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  • #344778

    Anonymous

    I found a story about the booming auto industry in Slovakia.  I was wondering if anyone either works in the auto industry or has any opinon on how this has affected Slovakia's economy?

    Slovakia: The auto mouse that roared
    By Alex Taylor III, senior-editor-at-large @FortuneMagazine October 25, 2011: 10:14 AM ET
    4 Email Print

    Workers put together Volkswagens at the automaker's plant outside of Bratislava, Slovakia

    FORTUNE — Historically-ignored, Slovakia made its presence known on the international scene a few days ago when it became the sole EU member to vote to block the expansion of a bailout fund, thus delaying any decision to aid the collapsing Greek economy.

    Slovakia's moment of fame lasted only slightly longer than the usual 15 minutes. The EU vote caused the collapse of its ruling party and was reversed a few days later. It's a shame that it was so quickly ushered off the global stage because the young country has achieved much in its brief history and deserves more recognition.

    Print CommentSlovakia became independent and its boundaries adjusted to their current dimensions only 18 years ago. Yet in that short time, through a mixture of grit, sweat, and economic opportunism, it has become an automotive manufacturing power.

    Slovakia has been making more cars per capita than any other country in the world — more than Germany, Japan, or the U.S. It's an achievement that in many ways dwarfs those of better-known success stories involving China and India. That's because Slovakia came out from behind the Iron Curtain as recently as 1989 and thus had made the transition from communism to capitalism in a little more than two decades. Furthermore, it has built its automotive business entirely on the back of foreign makers. Slovakia has no domestic auto companies.

    How did this happen?

    The Slovak Republic is a landlocked state in Central Europe with a population of about five million. Part of the Austro-Hungarian empire until 1918, and a satellite of the old Soviet Union until 1989, it separated from what is now the Czech Republic in 1993 to become an independent country.

    As I discovered on a brief stopover there last week, Slovakia achieved its success the hard way. On the streets of its capital city of Bratislava, you see Czech Skodas, German Opels, and the occasional Trabant left over from the Soviet Era, but no Slovak cars. What Slovakia did was leverage its geographical proximity to the stronger economies of Western Europe, keep its pay levels for skilled labor lower than its neighbors, dispense healthy relocation incentives to foreign companies, and maintain a 19% flat tax rate for both individuals and businesses.

    At the same time, it rebuilt its infrastructure by constructing 250 miles of highways, electrified its entire rail system and erected a supplementary high-speed rail system connecting Bratislava and the Vienna airport, and modernized the airports at Bratislava and three other cities.

    6 autos headed for extinction
    The first automaker to find its way to Slovakia was Volkswagen, which established a production facility near Bratislava in the early 1990s. Since its start, the VW plant has produced some two million vehicles that include fully assembled VWs, Audis and Skodas as well as bodies for the Porsche Cayenne. After Slovakia joined the EU and adopted the euro in 2004, Peugeot-Citroen and Kia followed suit. By 2007, Slovakia was making 570,000 cars a year, 106 for every 1,000 inhabitants. It became known as the Detroit of Central Europe.

    0:00 / 2:47 Will emerging markets save the world?
    It would be nice to report that this auto production boom has brought prosperity to Slovakia but that is not the case. It remains one of the poorest countries in Europe. Income per capita is only 60% of the EU average. By one calculation, monthly salaries average only about 780 Euros, or about $1,090. The vast majority of Slovakians can't afford to buy the cars made in their country.

    Nor has Slovakia escaped the European economic slowdown. PSA, which produces the Peugeot 207 and Citroen C3 subcompacts at its plant in Trnava, suspended production in October and will do so again in November due to slow sales.

    VW and Kia, on the other hand, are expanding around the world, which augers well for Slovakia. Countrywide, auto production for 2011 is expected to reach 630,000, up from 562,000 in 2010. The little country that could may yet get something more permanent in the way of recognition for its remarkable achievements.

    #405355

    Anonymous

    its old… no boom anymore  ;D rather a stagnation
    and this isnt a good path of development anyway. we shouldnt become an industrial plant colony with cheap workforce, but focus on science, technologies and such. however citizens of slovak republic are successfully chasing young and intelligent people from among them… abroad, to uk, germany, netherlands, belgium and usa.

    #405356

    Anonymous
    Quote:
    its old… no boom anymore  ;D rather a stagnation
    and this isnt a good path of development anyway. we shouldnt become an industrial plant colony with cheap workforce, but focus on science, technologies and such. however citizens of slovak republic are successfully chasing young and intelligent people from among them… abroad, to uk, germany, netherlands, belgium and usa.

    The brain drain is always a problem for countries with highly educated people.  You need a balanced economy with a mix of high tech, industrial, service, finance and tourism.  When you have all your eggs in one basket, you can get into trouble. 

    #405357

    Anonymous

    As I know there are 3 car producers in Slovakia: Kia, Peugeot and Volkswagen and non of them did not close the factory till today. I would not talking about stagnation. I was working at Kia automotive plant and they had lower profits due to the economical crisis but it hasn t destructive impact on their activity here. The problem in Slovakia is that, people with college degrees are useless. Movement of ideas is under rule of western non-governmental organisations. You cant bring new solution for any problem because it will allways be political incorrect or ecologically unacceptable. For example: Slovakia has a long tradition of building hydro-electric power plants, but it is not possible today because every effort fails on objections of eco-activists.

    #405358

    Anonymous

    theres a "vision" of building about 200 or 300 (?) dams in slovakia. not only enviro-activists are against that, but all rafters, canoeists, most fishermen and all sane people who dont like damaged environment. many fast, clean whitewater rivers and creeks would change to muddy, slow, darkwater dumps. and banks would change from moist habitat bustling with life to simple mounds or concrete walls.

    even slow and undammed rivers like torysa, or ondava (which has only 1 dam i think) which are paradise for canoeing would be damaged. we shouldnt destroy everything, like austrians do (and now they regret it)

    this is (again) interest of few megalomaniac businessmen.

    #405359

    Anonymous
    Quote:
    theres a "vision" of building about 200 or 300 (?) dams in slovakia. not only enviro-activists are against that, but all rafters, canoeists, most fishermen and all sane people who dont like damaged environment. many fast, clean whitewater rivers and creeks would change to muddy, slow, darkwater dumps. and banks would change from moist habitat bustling with life to simple mounds or concrete walls.

    even slow and undammed rivers like torysa, or ondava (which has only 1 dam i think) which are paradise for canoeing would be damaged. we shouldnt destroy everything, like austrians do (and now they regret it)

    this is (again) interest of few megalomaniac businessmen.

    Hydroelectric power is clean and helps make Slovakia less dependent on Mid east oil.  Anything that does that is good.  The development of new energy sources can provided jobs for educated Slovakian people and will breed new industries.  Every European, North American, South American and Oceanic nations should be committed to destroying the tyranny of mid east oil.

    #405360

    Anonymous

    hydroelectric power is anything but clean.
    damage to many kilometers of river (flow slows down long before dam, and becomes muddy, uninhabitable for organisms that prefer clean and fast-flowing water. many such organisms are protected. how do we want to protect them if we dont protect their environment?)
    threatens migration of protected fish species. river banks damaged by bulldozers. lots of fish killed in turbines.
    flooding of land (its usually the best, most fertile soil that is flooded) in case of bigger projects, and also forced evacuation of villages.
    and its horribly ineffective unless its a big project. how much electricity does a small dam make in winter, when rivers and bigger creeks lose up to 50-60% of their water level?
    losses to fishermen, agrotourism…

    its not worth. photovoltaic electricity can have future as scientists develop better and more effective solar panels. thermonuclear energy will be music of future. but not damn dams, we have got enough of them already.

    #405361

    Anonymous
    Quote:
    damn dams

    Damn right damit! :D

    #405362

    Anonymous
    Quote:
    theres a "vision" of building about 200 or 300 (?) dams in slovakia. not only enviro-activists are against that, but all rafters, canoeists, most fishermen and all sane people who dont like damaged environment. many fast, clean whitewater rivers and creeks would change to muddy, slow, darkwater dumps. and banks would change from moist habitat bustling with life to simple mounds or concrete walls.

    even slow and undammed rivers like torysa, or ondava (which has only 1 dam i think) which are paradise for canoeing would be damaged. we shouldnt destroy everything, like austrians do (and now they regret it)

    this is (again) interest of few megalomaniac businessmen.

    And what about projects like this. I think there is nothing wrong about small turbines placed on the local streams. There are no rafters on small streams as I know. I guess the number 200 – 300 means this kind of solutions.
    Prvá slovenská obecná vodná elektráreň

    #405363

    Anonymous

    Such streams would be completely frozen at winter, so such small power stations would be quite useless (and in winter one need even more electricity than in the summer).

    The same limitation applies to photovoltaic cells.

    #405364

    Anonymous

    no, it means regular dams, chained almost through whole flow of a river or stream. you can google what does such chain do with river, ecosystem and quality of water, including underground water.
    the exact number of dams to be built and financed by both eu funds and state budget of slovakia is 368.

    p. s. canoeists and rafters appear on smaller streams, too. this kind of activity is impossible only on very small streams or heavily dammed rivers.

    #405365

    Anonymous
    Quote:
    I found a story about the booming auto industry in Slovakia.  I was wondering if anyone either works in the Auto-industry or has any opinon on how this has affected Slovakia's economy?

    It is not safe to put all your eggs in to single basket. Auto-industry accounts for too much share of HDP for such a small country. If sales of cars deteriorate and auto-industry experience problems or decline, we are in trouble.

    Too much car producers for sake of our own health. Besides they are foreign corporation's owned, which means they pay close to zero taxes due to tax holidays or capital transfers abroad and even receive subsidies for employment. Otherwise they would not bother to open in Slovakia in the first place. And what they opened are just montage halls for cheap labour.

    They are gone cost us a lot at the end.

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