BRATISLAVA -- When David landed an assembly line job at Volkswagen's factory here in Slovakia, his colleagues congratulated him on securing a well-paid position he could ride to retirement.
Two years later, he is among the 3,000 workers being laid off at the plant that builds models from the Volkswagen Touareg and Porsche Cayenne SUVs to the VW Up minicar in a round of job cuts that has sent shock waves through Slovakia, the world's biggest car producer per capita.
"All my colleagues were saying there's nothing to worry about, if I get used to the work load and work pace, the salary will gradually increase and I will have a stable job until retirement," said David, who declined to give his last name. "And suddenly I get a call from human resources and learn that I'm being let go."
The job losses at the factory, Slovakia's largest private sector employer, underline the challenges the country faces to keep the engine revving in an industry that accounts for about 12 percent of annual economic output and more than one in ten jobs.
Competition from lower-cost southeastern European markets, a shift to electric vehicles and global trade tensions are among the headwinds buffeting the small central European nation as automakers mull where to launch future production lines.
Volkswagen itself is looking at building a new plant in eastern Europe, with trade publications citing Bulgaria, Serbia and Turkey as the most likely locations.
While David found a job at another automaker, the layoffs at the Bratislava plant, which also makes the Audi Q7 and Q8 models, have put the government on alert.
"To use a car metaphor, we see a warning light, we don't need to take the car for a general repair yet," economy minister Peter Ziga told Reuters. "We have 300,000 people working in the car sector (directly and indirectly). Should anything happen to them it would be serious."
The uncertainty has spurred unions, which have previously pushed for big wage increases, to change tack. "At the moment, we do not focus on salaries, the priority is job stability," Volkswagen union chief Zoroslav Smolinsky told Reuters. "We need to wait out the worse times and wait for the better times."
Seeking to bolster an auto industry that accounts for 44 percent of industrial output and 40 percent of exports, the government has approved subsidies to boost the sale of electric cars and announced tax breaks of up to 200 percent of the amount invested in research and development.
But at the same time, moves to raise the minimum wage and increase bonuses for night shifts introduced last year are making Slovakia less competitive, said Jan Pribula, secretary general of the Slovak Automotive Industry Association.
"This is the time when companies are deciding who gets new models in seven years," said Pribula, whose group represents Slovakia's four automakers - Volkswagen, PSA Group, Kia and Jaguar Land Rover - along with suppliers, research institutes and importers. "It is important to send a signal that we are responsible because now we are gradually losing a competitive edge."