Slovak Detroit

Slovakia’s po­pulation is only a little over five million, so the plan to produce 850,000 vehicles per year was a candidate for a world record from the start. The production of German, French and Korean motor works helped to meet this target.

The country hardly has any tradition in the manufacturing of passenger cars, with the Slovak engineering industry primarily producing weapons and armoured vehicles in the past. The first series-produced vehicle, Skoda Rapid, appeared in the early 1980s. Only several thousand vehicles of this make were manufactured in Slovakia, but after the revolution, it was the existence of those works that facilitated the arrival of the automotive producer Volkswagen.

No matter how the current world crisis will affect Slovakia, the situation will never be as unfavourable as it was in the early 1990s. With the disintegration of the Eastern Bloc, the country lost nearly all of its orders for armoured vehicles and other military equipment. Difficult years followed suit, with unemployment reaching on average twenty per cent, and in some regions, it reached even double this rate.

The arrival of several world automotive manufacturers was so quick that the name „Slovak Detroit“ appeared. Some utter it with admiration, but critics warn that it is very risky for the economy to concentrate on just one type of manufacturing activity. The automotive industry is rather sensitive to economic cycles, „fat“ years can easily be followed by hard times.

Although they are private companies, the state was the midwife in the process of the transformation of Slovakia to Detroit. The state offered foreign investors significant tax breaks and other relief, constructed highways for them, helped with the buyout of land and negotiated with new investors at the international level. Although it never planned to attract only automotive manufacturers to Slovakia, the Government celebrated the news that some manufacturers preferred Slovakia to Poland or Hungary just as in how ice-hockey players used to celebrate the gold medal from the world championship. Ice hockey ought to become a miraculous medicine for self-confidence of the country and motor works should likewise become the same for its economy.

ADVERTISING

The state took its task of being a midwife seriously and so it did not leave the motor works in the lurch during the crisis either. It invested a lot in the scrap-bonus, an idea that was borrowed from Germany, thanks to which it succeeded in stopping the decreasing number of vehicles sold, at least temporarily. How efficient this measure was we will not see for some time.

The German Volkswagen and the French motor works PSA Peugeot-Citroën, with quite similar working styles, settled down in Slovakia. However, the arrival of the Korean automotive manufacturer Kia Motors was rather interesting. The Koreans have quite a different mentality, in which they sacrifice for their work virtually everything and expect a similar attitude from their employees, so it was truly a clash of civilisations.

The arrival of several foreign investors caused a paradoxical situation characterised by a lack of qualified workers in Slovakia. It applied particularly to poorer regions, which nearly all young people left to work in other countries, especially in the United Kingdom and Ireland. The solution was the recruitment of a foreign labour force, particularly from Romania. The flow of people from other countries was provisionally stopped by the economic crisis.

Slovakia first seemed to only become an assembly shop for world automotive manufacturers, but with the arrival of the three large companies, the situation changed entirely. Furthermore, domestic component manufacturers – which account for nearly 70 per cent of the total value of a vehicle – were also given a chance, so that it would be a very interesting business opportunity. The foreign suppliers prevail, but the Slovak component manufacturers are able to compete with them with lower prices.

The big question is what globalisation will do to motor works. It is not sure whether all of them will stay in Slovakia, for now it is certain that at least they will contribute to the mingling of cultures and technologies. The reportage in the German daily Handelsblatt four years ago had cogently described the construction of the Kia works in North Slovakia: "The bulldozer John Deere Loader is levelling the bumpy ground. Close to the entrance, there are three van-type Scania trucks of the Dutch De Boer group. Some time later, the lighting technology from Belgium arrives. The Slovak workers working for the Japanese construction company Takenaka are bossed around by a German. In two years, the first of the South-Korean Kia works in Europe will stand near Žilina.”

Author: Ján Gregor
Photo: iStockPhoto

Audio/Video

Photogallery