that made Bohemia essential to empires makes the Czech Republic essential to German supply chains. The question isn't whether Czech manufacturing survives disruption—it has survived Habsburgs, Nazis, and Soviets—but whether the current ownership structure allows adaptation on Czech terms or German ones. At 2.7% unemployment and $27,000 GDP per capita, the symbiosis has worked well enough. But as one economist warned, automotive disruption could "technically financially collapse" the country. The factories will keep running; the question is for whom.